maria: all right, markets are lower this morning. lindsay. >> i'm looking for earnings to help stabilize things. maria: exactly. >> going forward. >> new york times and sienna college say marsha blackburn has a 15-point lead in the tennessee senate race. very pro-growth legislative. maria: dagen, have a great day. "varney & company" begins now. charles payne, take it away. charles: we've got a huge day for you and your money. in fact, we've got all the angles covered here. the dow falling 831 points yesterday, that's a 3% loss, in fact, the worst day since february. investors are worried about rising rates, and president trump agrees. in fact, he says the fed has gone loco, he says they're crazy. you're going to hear it here. but it looks like things may be turning around, futures well off the lows this morning. still hovering under the negative, as you can see, but we were down a lot more just an hour ago. the florida panhandle

devastated by hurricane michael, at least two people are dead. homes and businesses destroyed, hundreds of thousands without power. michael is now moving up the southeast coast as a tropical storm. it's a huge day for you and your money. "varney & company" starts right now. ♪ be. ♪ ♪ charles: it was a wild one for the market yesterday, wasn't it? dow jones industrial average off more than be 800 points. joining us now, brian brenberg, greg valliere, macdonald, ashley webster. greg, how much worse do you think it could get before we turn around? >> probably you're going to hit bottom in the next couple of days. we're coming into earnings season. the economy's growing by 4%. i think earnings are going to engineer a turn around. charles: are you concerned though, was we know the -- because we know the expectations

are phenomenal, but guidance, are you wared that companies -- worried that companies are going to say my costs are increasing, it's going to be impossible to match next year, guidance could be something we should be worried about? >> yeah, wildcards. to a lesser extent, trade wars. but i suppose that would be a problem. but again, i think there's so much stimulus in the pipeline, monetary and fiscal, that economic growth will continue to surprise to upside. charles: brian? >> well, look, this isn't about the economy, this is about jerome powell. this is about the fed. the markets are not reacting to economic news and what it means for people's paychecks, they're reacting to the fact that they don't know how jerome powell's going to manage money. and for some reason, the market thinks he's gone hawkish all of the sudden. he was supposed to be a dove -- charles: the market felt that way in february, that's why we sold off bigtime. but since then jerome powell had

many opportunities to communicate to public, i think he did a great job up until jackson hole. but to your point, he put out those comments. you have other members of the fed who keep echoing those kind of things, so we see one thing with respect to communiques they put out. seems like they'll be measured, but then we hear them say things like this. [laughter] >> i think he's trying to figure out how to do his job, what he can say and what he can't say. he felt like the market felt the economy was strong enough that they could handle those comments, he's razeeing that's -- realizing that's not the case. it's going to be hard to manage away from that. he has to be more careful with what he says. charles: and it's not just raising rates, we're in quantitative tightening. the fact of the matter is the fed created $4 trillion, and now they're trying to take it out of the system. first it was $40 billion a month, now it's $50 billion a month. you couple that with aggressive rate hikes, and that could derail everything, couldn't it?

>> this shouldn't surprise the markets. i disagree slightly. i think powell has made it clear what he's going to do. maybe he's saying a long way from neutral is inappropriate, but, you know, another thing i'd just point out, we had the most dovish fed chair in our lifetime, and trump fired her. ashley: very quickly, you had new york fed, john williams, say yesterday it's okay to be hiking rates because it contains asset prices. if you look what happened yesterday, mission accomplished, i guess. but those comments don't help either. elizabeth: the markets fell out of bed and fell down the stairs, because when the yields go up, it shakes all of the bad stuff out of the tree. charles: and that goes back to mixed message point. john williams, second most powerful person on the fed, goes to this imf meeting where they downgrade global growth. on the other hand, he's talking about normal policy. what the hell is normal policy? is. [laughter] that's scaring people.

>> i don't know why the fed is being so declarative with these statements here. what they really should be saying is, look, we've got to read the data, we're flexible, we're paying attention to what's going on, and we can adapt. the problem is now powell has to wait for the next opportunity to do that. in the meantime -- elizabeth: the issue is nothing changed in the basic market fundamental narrative. >> exactly. elizabeth: one issue, barclays pointed out it's going to be choppy profit season for some internet companies. they're already making calls. the internet companies, basically, had their worst two qs since the financial crisis in terms of revenues. charles: that just means they're down can more than 10% from the highs. let's talk about the fed because the president sure is, in fact, taking another shot at the fed this morning on fox and friends. roll tape. >> the federal reserve is getting a little bit too cute, that's all. that's ridiculous, what they're doing. i'd like our fed not to be so aggressive, because i think they're making a big mistake. charles: greg, i understand wall street gets nervous when the

president starts to talk about the fed and tries to, perhaps, influence the fed. but he's also concerned that, you know, his speech last night he made a very interesting comment in one of his rallies last night where he said the economy's doing well, but it's fragile. you know, we shouldn't be so confident that the fed can overplay its hand here, should we? >> i suppose not but, well, we've got a great inflation number this morning. i've been arguing -- you and i have talked about this -- i think the biggest threat to economy is that it overheats. we can't keep growing at 4% on a protracted period because you will get wage pressure and inflationary pressure. so i think powell's going to let the air off the tire very, very gradually. i think this is a lot about nothing. i think yields will come back down because it's quite clear inflation still has not taken off. charles: folks, you see on the screen there u.s. futures, nasdaq is now in the green. a lot of these big tech names massacred, right? they're down huge. and a lot of people wondering

now, brian, can they get back that mystique that they had where you just buy 'em and walk away, sort of like one of those infomercials, you know? [laughter] feel it and walk away. [laughter] >> i love. that i don't think that's going to be the case going forward. it doesn't mean these stocks are overpriced or there's not a lot of upside there. there is a lot of upside for the amazons, the apples -- charles: you still i throw darts on the names on the board -- >> i just think the next year's going to be really choppy for them because they're going to deal with new disruptions. if we do 25% tariffs on chinese imports, costs are going to go up. i'm not saying that's going to cause massive, massive problems in the economy -- ashley: they also have regulation over their head, the beatle of that drum gets louder every day. it will hurt the bottom line. charles: greg, what are your thoughts on big tech, particularly those key names that have led this market for a couple years? >> i think maybe there's some headline risk in terms of

regulatory challenges, but i don't think it affects profits. i think profits stay pretty strong. elizabeth: yeah, here's the thing, barclays also saying twitter and snap expected a bad quarter, alphabet and ebay are expects to come in line where amazon's going to be a mixed bag. charles: yeah. what about leadership there, greg? i'm starting to believe if you really look at, for instance, facebook and netflix since they reported, they've had a struggle. but there seemed like maybe there were some other names that could fill the void, apple, amazon, invidia. i'm in 'em, in my long-term retirement accounts. i'm not going to sell 'em, and i'm looking at even adding some new names. >> right. the latter point is crucial. i think there are a lot of high growth stocks that haven't done well that may now pick up the slack. i'd just make this other point. when the president of the united states says the fed has gone crazy, that sends a confusing signal to markets abroad. i think when it comes to fed, the rhetoric shout maybe be toned down a little bit.

charles: yeah. well, you know, we know we're dealing with a different kind of president. >> that's right. charles: by the same token, i don't think it's going to influence jerome powell -- >> it shouldn't. charles: it's shocking to hear people on financial networks saying powell did the exact opposite to prove a point. thank you very much. in the meantime, tropical storm michael, jeff flock is in panama city, florida. jeff, just how bad is the damage? >> reporter: well, you know, it depends, charles. you know, we're making our way to panama city from the beach, and maybe you see this is a road we're traveling on, i don't know if kyle's able to spin around almost into the sun, you can see what it has wrought here. but, you know, i'll tell you, we've done these hurricanes enough -- and i say "we," the government and first responders enough -- the respond quickly. i'm seeing a lot of that. downtown panama beach and downtown panama city, a lot of damage there. and this is, you know, this kind of damage -- look at this,

snapped-off pine tree there, isn't that a amazing? just tremendous power. i mean, this storm had just tremendous power. i think the positive is that it wasn't in a more populated area, you know, like a katrina or an andrew or even florence. this is spread out over a ways, and did you see, i mean, you just see the kind of power that we've experienced here. so we'll watch it all day, charles. charles: you've been there all day and night. we appreciate it. we'll check back in with you soon. thank you very much, jeff. >> reporter: see you later. charles: now let's check on the equity futures here because they've beenal over the -- all over the board. nasdaq higher, we're off 300 points plus from the lows, pre-opening lows of the dow jones industrials. i know we're going to have a crazy day, but we might even

open this thing higher. michael, now it is a tropical storm, leaving behind a big path of destruction. later this morning we're going to talk to a mayor of one of the hardest-hit cities. meanwhile, president trump signing legislation to help patients save on prescription drugs. health and human services secretary alex azar on that. and former attorney general eric holder, he's rejecting a call for civility. in fact, he says when they go low, kick 'em. you'll hear it right after this. (guard) what i've witnessed...

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charles: quick check of the futures, now looking at it, will certainly open lower but not as bad as an hour ago. the nasdaq and s&p could actually open in the green. the dow stocks that will be on the move when the market opens, you're looking at some. walgreens missed on the top line, you've got some other weakness there. just mostly pillover from yesterday -- spillover from yesterday. let's look at the s&p movers as well. we've got some pretty

interesting names here. delta had a really good number, pretty strong guidance, united pretty good. so a nice mix there on the upside. and here are your nasdaq names, again, a lot of these stocks just absolutely hammered yesterday. we're going to get a pretty good move. costco, same-store sales 8.4%, the street was looking for less than 6%. great news there. now, unfortunately, to other end of that spectrum, sears. the journal reporting that its lenders are pushing for the company to liquidate its assets. elizabeth: yeah. they want a fire sale. i think as they see rates going up, they see the underlying real estate portfolio diminishing in value, bank of america, wells fargo, sears has missed payments to vendors, stocking its shelves for the upcoming holiday season. lenders want a chapter 7, not a chapter 11 re-org. this as the balance sheet debt is swamping its market value. and, you know, we're talking $2

billion maybe for the underlying real estate assets when the debt is $6-$10 billion. ashley: the word is bankruptcy could come by monday. they have $134 million loan payment due monday, they're not going to make it. charles: no, they're not. back to politics. former attorney general eric holder had strong words for the gop. roll tape. >> you know, when they go low, we go high. no. [laughter] no. when they go low, we kick 'em. [laughter] charles: joining us now, senator roger wicker, republican from tennessee. it looks -- >> oh, dear. ashley: mississippi. charles: that was my fault, i knew you were from mississippi, but they put tennessee on the prompter, and i'm killing myself because i know i'm going to say the wrong thing. [laughter] all right, anyway, sir, thank you for joining the show. civility out the window. this isn't the first high ranking democrat who's made a comment like this. in fact, hillary clinton echoing

