maria: my thanks to james and dagan. great to see you guys. have a great day. "varney & company" begins right now. stuart: i'm going to seize the day because this is a day you seize, okay? here we go. good morning. maria: i like it. stuart: let's be clear here, it is a worldwide sell-off. it started in china, barreled through asia, europe as well and has now arrived on our shores. let me give you the numbers. the dow industrials will be down about 400 at the opening bell. the s&p down a whopping 38 and the nasdaq down about 120.

what's the problem? well, in china, they are worried the government will be able to stimulate the economy out of its slowdown. in europe, they are worried about italy's budget shaking the very foundations of the whole european union. look at this. from america, 3m, that is a dow stock, way, way down. 3m accounts for about 100 dow points, gave a weak forecast. down it goes. caterpillar also way, way down and also a dow stock. that hurts the overall average. boeing, another dow stock that is down today. there's boeing down 2%. we've got a bright spot, though. look at mcdonald's. it came in with a blowout financial report, same store sales worldwide up a whopping 4%, and it is up 2.5% in the early going. verizon, another bright spot. investors like its financial report. it is up nearly 2% in an

otherwise very down market. here's the big picture. investors will be asking themselves today if the glory days are over, if it's time to get out and walk away with some of the money you have already made, or is it a buying opportunity, especially for those big techs which are about to report their earnings? we will bring you both sides, all sides, in fact, on a big down day. "varney & company" is about to begin. stuart: the market sell-off right from the start. i want to bring in market watcher eddie gabor, a frequent guest on this program. welcome back. quite a day to have you on the show. in the past, you have said you are fairly bullish. you thought stocks would be going up through the year. are you pulling back now? are you saying something different? >> i am absolutely becoming a little more cautious as we head into 2019. stuart: what does that mean? what does that mean?

a bit more cautious? >> looking more at some defensive stocks and not being too overweight your high risk stocks that have a lot of volatility. stuart: would you sell some of them? >> i wouldn't sell unless you get a bounce-back and you were too overweight. i think right now, the key in balancing in this market is risk management. that's the key to the viewers here, making sure you have a great risk management strategy. stuart: what's a risk management strategy? >> if you are too overweight high beta, then -- stuart: i don't understand. >> you are taking too much risk right now. you have the high playing stocks, the chips that are moving, having a lot of volatility right now. you need to take some and be more defensive, in my opinion, on the equity side. stuart: should i sell my microsoft? i'm way overweight, if you want to use that expression, and i have made a ton of money. should i sell some? >> yes. stuart: okay. >> don't know if you like that answer. stuart: if you want to play defense in the stock market, what do you buy today?

>> so sectors that i like right now, i do like the financials. the financials have been beaten up, okay? so i'm a contrarian by nature. i would dollar cost average in the sum of your big banks. bank of america, citigroup, these type of banks that now that we don't have a flat yield curve anymore, they should have some good profit margins as we move forward. i don't think rates are going to spike as high as many people fear. one of the silver linings in all this volatility is i would not be surprised if the fed comes out in december and takes a little bit more cautious stance heading into 2019. that's a big concern for the market right now is how high is the fed going to go and how fast. stuart: okay. >> if they say they are going to slow down, that's a bullish thing for the equity market. stuart: stay right there. got more for you later. bottom line, you are much more cautious today than you have been in the past. >> yes. stuart: got it. hold on for a second. have i to get to the big

political and you could say immigration news of the day. the migrant caravan heading towards our southern border. i think it's about 1,000 miles south at this point. ashley: it is, and continuing to move north. president trump said this is his message to these asylum seekers. seek asylum in mexico. if you don't do that and you continue to the u.s. border, you are going to be turned away. legally he's on dangerous ground, because yes, they can apply for asylum in mexico and they have, over 1,000, we are told, have applied for asylum in mexico. others say no, we are heading to the united states. under the refugee convention that goes back the 1951, the u.s. is obligated to listen to their case. stuart: so one foot in the united states. claim asylum, you -- ashley: you go through the process, go through the courts, the lawyer gets involved. you could be here for awhile. stuart: rotten situation. thanks, ash. president trump on a campaign rally in texas, talking about the migrant caravan. roll tape.