something very similar. this is scary stuff. what do you make of it? >> well, you know, i guess i have a different take on this than a lot of peel. i'm glad -- a lot of people. i'm glad these comments have come to light, and i'm not surprised by them. but i just think it demonstrates to all americans and to our republican base what we're up against the next three and a half weeks and what's at stake. so in a way, i don't celebrate the tone, but i think it's helpful as a way of informing the voters, yes. charles: i hear where you're coming from, and certainly if you look at poll numbers in the last week, there's absolutely no doubt that the democrats are doing themselves a major disservice among voters. every single day for the last three or four days the numbers continue -- there's a tidal wave because of the way they look and the incivility. but yesterday rand paul talked about a potential assassination. so this goes beyond just, you

know, who wins politically. >> and that's a point that senator paul's wife kelly was making in her op-ed piece. which was directed broadly but also specifically at senator cory booker. i know cory booker's not going to do anything to hurt the safety of kelly paul, but it only takes one disturbed person out there that takes these comments seriously, and you've got somebody shooting at a baseball practice where rand paul attended and where my own congressman, trent kelly, with us shot at but -- was shot at but missed. and you go from there to hillary clinton's comments, to people trying to run members of congress out of a restaurant because of their political views, it's gone, it's gone too

far. charles: yes, absolutely. >> but also it's a signal to us that we don't need to take november 6th lightly. charles: well, sir, we appreciate you coming on. next time we'll talk more policy. roger wicker, republican from the great state of mississippi. [laughter] thank you. charles: let's take another look at the futures here this morning. again, we're shifting around, we're trying to find some terra firma, if you will. remember, we were down 340, 50 points this morning on the dow. that's a number to look at. it could be retested. meanwhile, big tech stocks led yesterday's market rout, so is now the time to buy? our market watchers are on it, they're next.

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charles: all right, folks, back to market. we're going to open up real soon. let's set the stage with mike murphy, jeff sica, les macdonald, ash -- liz macdonald, ash webster. >> there's a strong chance we can stabilize. this morning the futures were weak, we're almost rebounding to flat. i would love to see more selling for more buying opportunities. i think this selloff is nothing more than a buying opportunity. charles: jeff, you the man right now. [laughter] elizabeth: your the market

prophet -- can you're the market prophet. charles: sica, what's going on? >> you're asking for my 15 minutes of fame which is about 14 minutes done. [laughter] yeah, it could certainly rebound. i think there's the potential. but the longer term, i mean, i'm -- and i've said this before and i take a lot of slack over it, but i still think the market is drastically overpriced. that being said, a lot of this selling has to do with the fact that these companies are not able to come in and buy back their own shares because of the blackout period til earnings. but as we get closer to earnings and we start seeing share buybacks, i think we'll see another uptick. but it's going to be an ugly october, and the longer term i think people -- liz: ubs is calling for more than the triple the buybacks and dividends then the average of what we've seen. we were talking about dow 27,000. you know, the dow is still up nearly 4%. the s&p is up 4%, nasdaq nearly 8%. >> we can still talk dow 27,000.

liz: okay. charles: we can talk dow 30,000. right now, in fact, the dow looks like it could open even higher today. the "varney & company" will be right back. dow 30,000. [laughter] every investor should ask questions. is our money in the right place? what am i really being charged? and is it eating into my returns? is my advisor a fiduciary? is he always a fiduciary? a good place to start is with an independent registered investment advisor. as fiduciaries, they live by a simple rule: always act in the best interests of their clients. that's why charles schwab is proud to support more independent financial advisors and their clients than anyone else. visit findyourindependentadvisor.com

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obviously, everyone -- there's a lot of anxiety. we haven't had this sort of selloff since february. we had big selling days, all associated with the federal reserve back then. the big question right now and with president trump weighing in on this, will the fed wreck this thing, or will they allow the economy to continue to grow? now you have the economic purists who say, hey, you know what? they should be tapping the brakes. and you have regular folks saying, heck, i haven't had a raise in years. 2.9%, 3%, come on, fed, give me a shot. ashley: the premarket losses really turned around with that cpi number, charles. it's a month, it doesn't make a trend and probably won't affect what the fed does, but it has helped the sentiment today. charles: here's the cpi number, folks -- [laughter] i got the whole report. somewhere in there it says we doing okay. [laughter] ashley: not as bad as it could have been. charles: of course, gasoline prices up 23%. should we be afraid of inflation? >> no. absolutely not. it's not there. you have a strengthening

economy, and at some point it will be there, but right now there's nothing out there that tells you people aren't spending money and getting good returns for it. charles: between the cpi today and the ppi yesterday, the biggest expense, airline tickets. all right, folks, here we go. opening bell going to ring in just three seconds, here we go. following a massive selloff, the third biggest down day point wise in the history of the market, off immediately more than 100 points on the dow jones industrial average. intel leading the way, johnson & johnson, procter & gamble on the upside. wall green's missed on the top line, they're having some trouble. they're in a little bit of trouble. it's interesting to see apple there. i said a lot of folks said apple should bounced today. intel right now doing pretty well, microsoft, home depot, which is another oversold name. let's take a look also at the s&p 500 and the nasdaq. both of those indexes are down lower today, all eyes on nasdaq. right now 80% of your tech names

are in correction. what that means is that they're down more than 10% from their 52-week highs. all right, let's go back and check the ten-year yield. down slightly. a. ashley: yeah. charles: it was 3.23 the high? blez blez yeah. ashley: i think it briefly went to 3.25. charles: the anxiety remains, a lot of it revolving around the federal reserve. let's check the big tech. microsoft, as i mentioned earlier, the only one up. not necessarily a lot of carnage although people are spying these stocks to see if there will be some buying opportunities. let's look at the biggest movers on the dow right now, if we can. walgreens, missed on the top line. visa, american express, not sure why they're down. mcdonald's had a buy upgrade yesterday by guggenheim before the open, and it was actually up for most of the session before i succumbing to overall market.

and p ap apple just fractionally lower. that's certainly a stock that a lot of professional money managers are going to want to buy. the s&p 500 floor, last night after the bell they just had a terrible warning. the rest of these names, jacobs down in conjunction with that and the rest of the names not off that much. elizabeth: two-thirds of the s&p 500 either down 10 or 20. so the market gainers yesterday, there were 17 in the s&p, dollar tree, dollar general, smuckers and campbell's among them. charles: some of those consumer staples, defense names, also some domestically-oriented. look at the dollar stores particularly as we get deeper into some of this overseas pressure. let's bring in the pros again, mike murphy, jeff sica, liz and ashley still with us. we talkedded about getting some equilibrium. do you still see a potential fourth quarter rally, and if so, what will lead it? >> i do see it, and what's going to lead it is earnings.

you look at amazon, companies like facebook, if you remember back to last quarter, they didn't put up good numbers, they put up phenomenal numbers. and i don't see anything that tells me -- charles: has to be phenomenal versus expectations though, right? facebook got hit pretty good after that number. >> it did, but i would argue phenomenal versus expectations if the stock were at its high of 200 where it was 6-8 weeks ago. right now it's trading at 150. amazon was 2,050, $700 this morning. if all you do is wait for 10 to 15 to 20% pullbacks in the fastest growing companies in this country and you buy them, i think it's good. charles: in some ways this market is cheaper now than it was in january from the january peak. >> it is cheaper, but here's my problem. my probe with the market has been -- problem with the market has been almost 50% of the s&p has been in five stokes. those five stocks need to drive the market. and what i've said all along is those stocks have fallen under

the curse of high expectations. you see it with what happened with facebook and the declines facebooks has experienced. i think that's where to be concerned when you have too much money flowing into too few stocks and this much volatility. i don't think -- i don't agree with mike. i don't think we're going to -- i think we're going to see a short-term bounce off of this decline, but i think we're going to see a longer term decline. ashley: very interesting yesterday, 800-point selloff. you'd think the safe haven would be gold, right? today -- it wasn't yesterday, but it is today. if you check gold, the analysts say, look, 1205-1215, if gold breaks through that resistance, it's already up $16, right in the middle of that range, if it continues on the upside, it could break through. the dollar weaker against all other currencies, so today it's the typical safe play. >> i think if you look at the selling yesterday how it really took off into the close of the market, we went from down 300 to

closing down at 800, that wasn't mom and pop at home selling their facebook stock, that was program trading where you know these algorithms when they start to trade selling begets more selling. ashley: right. >> and to jeff's point, i look for growth. i invest in growth. that's why we have the great returns -- ashley: i think the psyche today seems different than yesterday because we're seeing moves we would typically see in a selloff. >> that's when you buy. ashley: buying opportunity. good enough. charles: the role of these machines can't be overstated. and i think individual investors need to understand the you're trying to compete against these outfits that built these amazing pipes with high frequency trading and algorithms and they get the closest they can get to exchanges, i mean, they're dealing with something that we don't -- the normal investor doesn't even have the capability of dealing with. so you do at some point have to look at the fundamentals to keep your sanity. >> you do, absolutely, charles. and the fundamentals are important, but you also have to understand that a good percentage, like you said, is being driven by machines.

so it's not about fundamentals, it's about speed. and whoever's able to get that trade in quicker usually wins the trade. so you have a lot of people that don't care about fundamentals, and we have to recognize that. elizabeth: but bull markets don't end when the economic data is strong, you know? bull markets end when the treasury yield spikes rapidly higher because those algos are geared to an inverted curve, and the investors like in 2000 ignored the inversion of the yield curve which happened in 2000. charles: i want to get back to that, that's a great point. but also with big tech, we just had the board already starting to turn a little bit. microsoft is up, micron, some of the other names. i thought it was interesting yesterday, mike, the worst performer, you know -- [laughter] the worst performers in tech where were the names that were up the most this year, and the better performers had a rough year like western digital. could there be rotation into those names? >> there may be, but i'm looking

gore growth. the chips had a big runup earlier this year, that's more commodity pricing. when you look at big tech and talk about microsofts, the facebooks, the amazons, that's where you're still seeing growth. until that story changes, until the earnings tell me a different story, i'm going to stick with what's worked trout the course of -- throughout the course of this bull market. charles: in your work, how do you model in fed decisions? because, you know, i went back and i looked at the last five bear markets, and i looked at all the fed action going into them. you can argue that there may be a correlation, right, going back to '73. the fed started raising rates, you know, in march of '72 all the way through 1973. finish sail thing in 1980. -- same thing in 1980. in august they started raising rates, in november we had the crash. 2000, they started raising rates, in june we had the crash. on and on. does president trump have a point that maybe the fed is the greatest threat to economic recovery in the stock market? >> they could be if they start

doing something that is loco or that is crazy. but raising rates gradually in a strong economy, i think, is what the fed is there to do. so it may slow the growth a little bit, but that's part of what they're trying to accomplish. but there's nothing out there -- i think when you look back in history, charles, you're not starting off at the level we started out, sub 1% -- charles: great, great, great point. >> to see rates up at 3, 3.5, that's not going to slow down these large, high-growth companies. charles: facebook on the screen, we know you like that. what else do you like? >> like facebook, microsoft, amazon, we'll add to those positions today. also looking at nike. nike had some positive press after the kaepernick story and it sold off ten points here in the last couple -- charles: although u.s. shoe sales are only up 5%. the rest of the world was selling at a faster pace. so the colin kaepernick thing could be inconsequential overall. what do you like here? i know overall you're concerned, but you do have some long

positions. >> yeah. and i'm about to shock -- charles: let me buckle up here. [laughter] >> stuart's not here to hear it. we don't own these stocks, but we are going to buy them. vulcan materials in the concrete, cement, asphalt business and martin marietta. charles: i am getting backed in those -- waxed in those, why are you going to buy them? >> you're going to see major spikes in construction going forward. you have about $2.8 trillion in capital gains that a good percentage could be harvested. i think the government, which i'm not a big fan of government in general, but the government in this tax code initiated a plan to invest in real estate and construction. that is going to help these two companies. charles: all right. in the meantime, we are at the lows of the session, dow's off 142, 43 points. you do see a smattering of green including nike, up 64 cents.

just sort of a feeling-out process, folks. that was a crazy day yesterday, and believe me, this sort of volatility doesn't go away overnight. let's take a quick check on oil. oil pressed up against $75 a barrel, didn't break out. national average, meanwhile, for a price of regular gas, $2.91 still. take a look at tesla. many people won't believe this, but the breaking news? they outsold mercedes benz in the united states in the last quarter and this close to outselling bmw. >> wow. charles: now, this morning the journal reporting that sears met with its lenders last night. the topic of discussion, emergency financing. but the meeting ended without an agreement that will keep sears from going -- and remember that chief executive, eddie lampert, won't throw sears another lifeline. so what's going to happen from here? >> well, eddie lampert owns about 30% of sears. right now they need a billion dollars a year to run. last year they blew through $1.6

billion. they are in deep trouble, and the problem that they're having at sears is they're unable to get their suppliers to be willing to take the risk and put products in their stores for christmas. and -- for the holidays. and that is a major problem. so they have to do this. i think -- to me, it's a sad time. they are an iconic retailer. they're a big part of my childhood in remembering going to sears and all the great that came with that. this is a sad time for america that we're losing this retailer, but it needs to happen. elizabeth: this is a rush for the break-up assets, the break-up value is about $2 billion. the debt is phi times that -- five times that. >> i asked eight employees at our venture capital fund yesterday all sub-30 years old if they'd ever been in a sears, 0 for 8. ashley: no one. charles: ask under 50. [laughter] >> they will blame amazon, but a lot of this responsibility goes to them. charles: yeah. a long are time ago. jeff, mike, thank you very much. really appreciate it, guys.

another quick check of the big board, it's going to be another wild ride. market's trying to find some terra firma. in the meantime, 25 days until the midterm election, the gop battling to maintain control of congress. bret baier on that later this morning. also, hundreds of thousands now without power as tropical storm michael continues to slam the south. we'll ask president of duke energy what's he doing to get people out of the dark. and a live look at the big board there. down 144. the question again, is the all-time high october 3rd seems like a year ago. was that the top of the market? going to ask economist john lonski that very question next. ♪ ♪

charles: all right, folks. big board, checking on it, the dow now off 100 points. it's going to be another really wild and crazy day, so we've got to go to floor of the new york stock exchange. christina parts nevilleless is there. what's the mood like? >> reporter: seems people here are optimistic that things are going to pick up. i spoke to one trader saying there was too much optimism, too much money in the market, so you're seeing some traders hedge their bets, some even execute put options where they're selling at a certain strike price. one hedge fund made $3 million yesterday, so that's just one example. the traders said look at the etf market you're wondering where the markets are heading. usually when the spider etf drops, you should see the markets follow. tim anderson from mmz partners say you're focusing a lot on powell's words about the interest rates climbing higher. he said, you know what? just keep it down.

hopefully, you won't be too aggressive, but they're optimistic we'll see a slight rally but over the next coming days. it's not going to bounce back up right away. charles: christina, thank you very much. and, of course, we'll bring in economist john lonski. october 3rd was the market high. will that be the high of the year? >> no, i think there's a good chance we're going to break above that high later this year, especially if interest rates settle down, especially if the ten-year treasury yield goes back under 3%. i wouldn't rule that out. after all, you know, we have weakness with home sales, we have an index of housing sector stock prices that is down by 22% for the year the date, the overall market's till up by 4% -- still up by 4%. charles: christina just brought up a great point about powell's words. see, i've been confused, and i think the market'sen confused, because if you look at what he said in jackson hole, the communique from the fomf, they

have -- fomc, when they do make comments about a long way from neutral, we'll overdo it, those do send a mixed message. >> well, he's not going to say that now, that's for sure. [laughter] he may have said that because the market was doing very well at that time because stocks were even more overpriced when he made those comments. in the fed is wise, they have to have a lot of flexibility, and you alluded to this earlier in the show when you mentioned, you know, this episode of monetary firming is like none other from the past in that the fed is both hiking fed funds and reducing its holdings of treasury bonds. and i wouldn't be surprised -- charles: that's a hell of a balancing act. this is uncharted -- >> uncharted territory. we don't though exactly how markets and the economy are going to respond. and if the ten-year treasury yield creates problems for the economy, why not go ahead and just temporarily halt the fed's passive reduction of treasury bond holdings? charles: what do you make of the theory put out there that the fed has to be aggressive now so

that it will have arrows in its quiver in case -- i mean, because it sounds like, to me, the fed creates a downturn so they have the tools to -- >> that's absolutely nonsense, poppycock. i can't buy that at all. look at inflation. good news on inflation. of you know, the rate of inflation, core cpi inflation was higher in 2012 when we had an unemployment rate above 8% than it is today with an unemployment rate of less than 4 %. maybe the fed has too much confidence or weight assigned to phillips curve which isn't what it used to be. the '70s are long gone. charles: there you go. my man. that and the hula hoop and the pet rock. >> and the chia pet. [laughter] charles: check on the big board. i don't know what john lonski said, but he put a spark in this market. almost want to brick you back in the -- bring you back in the next segment. president trump simply says he's not happy about it. we're going to ask former white

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charles: i told you john lonski was good luck. look at that, folks. nasdaq powering higher, the s&p up, the dow jones industrial average. mike murphy liked a smattering

of tech names, all of them up except amazon for right now, but they're all looking really good here. i've got to tell you, we're going to go from panicked selling to panicked buying the more those stocks go up. elizabeth: we're at august levels right now. charles: great point. president trump, well, let's just say he's not happy with the fed raising rates. roll tape. >> the problem that i have is with the fed. the fed is going wild. i mean, i don't know what their problem is, but they're raising interest rates, and it's ridiculous. the fed is going loco, and there's no reason for them to do it. and i'm not happy about it. charles: joining us now -- [laughter] sean spicer, former white house press secretary, currently the spokesman for pro-trump super pac america first action. sean, the president, obviously, never shy about anything, even criticizing the fed. yeah, i was just waiting for him to say that old powell's a bad hombre. what do you think of it?

[laughter] >> look, i think he understands the power of being able to borrow money at a cheap rate and infuse economic stimulus into the economy and how it affects people's lives. so as interest rates rise, it's going to affect the ability for people to do everything from home improvement to buying additional homes to things that, you know, all those things that stimulate an economy. and so it rolls downhill. it affects how the government borrows money and the amount of debt that we assume late, it affects how most people borrow and spend money whether it's an auto loan or home loan are. so i think he's been doing a lot for this economy to get it growing, to get interest rates -- to see interest rates go up really impacts the bottom line for so many americans. and when you've got unemployment going down, economic growth going up, you don't like to necessarily see something that's going to throw a monkey wrench into the system. charles: i agree with you a thousand percent as the architect of this, this economic boom is his baby.

he engineered this, and there's no doubt about it. and also i think it's even more about how does the fed have the right the dismantle this, to derail it particularly as gains are just now getting to folks who haven't seen any for so long, but people are saying, you know, you don't do that, you don't push the fed around. i even heard folks, sean, saying the fed would do the exact opposite. now, i think that would be nuts. to really crush the economy out of spite. but what about the idea that it's not presidential? [laughter] >> i think anyone who's waking up after two years and try to understand this president's not really trying to figure out how to abide by historical norms and protocols has been under a rock the last couple years. look, he's going to communicate directly with the american people. he understands that the fed's an independent body. he appointed chairman powell himself. he understands the role and nature of the fed, but i think that doesn't mean he has to sit silent and allow them to enact economic policies that he doesn't think are good for the american people. and, frankly, you know, i think

he wants the american people to understand where he's coming from -- charles: right. >> -- and how these actions will affect the policies that he's trying to enact to better their lives. charles: i gotta go in 30 seconds, but quickly, a lot of big spikes across the board for key races. what do you make of republicans and this red wave? >> well, i think kavanaugh was a huge factor in the allowing republicans, conservatives, independents and even some right-leaning dems to understand what's at stake. charles: right. >> it made a lot of people who don't traditionally vote in a midterm election or who focus just on the candidates to understand the real big picture. there's a difference between a republican house and a speaker pelosi house. there's a difference between a republican senate and a senate controlled by chuck schumer. and the last couple weeks have made that crystal clear. charles: sean, always great talking to you. thanks a lot. >> thanks, charles. charles: we're following the market, of course, a crazy, wild ride, and it's just opened a few

minutes. and then, of course, the aftermath of what's now tropical storm michael. our market watchers are standing by, and we're going to go live to storm zone as well. a lot more coming on "varney" right after this. . .