>> and you know, what's happening right now as a large group of people, they call it a caravan, so as the caravan and look, that is an assault on our country. that's an assault. in that caravan, you have some very bad people. you have some very bad people. and we can't let that happen to our country. stuart: joining us, mike huckabee. governor, you heard the president. he's on it, he's going to stop them coming, but i want to turn this around. do you know what the democrats' plan is for when the caravan arrives here? >> sure. the democrats have a simple plan. open the borders, let them in. no real background checks, just one thing. register them to vote the moment they get here and hopefully they get here before election day. that's their plan, stuart. they believe in open borders. they do not believe that we have a sovereign nation and it's just astonishing that you have people

that don't understand the difference between immigration and invasion. and there is a fundamental difference. stuart: there is a total switch in the politics of immigration and it's because of the caravan. i don't think most americans appreciate what amounts to an invasion and if they hear that the democrats will welcome them in, i think that's a very big plus for president trump and a huge negative for democrats. where am i going wrong here? >> no, i think you're exactly right. i think the democrats don't understand how frustrated americans are that the democrats really don't have a message other than we don't like donald trump, if we get elected we are going to impeach him and everybody he appointed, we will open the borders, we will raise the taxes. their message is one that's counterproductive to even democrat families and independent families, and i cannot see this being a winning strategy. let me get back to the point. when you have this many people coming toward the border, you have some women and children in

there that probably need some assistance, undoubtedly, but that's not the bigger point. if some of these democrats who say let's let them in, i want to ask them how many will you personally take into your home, sponsor them, take care of them until you can find some way for them to get jobs and to be able to stand on their own feet? we are a great nation of immigrants. thank god we are. but we're not a nation of invaders. what we have here are people who are demanding that they have a right to get in. nobody has a right to go to someone else's country, whether it's someone coming to america or me going somewhere else. stuart: i want to take you back to the 2016 presidential campaign. you were a candidate. now -- >> thanks for reminding me. stuart: you always seemed to have a very good relationship with president trump, unlike ted cruz, who was lyin' ted back then but last night in houston, the president made him, what, beautiful ted or texas ted, i think it was.

how do you feel about that? >> well, i think you misunderstood, you cynical person, you. he really was not saying lyin' ted as in the animal, lion. he's the lion king of texas. that's what he intended to say all along. this is why i didn't say anything bad about donald trump or any of the other candidates on the stage, because at some point, one of us is going to win and the rest of us are going to lose, and then it's an awkward situation when you have said the guy's not fit to be in office, then suddenly he's the greatest thing since sliced bread and toothpaste. it's always a problem. stuart: yes, it is. governor, thanks very much for joining us. we always appreciate it. >> great to see you. stuart: by the way, in his speech last night, president trump promised another round of tax cuts. roll tape. >> we are going to be putting in a 10% tax cut for middle income families. it's going to be put in next

week. 10% tax cut. stuart: let's bring back our market watcher. at 10%, tax cut for middle income families, put in place next year. if it happened, would that be a plus for the market? >> i think you would probably so a short-term bounce but the bigger thing the market is looking for again is direction from the fed and interest rates, as well as the tariffs. that is a big concern, when you hear about these earnings calls and why some of these stocks are going down is because of the concern in 2019 growth expectations, because of possible tariffs. we need direction on the fed and tariffs and that's what the market needs to take the next leg up. stuart: eddie, thanks for being with us on a difficult day. all right. the president of turkey in an official statement said what happened to the missing saudi journalist who was murdered. what else did he say? >> preplanned murder. the president of turkey saying today in front of lawmakers in their country that 15 saudi

nationals he said arrived in turkey on separate flights in the days and hours before mr. khashoggi entered that saudi consulate in istanbul. he said they removed the hard drives from the consulate before khashoggi arrived and there are reports now, sky news saying parts of khashoggi's body have been found. they claim, a source saying found in the garden of the saudi consulate general's home in turkey. that is yet to be confirmed. also no mention by the turkish president today of audio recordings that are reportedly out there confirming the torture, death and dismemberment of khashoggi. stuart: all the leaks have come from the turks. ashley: that's correct. stuart: better check futures. we are down over 400 points. if we do open down 400, we will be below the 25,000 mark. president trump pushing for federal marijuana reform? that's the word from congressman dana rohrabacher. he's on the show today. we will ask him about that. the migrant caravan still

marching towards america. i want to know who's paying for it. judge napolitano on that. and an explosive device found at the home of george soros. rocks thrown at the office of a republican lawmaker. toxic politics indeed. it's getting worse. we are into it, next. think your large cap equity fund has exposure to energy infrastructure mlps? think again. it's time to shake up your lineup. the alerian mlp etf can diversify your equity portfolio and add potential income. bring amlp into the game. before investing, consider the fund's investment objectives, risks, charges, and expenses. read the prospectus carefully at alpsfunds.com/amlp