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charles: 10:00 a.m. on the east coast, 7:00 a.m. out west. s&p, dow, nasdaq turned positive in the last few minutes. now the pros, looks like they're getting involved in this market. there is a lot of bargains out there, a lot. we're all over the money covering it for you. we're following the aftermath of hurricane michael which is now a tropical storm. you're actually looking at drone footage from panama city. that is high school, obviously it has been damaged. we'll get the view from the ground also. i'm wondering do we have manpower and equipment to rebuild? we'll ask that question. later this hour, health and human services secretary alex azar, what the administration is doing to help you pay less for

prescription drugs. don't go anywhere. this time yesterday when when the avalanche to the downside began and market is trying to turn it around. you're watching the second hour of the "varney & company." ♪ charles: just got latest read on mortgage rates, ashley. ashley: talking about rising rates, the 30-year freddie mac fixed up to 4.90%. that sup almost 20 basis points from last week at 4.71. last week -- we're up 1% in the last 12 months. this is the highest level the freddie mac has been, 30-year fixed in seven years. we have rising house prices, raising rates, making monthly mortgage payments more expensive. analysts say it is not so much the mortgage payments as house prices have risen, much harder for those trying to get in the

housing market to get a down at the same time together. it's together. charles: thank you, ashley. ashley: yeah. charles: we'll look at the dow stocks that fell the most yesterday how they're faring. mike key. charles: great call, mike murphy said buy on the dip. microsoft and visa down earlier. s&p, tiffany, twitter, ralph lauren, two of those names because of bad news out of louis vuitton. all the stocks recovered today. yesterday in the nasdaq, netflix, nvidia, intuit were hit pretty hard. you can see pretty strong rebound here. at some point we might see panic selling become panic buying. bring in market watcher gary kaltbaum. gary, i know you're not necessarily bullish but these sort of selloffs are enticing, aren't they? >> not just yet. i think there is a little too much anxiety about getting in quickly. of. sneaking position we have more

time and price. beyond oversold on near-term basis. we will get bounces. you have to get a little bit careful. it is tradeable, biggs bumps to the upside. when we topped out late january it took another few percent down before we started even repairing things. so i would just be a little bit on the careful side here. charles: how does someone watching go about preparing that list, the ultimate list though? >> look, what i do is on a daily basis regardless what the market is doing i'm looking for leadership both on earnings as well as relative strength. what stocks hold up the best in the worst of times, typically when the worst of times go away, the ones that hold up the best will lead coming out of them but right now theres has been a lot of damage from most things out there. so i'm not seeing much just yet. but if the market decides to stop going down, the cream will rise to the top very quickly. charles: conversely, let's just say to your point that this rally effort is early. again, you know, going back to

february, we had the big down day on february 2nd. then february fifth. then we were up big four or 500 points on february 6th. we got hammered again. it was a crazy roller coaster ride. we broke all key technical support points. how vulnerable could we be to the downside? >> charles, my biggest problem with this market, you talked about it a few weeks, not what happened the last few days, what happened leading up to this. the internals of our market, forget about what is going on in foreign markets which are really bad, our internals were heading south. we were getting more new yearly lows than new yearly highs. the dow was at a low six days. it's a laundry list of industry out there whether airlines or industrials. we're seeing health care and other areas. it gives me pause what the market is saying going forward. things are great right now. the news we keep hear something great.

is the markets sniffing out the higher oil prices, the higher interest rates and whether that is going to affect guidance going forward from corporations? i think we'll know in the next two to three weeks. charles: another pendulum swung a lot last week 1/2 or so is with the midterm elections. we're seeing poll after poll, including one from quinnipiac this morning with ted cruz starting to surge against his rival. what kind of impact could that have own the markets, outcome of the midterms? >> nothing good for the incumbents if the market keeps going down into the election. that should be obvious. the media has really said nothing for the last two years about a 40% rally in the markets. they talk about strong economic growth, they say well, obama started it. you can expect the markets keep going down they're not going to start the newscast with mueller anymore. they will start it with the trump dump. so that may hurt things. so it is going to be imperative that the markets stablize and do

a little bit better over the next, three four years before the election. charles: would the markets share if republicans keep senate and the house? >> they would not be unhappy. my biggest problem, i'm not opposed to somebody who is democrat, but this democrat leadership is left to the left. i was watching bernie sanders talking about our money needs to be redistributed like, my money is his money, your money is his money. i don't want to see somebody like bernie sanders who never created a dime of wealth or a job dictating policy on the future of this country. yeah, it is going to matter and matter big time. charles: gary kaltbaum, thank you very much. always appreciate it. >> you got it, charles. appreciate it. charles: hurricane michael, now a tropical storm, this is video is from the small coastal town of mexico beach which as you can see is left in ruins. we have the duke energy president.

katherine, get an assessment, how many people are without power right now down there? >> thanks, charles. we are seeing on our system about a little over 30,000 of our households are out of power and some of those households are completely devastated as you've been noting, especially the mexico beach area, apalachicola, port st. joe. these are areas will have to be completely rebuilding our system, transmission and distribution. charles: is that something you do now or do you just focus on emergency, making sure people have basic power? >> right now we're in damage assessment mode. we've been sending up some helicopters and drones in order to see the state of our system because many of these areas we can't access right now. we're working closely with the d.o.t. and state to access those areas. the state is providing emergency care. the national guard is out to any

left over search-and-rescue for these communities. we'll move in as soon as we can to get power back on to critical facilities and then continue assessing rebuilding the system for these customers. charles: of course, katherine, these storms have happened so frequently that for the most part we keep hearing better and better stories or more uplifting stories about the response, particularly first-responders and even power companies like your own. what do you see that may have to change? what is your vision, longer term vision for maybe even finding a way to make sure people can even keep power after going through one of these? >> well, we are actually have a long-term plan in place in the state of florida. we're going to be looking to spend about $1.4 billion over the next five years really looking for resiliency in our grid. that take as number of different components to it. some of that is replacing wood poles with steel, stronger

poles, so they can better withstand some hurricane force winds. we're looking to doing targeted undergrounding of lines so again, try to avoid some of those trees coming down and knocking down the power lines. and we're also implementing a a smart grid system. it's a self-healing system where it is a circuit is out, the power can be redirected and customers can hopefully keep their power on more frequently. charles: thank you very much. i know you're very busy. we do appreciate you taking time this morning. >> thank you very much, charles. charles: jeff flock is in panama city, florida. want to go to jeff to see what it is like there. jeff? reporter: actually we were trying to get into panama city and, you know, difficult to get in there. we don't want to get in the way of emergency responders but i tell you this thing will be undercoverred, charles, the rural damage out here. we've been driving for a long while. a lot of these communities that have been hit in the panhandle, you know, they are not richest

community in the world. they're often mobile homes and you can see maybe, roof off of this one. another house next door, reach of that one. trees uprooted like this. that is over a wide swath. often time we get a huge population center, see a lot of damage in neighborhoods, whole neighborhoods, here, as you see, people trying to get around, dog in the back of the truck, country roads, not even paved roads. people live here. these are real folks out here, in the little bit middle of nowhere but they have been hit just as hard by this storm as anyone else. so we want to stay on that, charles. charles: jeff flock, thank you very much. appreciate it. now this, you remember michelle obama saying famous any are in the campaign when they go low, we go high. eric holder has a different interpretation, when we go low,

we kick them. you will hear it here. this is video from -- ashley: apalachicola. charles: apalachicola, florida, when michael hit. we'll talk to the mayor of that town how he is doing with this. al lakes azar putting e-cigarettes on notice. we cannot let e-cigarettes a ramp for teenage addiction. we'll check on the big board. all three major indices are higher including the dow. you're watching the second hour of "varney & company." i think we can do better. change is hard. try to keep an open mind. come on, dad. this is for me, son?

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charles: checking the big board, rally here fading just a little bit. again we know it will a seesaw session, just intriguing to see, we were able to climb off the preopening lows down 350 points. meanwhile check on sears. "the wall street journal" is reporting that lenders are pushing for the company to liquidate its assets. down another 8%.

check on tesla. big news for the company. believe it or not outsold mercedes-benz in the united states last quarter and not far from outselling bmw. paypal teaming up with walmart to let people withdraw cash from walmart stores with paypal. the big story yesterday's big selloff. joining us deirdre bolton. october known for historic bad days. many people calling it a october effect. we have had a few black mondays, tuesdays fridays. >> more than 800 points off the dow is proving it. the recovery needs a little encouragement, right, but so far so good actually. a better open, better first hour than i thought it would be. charles: what is it with october? what do you think? is there something to this fundamentally? is there something -- >> i've been spending a lot of time on the floor of the new york stock exchange recently. a lot of traders down there,

they talk a lot about closing the quarter, closing the year, this third quarter for earnings is often not quite as stellar, right as the prior two. so i know we're tracking to be near 19 or 20% this third quarter which would be very healthy indeed. that is a lot what we saw show up yesterday. a lot of analysts saying maybe not all the numbers we're going to hit. maybe that is a big part of coming up to the end. year, making sure the books are in line. charles: i see that more so this year. that third quarter was the best quarter since the fourth quarter of 2013. for five years, you know, it was a remarkable quarter. been a pretty good year. maybe you close the books, window-dressing is over. you ring the register. >> especially we look at the "fang" stocks, right? yesterday that is the worst day in history that they have ever had, $125 billion in market cap just wiped out. you look at these companies, people say okay, they are going to continue to grow of course,

but maybe not just at the rate we've seen and expectations are too high for them. charles: when you take some of the veneer off the invincibility of those names, do they ever really recover? >> that is the big question. charles: you buy it, you buy it. now the question is -- >> how much is it really worth? charles: they could be vulnerable. >> they could indeed and especially when you look at something like facebook which continually been plagued i guess we can say by even fundamental data security issues. that is a big overhang for that company. we recently heard with google, alphabet google, 500,000 google plus accounts were hacked at "wall street journal." google chose not to reveal that because of fear of regulation. these companies were wonder kids. maybe they're growing up in a little bit of teenage angst and they have to deal with their own internal issues, they don't have the political cool factor they did have. senator mark warner a democrat

is more angry with google than anyone else right now. >> indeed. charles: appreciate it. check the big board. it is another one of those days we were down. came up over 60. we were meandering. this i will was a wild day. by the way a great programing note for you, check out my show, "making money with charles payne" moving to 2:00 p.m. starts on monday. will try to make you money while the market is open. someone said that is a novel idea. liz: who else moves? charles: emac. liz: "the evening edit". expedia introduces add on advantage,

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it was breaking through 75. consequently pulling back here. still national average of regular price of gas, $2.91 per gallon. back to politics. listen to what eric holder said about civility in politics. roll tape. >> it is time for us as democrats to be as tough as they are, to be as dedicated as they are, to be as committed as they are. michelle says when they go low we go high. no. no. when they go low we kick 'em. [laughter] [applause] that is what this new democratic party is about. charles: joining us now congressman louie gohmert, republican from texas. congressman, are you learning karate? are you taking karate lessons? >> no, i'm not taking karate lessons. not helping with people like hillary clinton, eric holder, maxine waters say getting in their faces. they're encouraging mob rule.

they are encouraging hate crimes. these are people that pushed through the hate crimes bill. what happened to steve scalise and rand paul, that is hate crimes. they were selected because they were republicans and beat up for it or shot for it. but they need to watch that but if you follow the rest of what eric holders says he goes on to say i am proud of the democratic party history. well that tells you either the people that educated him, the institutions are quacks and don't know what education is, or, he really is proud of the democratic party continuing, perpetuating slavery, fighting against republicans, killing abraham lincoln, trying to kill seward, fighting against the civil rights movement, all of those efforts. he is proud of all of those against black americans. it is really pretty outrageous. it says a great deal about either his education or his devotion to open pressing african-americans. charles: although you know

they're never going to educate the public about the history of the democratic party, never. so -- >> we'll keep working on it. charles: you know, we appreciate you doing it, but i don't think eric holder will ever do it. i am very shocked to hear him advocating violence. >> exactly. kick 'em. charles: this is not tongue-in-cheek stuff. hillary clinton is serious. until the democrats get back in control it is about anarchy. >> that's right. charles: rand paul made the point someone would get assassinated. there have been assassination attempts already. >> he is exactly right about that. those were attempted assassinations on the baseball field. i know texas law, i've been a prosecutor and felony judge. the law is very clear, if you even, and the word is encourage someone to commit a crime and they commit it, say by telling them to kick the republicans or get in their face, if there is contact, then you're as guilty as the one who commits the

assault. so eric holder needs to be careful. at some point we'll have a justice department that goes of a crime among top democrats and when that happens, he may be very vulnerable. charles: congressman gohmert, again, you know, never too late to learn some karate moves. meantime it's a very serious topic. >> it is. charles: we appreciate you taking the time this morning. >> thank goodness, our president is outing the fed. they did nothing but prop up the failed economy during the obama years and now they're trying to hurt the good economy that the president is helping create. so he is exactly right to call them out on that. my two cents, charles. charles: your two cents are worth it. thank you very muchp appreciate it. >> thank you. charles: breaking news. "the wall street journal" is reporting that president trump will meet with the china at the g20 summit. it happens at end of november. also take a look at this. apalachicola, florida, getting absolutely slammed when

hurricane michael hit it. we'll talk to its mayor to find out how he is dealing with it. amazon in correction territory, down more than 10% from the 52-week high. analysts are warning it could actually get worse. we'll talk to tech watcher scott galloway, he has been pretty critical of amazon. that's next. i am an independent financial advisor. when i meet a new client, i start by asking questions like: did you understand all the fees you were paying? was your broker a fiduciary? were you satisfied with the attention you were getting? then i explain that being independent gives our firm the freedom to give our clients the attention they deserve. we can put a plan together that makes sense for them. independence lets us do that. charles schwab is proud to support more independent financial advisors and their clients than anyone else. visit findyourindependentadvisor.com

charles: quick check of the big board. dow jones industrial average is off again. nasdaq though still holding on to its gains. big tech names like amazon rebounding slightly, now it is in correction. facebook also a bear market. we'll have a lot more on that in a minute. check snapchat, gaining after falling five straight sessions up about 2% here. hurricane michael slamming

into the florida panhandle. on the sown with us, van johnson, mayor of apalachicola, florida. mayor, we understand your city one of the hardest hit. how are you handling things now? >> we're trying to get back to normalcy. we have assessment teams on the ground. what we've discovered, streets are littered with trees. the power is out and we've been experiencing some problems with low water pressure. we believe that our generator something, didn't kick on. it is a concern, because that is duke energy start recharging the power lines, we don't want into the risk of a fire. we don't have adequate water to address that. charles: mayor johnson, how are your citizens holding up and do you have specific areas where those who didn't evacuate, would they have sort of gathered together? >> no, we don't have any approved shelters in franklin county.

all our shelters are other counties more inland. what we're doing is asking residents that decided to stay, get out of the way, let the work crews do their jobs. no sightseeing. pretty much stay indoors, the ones that decided to ride the storm out. charles: we're showing images of your town right now. it looks, very, very dangerous, very devastating. what is your main concerns at this point? >> like i stated earlier, making sure that we get the water pressure back on, because in talking to the fire chief he recalled an incident of a storm passed, when they recharged the lines, the electrical lines, that we had, we experience ad fire. so we don't want to see the same thing happen. so we want to make sure our priorities is getting that water back up. charles: what about rebuilding? >> that is going to be a long-term goal there. once we make the assessment to see what structure damage has

been done, then we can reach out to fema, reach out to state government for assistance to start rebuilding our lives. charles: mayor johnson, thanks for taking the time. it is a horrific, tough situation, we appreciate it. we're all thinking about you. >> thank you. charles: thanks a lot. back to the markets, folks, joining us market watcher ryan dietrich. ryan we had a huge move down yesterday and the big question, where do we go from here? >> charles, isn't that the ultimate question? thanks for having me back. glad to talk to you. look what just happened. the third quarter was the least volatile third quarter we've seen since 1963. s&p had gone over 3 1/2 months without a 1% change up or down. then you went through october as we all know, there has been selloffs in october. funny about october, it is a average month. more one percent up and down moves in october. that ball was wound pretty

tight. the beach ball was under water a long way, once you get-go you can get a big move. that is exactly what happened, obviously happened yesterday. don't forget, we have the midterm election coming up. we wouldn't be shocked to see a little weakness, clearly start the already. before the november 16th election, the s&p was down nine days in a row. weakness before a election. get out of the way, strong fundamentals can drive us higher. we think this will play out eventually. charles: get out of the way, sort of understanding history. do you see this as opportunity? should folks be looking at this as opportunity to buy stocks that they might have missed the first time? >> we absolutely do. let's be clear, it might not be over. we're up a little bit today. there could be a little more downside here. this is absolutely an opportunity. talk about earnings starting up. third consecutive 20%

year-over-year earnings growth. that's a good thing. capital, cap-ex, companies investing in themselves, came into seven-year high. those are things we haven't seen in a while. we were due for a correction. markets had one to 2% corrections a year. we might work on third one. the fourth quarter, strongest quarter of the year. fourth quarter midterms are really strong, thanks to november and december as the election gets out of the way. we would use more weakness as opportunity to buy favorite beaten down stocks. charles: ryan, appreciate it. >> thank you. charles: breaking news right now. "wall street journal" reporting that president trump will meet with china's xi at the g20 summit. larry kudlow just told reporters it is still under discussion. we're not necessarily sure. kudlow also saying that the president is not directing any special action to stablize the market. he says the selloff doesn't give

the president any doubts about his economic policies. that the president also respects the fed's independence. he won't get in the way of that. he just happens, these are my words, to have an opinion. big tech names that took a big hit yesterday, amazon still down today. it is in contradiction territory. bring in nyu business professor scott galloway. scott, you've been very critical of amazon. is some of the things that you are worried about, do you see it now being reflected in the share price? >> no, i mean i believe that amazon, from an investor's perspective is probably a buy. full disclosure, i own most of big tech, most of the stocks that comprise fang. i think essentially you had a company whose valuation may have gotten a little bit over its skis. rising interest rates, threat of a slowdown and the specker to of regulation took the stock down. i think jeff bezos actually lost the value of nordstrom

personally yesterday. his net worth declined $9 billion but i would argue from strictly economic, business, shareholder standpoint, amazon has negative been stronger. wherever they bump up against any big tech companies they're winning, charles. charles: your issue is society al, cultural? >> no, my issue is when you have one company that controls 50% of all e-commerce, that small companies never get out of the crib and large companies are prematurely youth thannized who tend to be better taxpayers and employers. it is great for shareholders to have shares in a company effectively monopoly in growing economy i would argue that, we have a proud history of moving in on companies in terms of antitrust regulation and we're at that point in the economy with amazon. charles: it is interesting that you would say that because another big story is the demise of sears. you could argue in many ways sears was amazon of its day. you could buy a house. you could buy firearms.

you could even order groceries. now we've seen, with the markets and creative destruction led to the demise of sears. you could make the same argument, i remember when walmart, folks were saying we should break it up, it is too big, growing too fast. what about the idea that the markets ultimately do perhaps what you are suggesting we should do legislatively? >> i think that is a fair point. it's a good argument. you're right, walmart was hauled before congress when they were at 11% of retail, and amazon only at six. i think a more apt analogy would be railroads or ma bell or standard oil where we decided, effectively the markets were no longer competitive. you now have a company puts out a press release saying it will address health care costs. we don't know if that means they are giving employees gym memberships or starting an hmo. on opening bell, charles, the health care industry sheds

$31 billion in value. when one company can take any consumer company by press release i would argue the market is not competitive. the key to the great system of capitalism, no one player has one player. i think if you broke up amazon shareholders. aws the two companies in aggregate might be worth more than the two companies combined. good for the shareholders, good for the company, good for the planet. charles: i get where you're coming from, scott. i get to your point companies selling off with amazon news, a lot eventually rebound. i remember way fair going down 60 bucks when amazon was getting into the furniture business and the stock rallied significantly. some of that is overreaction with the stock market. always a pleasure having discussions with you. hope you come back real soon. thank you very much. >> thanks, charles. charles: coming up president trump, of course he touted the success of the stock market and the economy as well.

after yesterday's selloff though, many are wondering if that could hurt the gop? obviously the media will focus on it. bret baier will discuss it the next hour. before that we'll talk with health and human services secretary alex azar and what he and the president are doing to lower drug prices, curb e-cigarette use among teens, now helping those afflicted by the hurricane. that's next.

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charles: all right, first rally attempt failed. we're back down to the lows of sessions down 100 points. it is down 94 right now. nasdaq hanging in there just slightly but you know, ashley, this is to be expected. ashley: it was. we know volatility. to a point made earlier we expect 5% shakeouts maybe two or three times a year and there are those who believe we need this we could see more downward pressure today, there is no doubt.