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stuart: it's tuesday morning and we are in for a sell-off at the opening bell, looking at a 400 point loss for the dow, which would carry us below the 25,000 mark. now this. an explosive device mailed to the home of george soros. what happened? ashley: an employee who works at his home, he has many homes, of course, this one in bedford, westchester county just north of the city, found this package, opened it and saw what appeared to be an explosive device. thankfully it didn't go off. took it out to the woods safely and then called police, who came out. it eventually was taken care of by the bomb squad who

deactivated it. question is, where did it come from? thankfully, no one hurt. fbi counterterrorism division now involved in the investigation. stuart: there's another toxic politics development. ashlry day. stuart: you're right. there was a rock thrown through the window of house majority leader mccarthy's office? ashley: kevin mccarthy in bakersfield, a huge slab, if you like, was tossed through the window of his office in bakersfield, essentially because congressman mccarthy posted photographs of the individuals he believes are responsible right there. he's on instagram and put next to it does anyone know these two guys. this has been as you say, a continuing almost daily litany of attacks on lawmakers, whether it's verbal or in this case, physical, smashing windows. the mob mentality. stuart: none of it's good. you don't want any of that in america. ashley: no. no. stuart: now something germane to the census. wilbur ross, commerce secretary,

wanted to add a question to the 2020 census. the question was, question is going to be, are you a legal citizen. well, the opponents thereof did not like it, they took it to the supreme court. let's find out what happened. judge napolitano is with us this morning. >> good morning. stuart: so what happened? >> a trial judge in new york said you can inquire of wilbur ross the reason for the question. the government appealed that to the circuit court of appeals and they agreed. the government appealed that to the supreme court and they said let's just slow it down. we are going to stop any questioning of wilbur ross until the end of october, by which time you can file an appeal of the whole thing. bottom line, others can be interrogated but not the secretary, because deposing the secretary is too disruptive to the government. but the underlying issue is one we might disagree on. i am with president george w. bush, who said when they come to my ranch and ask me how many people live here, i'm going to

tell them how many live, good-bye. don't ask me how many toilets, don't ask me what my education is, don't ask me where i came from. the constitution doesn't authorize that. stuart: there is nothing wrong with asking in the census are you here legally. >> correct. there is also nothing wrong with refusing to answer. stuart: is the question still on the census? >> yes. stuart: good. thank god for that. >> yes, it is, unless and until, they have six or eight months of litigation. i know you want to hear that. unless and until the litigation disrupts it. the issue here is can they stop, i know you want it on the census. stuart: well, come on. come on. are we not allowed to find out if we've got 10 or 20 or 25 million illegals in our country? we're not allowed to find that out? there's something wrong with that? >> we are not allowed to compel people to speak. the first amendment says you have the right --

stuart: i take that as a no. i'm not a legal citizen. get out of here. next question. texas republican -- i'm fired up about this. i see an army coming here to invade my country and i don't like it. i don't like being told oh, you can't ask them whether they're a citizen or not. >> you can ask but they don't have to answer. stuart: oh, yeah, okay, fine legalism. louie gohmert wants to find out who's funding this migrant caravan and suggests using racketeering laws to find out. i take it you oppose that? >> it's not a matter of opposing it. it's an extremely impractical way to get the answer. racketeering laws require you demonstrate the commission of crimes by the people doing the funding. the government doesn't even know who's doing the funding. stuart: that's true. >> treat them humanely and enforce the law and forget about the racketeering statute. that will take years. stuart: we may see you in the 11:00 hour. >> calm down.

stuart: i'm not going to calm down. >> ready to renounce the queen again? stuart: i'm not going to calm down. you got that? look at this. futures. this is how we will open the market. you want me to calm down on a day like this? down 450 points. our viewers are losing some money. i'm hyped up. here we go. wait for it. the megamillions drawing tonight, $1.6 billion jackpot. >> how many tickets did you buy? stuart: if you take the lump sum, you get $900 million. then the government taxes it away, half of it goes. what a rotten deal it is. come on. >> take what's left. vo: old and even inaccurate search results can

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stuart: i have to ask for more information on this from susan. $1.6 billion megamillions lottery drawing tonight. susan: it will instantly make you one of the richest people on the planet, even if you just take the cash handout. $1.6 billion, record-setting for megamillions. you have to win all numbers in order to get the grand prize but also, the powerball prize, $620 million. $320 million as well. so $620 million, picking up half of it because that's how much you have to pay out basically if you take the cash handout. stuart: shall i explain the economics of this one more time?