10-year yield, one of the big items created the skiddishness is actually down, down to 3.17%. we also got some consumer price inflation that was not as much as expected. that said people are reevaluating the valuations, especially as we kick off earnings tomorrow with the big banks. charles: thanks a lot. president trump signed two bills aimed at lowering drug prices yesterday. here is what he said about it. roll tape. >> in less than two years we've taken unprecedented action to make health care more affordable and to give patients more choice and more control. the american people deserve a health care system that works for them, not one that takes advantage of them and that's what's been happening but we're changing that rapidly. charles: joining us health and human services secretary alex azar. secretary, thanks for joining us. >> glad to be with you, thank you. charles: let's talk about this. it is obviously a major problem,

a major issue. i know back in the summer ap did a big survey after president trump discussed maybe some of these drug companies lowering their prices in june and july. 395 drug prices went up. only 24 went down. this will be a tough nut to crack. >> this is a complex system and we talked about the beginning how we have to change the entire system but here are the results. since the president announced his drug pricing blueprint we started taking action. there has been a 60, six, zero, percent decrease in the number of brand price increases compared to the prior year. that is a real impact for patients, real savings. charles: what drug companies say it is a long process. you've got, you know, fda approvals, one, two, three. you put in a new drug application and you go through all the efficacy things. you get a trucks put it on the market and at some point the

generics may undercut you. the window of opportunity investing billions of dollars is so small. is there something can be done the way the system is designed now to perhaps incentivize drug companies to keep them at certain lower level longer? >> that is exactly the right question. right now every incentive in the system is to increase the list price of the drug. every player in the system makes more money if you increase the price because they're getting a percent of list price. so we have to change those incentives. that is what president trump and i are working on, how can we reverse the incentives. it is nice 15 drug companies cut prices of their drugs or reversed price increases or committed to not increasing but we're not counting on their good wil or altruism to create the right incentives long term for enduring change. charles: next one, mr. secretary. you wrote an op-ed on

e-cigarettes this morning. i want to share with the audience the headline, quote, we cannot let e-cigarettes become an on-ramp for teenage addiction. make your case. >> i'm a parent of teenagers, i'm very disturbed by what i see with e-cigarettes and vaping among teens. it is morn to have e-cigarettes who are addicted to combustible tobacco products as an off-ramp for them because it is better than combustible. we will not allow e-cigarettes and vaping to become an on-ramp of to become addicted to tobacco products and which will have our full force and authority to combat that. charles: philip morris says their goal is non-combustion product. they're working toward that. it that there is future, there are benefits even with e-cigarette, perhaps the same teens would go straight to

cigarettes. maybe there is some buffer there. do you buy into that at all? >> we don't buy into any youth going in using e-cigarettes and vaping billioning addicted to nicotine. that is not right. there can't be marketing to them. we asked manufacturers of these products to come forward with an action plan to convince us they have the ability to prevent youth getting access to and becoming addicted to e-cigarette products. charles: what are you looking for to get rid of flavors and cute names? sort of like, you know, you know, everyone understands the things that sort of draw younger, younger kid in. candy king we're showing on the screen right now. can the government get them to do that? >> first off we've gone after those manufacturers have put products on the market basically replicate candice and other products. we've actually taken action against them. that is part of the process with the e-cigarette makers to look the all the marketing practices. are they doing anything to

entice youth to find the products attractive. we've seen in the last year a loan a shocking increase in utilization and pervasiveness of e-cigarettes by our teenagers and we're not going to put up with that. charles: secretary azar, before i let you go, we talked about the branded drug prices. what about on the generic side? what is being done to make them more available. >> i have breaking news for you here on the show, first-ever announcement for fiscal year 2018 fda approved the highest number of generic drugs ever in history. that is 971 generic drug approvals. 781 of those are full drug approvals. another 190 are tentative approvals and what's really important, 12% of those approvals were for complex, difficult to make and construct generics like the epipen that we approved. so a huge advance for competition and lowering drug prices. charles: hey, we always appreciate it when you come on.

we love it more when you break great news like that. secretary azar. thank you very much. >> thank you. charles: almost 60,000 homes were in the path of hurricane michael which could mean a lot of rebuilding. i'm wondering do we have the manpower, even the equipment, to make that happen? we're all over it next. allstate is adapting. with drones to assess home damage sooner. and if a flying object damages your car, you can snap a photo and get your claim processed in hours, not days. plus, allstate can pay your claim in minutes. now that you know the truth... are you in good hands?

charles: i alluded to this earlier in the show. once the first rally attempt fizzled we knew we would pull back. consequently we're going even lower. this is not uncommon. buckle up, it will be another wild ride and it is. now major averages at the low of the day. now nasdaq is looking lower. >> >> share this with you. drone footage of massive damage left behind from michael. we have a associated builders and contractors ceo. the question really is, michael, we heard about a lack of manpower with respect to the construction industry. so we're wondering do we have enough people to help rebuild? if we do, do we have the equipment to rebuild? >> charles, thanks a lot. great question. first of all, thoughts and prayers to those affected by hurricane michael. it's a very, very sad moment in time. the american engine figures out a way to get in there to help

with the recovery and rebuilding process. despite a workforce shortage. with that, to get fully recovered, 100%, it will be years. our members are in communication and have prearranged agreements with federal, state, and local governments, insurance companies. i was talking to one of our members last night, brass field, they are working with hospital clients and businesses in area to have business continuity and recovery next week. united rentals has hundreds of equipment ready to go to begin the process. it will take some time. people need to be patient. safety is the number one priority. before reconstruction can even begin in those resources diverted to this area, we've got to finish the recover i, search-and-rescue missions. we've got to get rid of all of this debris. we have to get rid of this water down there and help recover the

stormwater management systems so we can get power up and running. because without power, the recovery process really can't begin in ernest. charles: only got 30 seconds. the funding of all this, where does that come from? >> the funding will come from part of the federal government through the fema insurance as well as the insurance companies. businesses will be utilizing their insurance, you know, property damage insurance policies to do their recovery as well. so for those who have good coverage, we'll be fine. it is just going to be a matter of time before we can begin this reconstruction process. after we create the conditions that work can be done safely. charles: wow, thank you very much. appreciate it. >> thank you. charles: president trump will sit down with kanye west today at the white house and they will talk about prison reform, preventing gang violence, violence in chicago specifically.

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charles: good morning, 11:00 a.m. in new york. two stories we're following from you on the left on the panama city beach florida where people are starting to assess the damage from hurricane my goal. of course, watching the market after big selloff and we've got the news. the white house as a meeting between president trump and xi jinping is under discussion. if it happens it would take place at the g20 summit next month. so where does the market go from here? market watcher dan shafer, shafer asset management. you show me a chart. that right there. >> you know what, we should've put up a warning. all of them are out of the room.

what is the chart tell us? >> this is a correlation which is 95% correlated between 1934 and where we are today in the dow jones industrial average. they did the exact same thing in 1937 that they are doing now and that is raising short-term rates where there is no inflation. the cpi number in the core number came up this morning. everybody keeps thinking there's inflation. charles: why? >> you talk about the government telling us this. they want us to believe that there's inflation out there. i go out to flea markets, stores. i can't believe the prices. this is deflation and it's going to get worse. commodity prices, sugar, cocoa, they are down, not appeared soybeans -- where's the inflation? >> president trump is onto something with his criticism of the federal reserve right now. >> years ago i wrote the federal reserve should be abolished.

it doesn't do free-market thinking. fixing rates the way they believe the economy is. and they find their own levels, they would be lower right now. and the federal reserve buying bonds and putting on the balance sheet this is going to blow. 40 billion a month, $50 million a month. that's a heckuva thing for this economy to absorb. >> yes, absolutely. it is not on the federal reserve is holding this debt, but that is now three times greater than it was in 2007. that is a problem, too. triple b. bonds are now three times the amount in 2007. all of this leverage all over the world because everybody bought into this low interest rate environment.

when i get called, what's going to happen? assets have to be sold. i see a deflationary depression coming. that's where the dollar gets really strong. charles: deflation prices go lower and incomes go down. if that's the death spiral we always want to avoid your >> that's correct deflation you can control. inflation you can. when interest rates go to zero in deflation is creepy lower come you cannot stop it. it has to work its way through the cycle. charles: you should know such he sat down to dallas off another 40, 50 points. >> well, i'm sorry. the other part of the chart is a free fall. 1937. so you are suggesting we are on the cusp of a straight freefall. >> based on historical analysis and tie them into debt and taxes

being reduced and corporations, the whole thing is now beginning to show up like i hate to say this, but the roman empire which was broke come in the ancient greeks who are fighting antigovernment levels. they were in fighting above and like we have now with the republicans and democrats in the civil issue. all we need this would have been during the 1920s, 30s, the dust bowl and more shopping to the ancient egyptians coming in on the water. you put those two together, and charles: how do we avoid history repeating itself? >> that's a good question. i don't think we can. there are cycles that just occurred. in this expansion phase of what we just went through similar to the 1920s. trained to 20s. train to the gallon off 100 points. on 300 points. again we saw this a couple times

this week and even last week or whenever rally attempts fail, the selling started coming in. some of this is associated with these machines, algorithms, programs and place, and not selling triggers another selling. how to incorporate that into this modern history. >> let me explain that. i have computer designs and stuff. if you're not going to blame the algorithms, why on the way down. >> when they go up like this, there are times when buying begets buying. when you turn around were up 100 points less than an hour ago. now we are down 300 points. >> its lack of liquidity. traders have pulled back so you're not going to get the bids and that's the liquidity issue the fed has taken out of the market slowly seeping from the

market. the risk becomes greater. the volatility becomes greater. it's not the algorithms. it's the fact instead of having a billion players, now you're down to half a billion players. that causes a problem. charles: trades are still going on. >> issues are hitting the wider spread. they are still there in the market have liquidity. charles: were to fundamentals playing your work? we are on the cusp of earnings season. we've had some warnings, and that they live up to the hype, don't ultimately earning stick tape for stocks go? >> they do. we talked about this on the phone yesterday and this is an point. the market is a predict her of six months to a year ahead. if the market rallied to where it did set the all-time high in all these earning expectations coming, that is great. but when the market starts to go down as the earnings come in

higher, that is your signal that there is a turn coming. it is telling you in advance. train to the market having an epiphany. less than two weeks ago the market was an all-time high suggesting to your .6 from now everything was going to be fantastic here but with the epiphany in one week? >> what was the epiphany in one week? charles: maybe it won't be okay, maybe a c. in 1830. >> i think judge kavanaugh trial -- not trial, but the whole thing was a dangerous social peace to our society. i think what hillary clinton saying what she said, i think with eric holder saying what he said, i think now we are now in the social shift of what people believe. knocking on the doors of the highest court in the land. charles: without peace there is no prosperity. great talking to you. the dow came back about 70

points. we will go on get back to tropical storm michael could join us on the phone is jeff rogers with the goal of power. how are these guys managing power outages? where are we right now? >> i'll tell you what appears as the storm has cleared up this morning we've got thousands of cruise on the panama area. the first will be working hard to determine where the issues are in the damage are to be able to page materials and get the priorities correct so we can get working again power and i hope resort to these folks. train to the biggest obstacle so far you're facing? >> well, the good news is we fully restored powers and now we're headed to panama city. the biggest obstacles we are seeing there is just the widespread devastation, and the damage, the materials in the street, polls everywhere.

certainly before bigger bucket trucks get in there, there has to be a lot of road clearing to make way. fortunately, our smaller trucks can get in and start a lot of the evaluation process so that strategic plan for rebuilding can get it together and start right away. charles: we've spoken with officials power company, elect officials. you know, one of the thing and everyone applauding scenes to get better and more efficient. the question now is how can we even mitigate the damage from the storms so people don't necessarily -- are necessarily in the dark for a few days or a few weeks. >> it could be up to a few weeks and some of the harder hit areas. the great news is there's a lot of manpower on the ground. it is just coordinating the manpower, boots on the ground to get power back up. you've got other facilities the utilities will have to be restored as well. and not to mention if you see

some the video as i'm sure you've had come in just the devastation to structure is irma grocery store to the homes. the things that make life normal for folks. train to just come in thank you very much. appreciate it. we know you're very busy. thank you for taking the time. train to individual stocks. sears, big lenders pushing the company to liquidate its assets. he won't throw them another lifeline either. the stock keeps going down. pass off a little bit this morning. news out that they actually outsold mercedes in this country for the first time. and it's happening today. president trump will have lunch at the white house with rapper kanye west. we'll do without coming out. 25 days with luncheons are battling to maintain congress. i want to know what happens at the selloff continues. stay with us. the third hour of "varney & company" just getting going. by the way, take a look at the

big word. some wild swings in the past 10 minutes. dallas 300 points. it is early and it's already wild. we will be right back. eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

charles: checking the big words fell off gaining even more speed here. want to check on the specific stocks. they account for almost half of the dow so far today. make donalds with an outbreak yesterday morning. boeing, 3m, travelers and chevron. liz: yeah, here is the thing. i think what markets are looking towards is what the forward outlook would be and the corporate earning reports coming out. we've talked about the walking as in the haywire and is coming out of louis vuitton and tiffany having problems with china. the retailers get stocks in china and cracking down in various ways and his companies.

so many financial assets are paid to the treasury yield ashley: we are far from neutral and find the sweet spot for rates to match whatever act. period the economy is running hot. it's doing very well. inflation is not keeping up with us. i think that's a concern. charles: we were doing okay today. president trump meeting with president xi and larry kudlow. if you can time than everyone

wants to see it over at some point. that's a big disappointment for the market. liz: we have an october surprise. the markets fell out of bed and fell down the stairs yesterday. seeing a repeat of yesterday. the u.s. dollar hitting a 10 day low and china will manipulate its current. president have different officio the obama years and that officials with the dovish evidence of chicago saying they should be a positive 3%. in the reserve, rob kaplan sees some inflation and thinks there should be a spike in prices and rates.

>> a weaker dollar should be helping these multinationals. the market currencies. if we can get the dollar down there should be a positive. i pull up a headline from august august 25th. bush spends 1992 election laws. presidents are very worried about the power of the federal reserve. >> the fed 2005 when we didn't know what they would do with interest rates. i think that's what's important. we still don't really know. fall on the fed above are going to do with race. the fed is going to raise rates this year. looking for another hike in december. i'm not sure the fundamentals of the narrative has changed at

all. it's the same story. charles: let's bring in keith fitzgerald. give us a news. we've got some reports that larry kudlow saying maybe president trump won't meet with president xi of china. now we get the same thing. of course the snowball to boulder that we saw yesterday. when it picks up steam, move out of the way. >> this is all about psychology right now. nothing to do with fundamentals and economic underpinning. nothing to do with the fed. perception is everything. that is what traders are dealing with today. i'm expecting a little bit more selling. i think this is normal. i do expect it to snowball by the end of the day of panic comes in from the edges. take a deep breath, let the

institutional type duke it out. you've got the advantage here. >> is one of the advantages at some point been able to buy this? >> ringo. that's exactly right. the thing most individual investors don't realize is the institutions have to keep their money moving. that's how their portfolios work. individual investor, we can take our choices. we can pick the specific companies we want and make our move at a time that benefits us as individual investors. it's important on a day like today and yesterday we have 1100 points to the downside that chaos always produces opportunities. you've got to take a deep breath, and maybe get a libation, sit in your favorite easy chair. but, chaos always produces opportunities. charles: do you have some numbers? again, we talked yesterday about the 50 and 200 day moving average because they are

important and a lot of money is traded based on those. we violated the average for all the major indices. i want to start to nibble at least. >> i'm lucky not company is that will resume one way. stuff on page 12 of "the new york times" to come back charles: it's called good trump news. >> the first page of good news is when you make your guide. everyone's been bled out. in the meantime, you just give your spouse come your partner a hug, take a nice talk with your dog, go for a motorcycle ride. but the big boys play this out

because you don't want to be in the way of a steamroller. charles: keith fitzgerald, the headline count i think 100 years from now we'll be talking about the dow theory in keith fitzgerald headline count. thank you very much. good stuff, my friend. appreciate it. charles: doesn't seem normal for market having 27,000, 10 year expansion. charles: were still in the midst of that. the numbers get bigger. the percentages aren't anywhere near breakout territory but we get a little scary. bring in our buddy was very bullish yesterday, very bravely facing this market selloff, but shah, advocate lower you might maybe sharpen your pencil little bit and take another look at this thing. >> we are not there yet, charles. we've got a bit before we get nervous. it's unusual for the market to continue to sell off after what

happened yesterday. certainly going to be orders lined up if they're going to be nervous that's understandable. we had a little bounce in the morning especially in the guilt of the future is being done and coming back before the open. that was fun to watch. i wasn't so sure, but it tells you that when we dropped like this so quickly again, that's programmed trading. stock orders that are out there being triggered based on algorithm and there are no reasons for there to be strong bids coming in to buy stocks because there's a lot of nervousness. they try and get out of the market and push it down and everybody who's standing there as of yesterday said mis will come because i don't know how low it could go. this is a knee-jerk reaction. this does not worry me. it's not an expected. liz: shah, it is e-mac here.

the small cap russell 2000 is now in correction mode. that is sort of rattling the cages down on wall street. these are the companies that are usually impervious, not really sent to dave to trade concerns. is it because the u.s. dollar is weakening, basically its loco comments. >> i don't think the dollar moving up or down -- liz: what is going on with the russell? >> i think it's in correction mode because the market has been doing so well is because of the leadership stock and the rest of the market are all part of the big eps index funds. when those start to sell off we start to see the selloff. the rest of the market where they are not in the big e. t. s., they are selling off. they have been selling off.

there's been a lot of internal rotation or some of the stocks follow the market up and people to profit and they've been selling out for sometime now. there's been a lot of folks talk about the market being pretty good. it hasn't been good. focus on the index and they look good and right now, they're holding on. 25,000 on the dow. a lot of psychological support. if we break through that going to have to rethink for the near-term. charles: in the meantime, since you've been talking about 120 points. we will call you back. you can believe that. thanks a lot, shah gilani. ashley: i was just wondering how much earnings season is as a year from the big banks tomorrow and as we go through how much that may stabilize this market depending on what we hear. but 20% growth in earnings

year-over-year, third straight quarter. the question is what is going to be in the guidance? whether earnings will help the market or just add to the jitters. >> one thing i always look at in the premarket or parameters and we were down 350 points. some point the session they would've tested. now it's going to be interesting to see if we can get momentum back to the upside. it works a lot. that's why it's important to watch the markets reopen if you can. it does give you interesting parameters and that's what happened today so far. i think there are some financials in there, too. a lot going on, folks could develop 200 points. a minute ago down 320 points. we have more "varney" in one minute.

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economics. brien, your main concern i understand are the terrorists. >> yeah, we've had a net zero government policies since late 2017. we had a really terrific tax rate cut, exactly what we needed. now we are counteract in the policy with increases in terrorists. the market doesn't want net zero policy from the great procession. it wants net fiscal retreats. we either have to have a weak commitment to free trade were very significant tax cut number two. charles: i guess people would argue do we have free trade with respect to our relationship with china? >> well, now we don't, but the administration wants to increase trade barriers which authority existed here that leads to a net zero. we remove the government from business decision-making and private enterprise with the tax rate cut. since the summer, that tax rate effect has been diminished so the market is causing.

charles: i look at the market very closely and i think we've got an amazing rally from the march 22nd, march 23rd in the trade were officially began. i feel the big down day is associated with fed hiking rates. this week, the very second, february 5th and february 8th. none of the news was associated with trade. i'm not sure that the market is afraid of the trade were as much as the experts say it is in most of the pain and the market has been driven by higher yields and where the fed will be next. >> every down day in the market has to do with financing relationships that buyers and sellers may have. even the medium term, let alone the long-term, money comes from the mass amount of $0 the trillions that are completely out of the reach of the federal reserve. all of that has to do with the real global liquidity basis. any kind of medium and long-term, the market cares about the fiscal position of the united states more than

day-to-day moves by the federal reserve. >> you that as it may come in the fiscal position has been deteriorating. since china has the world trade organization, and the global gdp has soared. we went from 27 to 24%. the intellectual property at one point would be on stealth nuclear subs that would blow our side of the water. as the market care about that kind of stuff? >> i think the initial promise of the trump trade policy, which is we are going to get serious about real free trade so we can bring tears down to zero and have really good business practices globally. the market was that. as china has brought back in the civilized world flirting with communism, the market will really appreciate what donald trump is doing. if the status quo is barriers around the world, the market will want to see significant further tax rate cut in the

united states if it's a race to further levels. charles: that would be a political issue centered around the midterm election, there is no doubt republicans would love to do with tax cuts to point out. in the meantime, there comes a point i guess when you sort of have to push back when the momentum is against you. are you happy with the progress that the e.u. india with south korea and negotiations with japan. >> it's okay. there's a lot of industrial policy in the free trade deal with canada, which is to say certain certain guarantees or american auto workers about jobs and wages. it's best when the government clears itself out of the way of business decision-making. it's better than nothing. we got it. if we got that thing with china, you see a resumption of the market in full form.

we have elected officials who more often than not to reelect good. >> it might be smart for this republican, the new republican. the blue-collar workers who changed voter for president trump in the general election may be will continue to support the party. >> those blue-collar workers try to get ahead in this country. they try to buy houses, but then i stayed away. have some investments on the side, all of that happens when their significant economic growth. we get significant economic growth in the government retreats from taxes to the regulation and spending. charles: we all should be happy on that one because her singing from the same state when it comes to bat. thank you for joining a conversation. >> we are going to keep it on the market. the dow jones industrial average fell 200 points.