susan: okay. okay. stuart: yes, i do. okay. every $1 you put into the lottery, you buy your $1 ticket, 50 cents goes immediately to the government. only 50 cents comes back to the prize winner. susan: that's 50 cents more than you would have had. stuart: if you do win, having already paid a tax of 50%, if you do win the $900 million cash, you then pay another 50% in taxes, $450 million. i think that is about as bad a deal as you can possibly imagine. ashley: what do you walk away with? susan: you have more than you started with. you know that, right? stuart: one person out of maybe 300 million who have lost everything they put in. susan: you are paying for the right to play. stuart: do you approve of a taxation rate of 50% to start with and 50% when you come out? susan: if you pay $10 to buy a ticket and walk away with $300 million, i would be very laehap. stuart: have you bought tickets?

susan: absolutely. ashley: you wouldn't buy a ticket. my kids asked me this morning that saw it on tv, they want to buy tickets for tonight. stuart: you told them no. you should buy them a ticket each, then make them realize you just wasted money. thrown it away. ashley: teachable moment. i did not, i will not and you know i'm a guy about hope. this is selling false hope to people who should not be putting their money into this false hope. i think it's a tax, a low income tax. lottery is a low income tax. stuart: you put down five bucks, six bucks -- susan: one of my hopes, is it worthless to you? you are giving them $10 to have some hope. >> you have a better chance of being attacked by a shark than winning the lottery.

stuart: on sixth avenue. >> on sixth avenue. stuart: they're not prepared to listen to economic reality. might as well move on. the market is going to open in about four minutes' time. it's going to be down. i'm talking seriously lower. 400 points down. mike murphy is with us and first to you, d.r. what's pushing this down? what's the big deal? >> i think we are having a rubber band snap-back reaction globally to what happened in china on friday and monday, where china put some incentives into their market to try to pad the drop. we got a big 2% up day on friday, a 3.5% up day on monday, now the markets are going wait, those deals aren't as good as we thought. stuart: china started the ball rolling. >> indeed. stuart: mike, what's the problem today? >> we had china and then corporate earnings where big dow components are selling off. i think if you get the feel for

the market right now, there is definitely some fear out there. people are looking for reasons to sell. people are looking for reasons to lessen their exposure. i think that's a bad moment. corporate earnings will support us here. buy companies that are still growing. stuart: susan, do you have those dow components? susan: we have caterpillar reporting, big miss there. way down in earnings. that was disappointing from 3m as well. look at mcdonald's. we are looking at 13th consecutive quarter. big dow component seeing some gains. ashley: i think the rest of the world is slowing down and it's finally coming to bite a little bit. in this country, you have seen the industrials, caterpillar's guidance disappointing. industrials have been suffering. the housing market. the auto market. there are some warning signs there, enough to spook investors. forget about yes, you have china trade, always hanging over us and the fed who, you know, eddie said earlier maybe they will

change their mind in december. i don't think so. we'll see. stuart: you know, mike murphy, you have consistently been very bullish on this market. >> yes, sir. stuart: are you bullish today? >> i am. to what ash is saying about autos and housing, we haven't been on here talking about buying auto stocks or housing stocks. we have been talking about buying growth. we have been talking about buying, where you find big growth is in the big tech. we are going to hear from them starting this week and next week. i expect the quarters from the facebooks and amazons and apples to be phenomenal so this pullback in those stocks is a buying opportunity. stuart: buying opportunity. >> 100%. stuart: every single time the dow took a dip, you have always said it's a buying opportunity. because we are going higher. in the growth sector. especially the big techs. you are saying it again today. >> saying it again. i'm also looking at the banks. they are oversold, i believe. jpmorgan has given up almost all of its gains. citibank is trading down for the year almost 10%.

i think that might be overdone as well. stuart: we have ten seconds to go. buying opportunity? >> how about being even more specific than my brother, mike. this morning right now is a buying opportunity. right now. stuart: as of right now, as we open the market. okay. three seconds to go. it's a tuesday morning. we are looking for a huge drop at the opening bell. let's see what we get. okay. we're off rauand running. down 300 right from the get-go. 353, 357. that puts us back below the 25,000 mark. i can only see two dow stocks that are winners. mcdonald's and verizon. everything else is down. american express, not yet open but the other -- there you go. we have three that opened higher. down 430 points for the dow, below 25,000. that is a loss of 1.7%. show me the s&p. that's a 500 stock indicator.