we will of course carry other stories, particularly this one. president trump will have lunch at the white house in the next hour with rapper kanye west. urban revitalization coalition, what are your thoughts about this meeting? >> it's going to be great. kanye west despite what his critics say has a social conscience with passion for the black community, passion for his home city of chicago and it's going to talk to the president about prison reform, bringing manufacturing jobs in chicago and help stop the violence. i think he will be a very, very good meeting despite what people try, how people try to spin it. charles: growing up i can remember one of the big complaints from the black community has access to power. getting in that room, having them listen to our story. and now you have people, you

know, who are invited to decide not to come. a lot of nfl players have been invited to the white house. i'm not sure any of them have taken the invitation. initially he accepted. he was talked out of it. how do you explain this? why are we doing this session marked by what may have a chance to go to the white house, the most powerful office in the world to plead our case is, state our case to take a stand returning it down and then critique and criticize someone like kanye west for doing it. >> they're going to stand outside of peak in the window and criticize the people on the inside. i get that all the time. i've had a conversation with him about him coming on board with our urban revitalization effort. our youth empowerment component. you have people such as cnn, the cast of clowns over there that rationalize in black black insult. you have does that make a living. if we had a true racial harmony

in this country a lot of people would be out of business and they cater to the vic in the station mentality. as long as condi rice perpetrated himself for as long as he does perpetrate in south pacific to of racism, then he's a hero. when he steps up and begins to talk about black empowerment misspeaking the power, speaking truth to power, having a seat at the table, those that deny the seat will criticize ct sitting in. it's ridiculous to me. it is 79. charles: it's very offensive to me. growing up that's the kind of bully and if you are a black kid in you like certain music come you like certain things do get teased about, bullied about, punished about being called a token, being an uncle tom. you just keep it to yourself and it never grows. that number becomes what god gave you to become because those around you and make you feel little and belittling you. adults that i otherwise admire

those people. i don't know why they had to go there. it was really her fault. >> i was just going to say, cnn is using blacks to assassinate the character of other blacks. they have the fake sensitivity to every other marginalized group. but they try to use blacks to assassinate the character of other blacks, which is what they did with condé west. it's very unfortunate. it's very stupid and i don't see how they would allow themselves to be intellectuals or whatever they consider themselves to be. i don't see how they allow themselves to be used like that against one of the room. charles: i can only say i hope good things come out of this with prison reform. we know kim kardashian had success. thank you very much. >> thanks for having me. god bless you. charles: president trump evoking

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the volatility in opportunity. to your point, charles, the fundamentals are still strong. >> it's not out of the norm to have it down like this. they were a solid. now seeing a bunch of them in correction mode. >> in fact some 80% of technology are in correction mode, down more than 10% from their all-time high. the market we see some green on the screen there. i would not be surprised if we have worn more valleys to the upside. we will put it all up for you. in fact, more "varney" right after this.

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we are athene, and we are driven to do more. charles: the big board the big board now with 215 points, but the nasdaq was up it this morning. transfer we're looking at the nasdaq breaking below the 200 day moving average. we haven't seen the not at 100 getting smacked like this. we are talking the markets. we are talking about apple, amazon, netflix. those are getting smacked hard and so is facebook. what is happening here is different individual issues for each company not as in the aggregate. facebook user growth is tepid. amazon looking for whether their proper report and guidance comes in a little out of whack. netflix has been on the tear. the stock has been up sob solid double digits. people taking cash.

liz: does that mean the bloom is now off the road since they done so much heavy lifting for so long? charles: we came in so many days my fears and expected amazon stock to be a 25, 30 points. i think we are reminded on a site that can go up 40 points can go down 40 points. that's the way the market is. >> we were out i think 10 or 12 to the downside. and it was in this tech stocks. but these are the big game changers, the big generational game changers. ashley: let me just jump in here because the president again raising interest rates and policy crazy. the fed is out of control. says that the fed is far too stringent making mistakes. he says he is not going to fire

the fed chair powell. he's just disappointed but we will have a report out soon on the journalist who should be. that's the whole right turn on a different story. these are the headlines coming out. bottom line, the feds are making mistake. he's very disappointed in on another story which we haven't talked about today, the saudi missing journalist capote. we'll have a report on that. which is interesting because how much did the u.s. know about this disappearance? what are they doing with the saudi's with regard. charles: over two dozen journalists killed around the world. it's an amazing story. by solomon, he was lured out of america, back to the middle east under false pretense in order. ashley: the original report was the saudi's which were trying to lure which is very critical of the crown prince and the royal family, tried to get him to

saudi arabia. that didn't happen. they say there's no way i go to saudi arabia. >> he goes to turkey, into the saudi consulate, goes and never comes out. charles: is that a special guest from a special report now. i just want to ask you, the mainstream media didn't talk a lot about this market rally on the way up. but we know they're going to talk about it a lot on the way down. how much could this hurt the gop in the mid-terms? >> it becomes an issue, charles. the president obviously when asked about the federal reserve and people don't always fully understand the fed and how that interacts with the market across the country. i think most people look at what has happened since the president took office and where the market is from that point. but if you have these big market foulups, obviously it could have

some effect. charles: by the same token if the media does mentor there because i remember these kind of articles back in february and march. today president trump lost a trillion dollars. these sort of records started making a six, seven, eight and nine. the big issue in the midterms feels like this post kavanaugh awakening if you will or push back. every poll that i've seen this week with dramatic improvements for almost every republican in every single race. what you make of that? >> that is true especially on the senate races. there are some that have turned around, specifically arizona, indiana, some places where it looked like it was going the other way. the kavanaugh affect has had a big impact. i'm not sure, charles is the suburban house districts that were already under water for the president's approval rating will shift that much on the kavanaugh

situation. the republicans and the president has really tapped into something about fighting extremism, fighting what they are calling mob like activity. it is kind of working and there are examples every day that somehow fit into that narrative that get picked up. charles: the most recent eric holder, when they go low, kick them. hillary clinton saying we will be civil once we regain power. these are the big honchos in the democratic party that are doubling down on the so-called mob mentality. even some suggesting are echoing singing violins, certainly aggression is okay. >> yeah come you saw today in an interview michelle obama saying that it's not okay, saying that fear should not be a motivator. that is just interesting. she was the original person who said when they go low, we go high and that is to eric holder

was quoting. she is coming out pushing back. there is a split in the democratic party and 26 days before the midterm election you kind of want to be seen in on the same sheet of music and that is what the gop is doing currently and we will see if that translates day after day. as you know, new cycles are like six or seven a day now. charles: i think we've had six or seven this morning already come as ashley with the market. just to piggyback off the real quick, the gop has remade itself in the image of president trump. this is tom's party appeared on the other hand, who's in charge of the democrat? it looks like it's in total disarray. younger democrats embracing democratic socialism. the older ones jockeying for positions just in case they do when. do we need another 80-year-old leadership fight over there? >> that is fascinating. if you ask anyone who's the lead of the democrat party, there's not a single answer.

they will likely coalesce before you get to 2020. probably 17, 20 candidates running for president. who is sick, nancy pelosi, chuck schumer, bernie sanders from elizabeth warren? what if the elevator pitch to make to people in the middle of the country? why give them the reins of power? i don't think they're all singing from the same sheet of music on that pitch and that's why it's a little bit tougher. charles: i do on a thank you for coming onto brief comeback in the point and two started talking. thank you very much. folks are looking at it right there. the dow off 127 points. off 220 when we began that interview. there is your chart. those are important numbers. we've got the parameter set and it's going to be a wild day. a bunch of ups and downs all morning long. we will have it all day long with a lot more markets when we come back.

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one good thing we can say we were discussing it was the

fastest hurricane anybody has seen. it just was speedy. absolutely nothing laughed. it was incredibly powerful. we have been the destruction. it is moving through georgia now at a much lesser pace, both in terms of speed and in terms of its power, 50, 60-mile an hour winds. some winds reached almost 200 miles an hour which is unheard of. the third most powerful they've seen hit our country anywhere. rave reviews first responders, law enforcement, everybody's got rave reviews. i just spoke with governor scott there've, very happy. now following the hurricane being brought in. we have unbelievable large amounts of water and food and everything people can want. the electric companies have been terrific. they are already working, many trees are in the path of the

electric companies. the roads are being cleaned right now. for the most part they get the electric companies in an allotted electricity is already back on. some of the electricity are due back on. following up in georgia. a lot of water will be in north and south carolina added to the horrible situation they had with florence two weeks ago. they are incredible people and they know how to do it. they've done it before and i'll do it again, but they know how to do it. we have had great reports and everything. the big problem with this hurricane was the tremendous power and fortunately it was very fast. went through florida very, very quickly. he didn't linger, didn't come back as we had in texas. they came back a second time and a third time. went out, filled back.

this one went very quickly but his tremendous distraction in the areas where the path that it shows is incredible that kind of destruction. we've not seen destruction like that in a long time. the rebuilding i could actually save the rebuilding process, we hope we don't have too much about. the area most affect did was hopefully 100% evacuated, but there's always somebody that saves them in this case they would have been in big trouble. so far the reports i've seen or very good. i want a thank you for that. i don't know if you have any questions on the hurricane. does anybody have any questions? [inaudible] >> yeah, very busy day today. as you know having to do with copyright music. to save the act of 2018 which is an important thing. yesterday i had a tremendous

rally in pennsylvania and we had thousands of people lined up. they were there for a day and a half before. people who have been standing in line for a day and a half getting into the arena. i went there. we had great control over what we and i think you're seeing we're getting getting tremendous marks for the job we did. i wasn't disappointing thousands and thousands of people standing in line some cases day 1/2. i wasn't going to do that. i think we've, i think we've really, really done a job. this is a particularly busy day because we're signing a number of bill. very different kinds of bills. you will see me a little while later, with a couple of the senators standing behind me right now. you will be seeing me and us in a little while, and, we're

having lunch jim brown, one of the great football players of all time and a great guy, kanye west, they're coming in for lunch. after that we're doing zoom interesting things and we have a busy day. i always have a busy day. the economy is doing really well. we think jobs will be better than ever. we think records are broken already but we'll continue to i can brat records. we'll talk about the save our seas act if we could. and again thank you all for being here. i want to thank also the members congress that are with us. that's senator dan sullivan, who has been absolutely terrific, worked along with sheldon whitehouse and these two have been spearheading something that is very important and we want to thank you both. sheldon,. >> thank you, mr. president. >> we appreciate it. you worked very hard. >> we worked well together. >> mr. sullivan, thank you for being here.

we appreciate it very much. we have secretary of commerce wilbur ross who worked along with the senators. acting noaa administrator admiral kim galadet you're here. thank you for being here, kim. thank you very much. great job you're doing. every year over eight million tons of garbage is dumped into our beautiful oceans by many countries of the world. that includes china. that includes japan. that includes many, many countries. this waste, trash debris harms not only marine life, fishermen, coastal economies along america's vast stretches. the bad news it floats towards us. i have seen pictures recently, some of you have seen them, vast, tremendous, unthinkable amount of garbage is floating right into our coast, in particular along the west coast. we're charged with removing it which is a very