>> it was 2673 at the end of last year. the end of 2017. interesting to see whether we will get below where we ended the year. stuart: the loss on the s&p, the same as on the dow, about 1.6%, 1.7%. all right, the nasdaq. this will tell us -- look at that. it's down 2%. a whopping 153 points. it's on pace for its worst month this october of 2008. is that right? worse since 2008? >> ten years. ten years. stuart: worst month in ten years for the nasdaq. okay. five stocks are really dragging the dow down. caterpillar is down 7%. 3m is down 6%. boeing, 2%. apple, nearly 2% down. goldman, 2% lower. as we know, we have got mike murphy, d.r. barton, susan li and ashley webster, all of us together.

i already asked the question why are we down. i have already asked the question, is this a buying opportunity. mike murphy says yes, it is. so would you buy those big techs now? >> i would absolutely buy them. i think amazon's quarter is going to be awesome. we bought amazon at $1700 and change about a week ago. but the market is the only place in the world where price of something you want to own gets cheaper and people get scared. if the price is cheaper, that's when you want to be buying. you don't say oh, now i want to sell. if you wanted to buy a car and it was 20% off you would say i'm definitely buying the car. if you like these growth stories, if you have been sitting here going do i buy amazon at $2,000, maybe it's overvalued, now you get it at $1700, that's when you start buying. stuart: you bought it on the expectation that amazon bounces straight back up again. >> i think amazon is where i'm finding growth. i want to be in amazon. i think their quarter will be phenomenal. it will be back above 2,000 soon. ashley: i mentioned key levels,

on the subpoen&p, you get algor kicking in. it was at 2710 when we opened and has hung in. it's now 2714. susan: that was a low for october. stuart: let me remind you, on october 3rd, that's about three weeks ago, the dow hit an all-time record high. 26,800. which means as of now we are at 24,900 so we have lost about 2,000 points since october 3rd. that's where we are as we speak. as you can see, the big techs taking on it the chin again today. facebook's just above 150. amazon is down to -- oh. are you underwater with amazon? >> i'm right here. 1741. stuart: you haven't lost anything yet. >> we bought facebook at 151 and it ran up to 180, 190. now we have come all the way back down. i think the earnings are what is going to bail us out. that story is still intact as

long as the growth is there. susan: you say that, but netflix, they were some pretty good numbers last week. subscriber growth came out way ahead of expectations. netflix is down for the month and the week. even if you put in high numbers, i'm just saying market expectation is so bearish right now you might not make your money back that fast. stuart: i do have news on one of the big techs, facebook. the former chief of virtual reality company oculus -- susan: cofounded it. yeah. he's basically the second co-founder to leave. the other founder left in 2017. again, it just shows you when facebook buys companies like oculus, like instagram, the founders eventually leave facebook. >> virtual reality. stuart: i always got seasick every time i used one of those things. facebook is only down, what, three bucks but testing maybe

150. that's part of the news background there. all right. as of right now, five minutes into the trading session, this tuesday morning, we are down 382. that's 1.5%. how about harley davidson? they reported this morning. better profit, better sales. europe's doing well but sales fell in america. not good. down 5% on the stock. rosy sales forecast from lockheed martin, clearly a defense contractor. they are down a tiny fraction, 30 cents on a $300 stock. better profits at biogen driven by double digit sales growth of its muscle disease treatment. not sure what that treatment is. the stock is up two bucks at $318. jetblue profit down because of higher fuel costs. the stock, that's year to date. what's the current price? don't have it right now. i believe it's down this morning. susan: down one-third. stuart: got it. higher profits and rosy forecasts from corning. that's driven in part by sales

in its specialty materials business, i don't know what that is, down 8%. that's a drop and a half. the judge reduces the jury award against buyers roundup to $78 million, down from $200 million verdict a couple weeks ago. they face thousands more salutesalute lawsuits, doesn't it? ashley: absolutely it does. they try to settle these things but it's not going away. this could drag on for years. stuart: it's down 10%. the vacuum maker, dyson, british guy, apparently, as i recall. ashley: sir dyson? stuart: he's just -- he's a nice guy. don't get down on him because he's upper class. dyson has chosen to debut its new electric car in singapore.

should tesla be worried? >> this particular thing isn't going to be worrisome. what dyson is most famous for, he's the lord of profit margins. they really charge a very high end price for their highly engineered products. they have a lot of good engineering experience, so it will be interesting to see. they pushed their delivery date back to 2021 for the first car. stuart: tesla, by the way, today is up four bucks. >> if i could make a point on tesla, elon musk changing the earnings date to try to have a negative impact on the shorts in the stock. buying tesla at 380, 390, i wouldn't do. i do not own tesla. at 265 going into earnings, the price seems to be getting a lot more close to where you would be buying the stock. stuart: really? okay. general electric has announced plans for a supersonic commercial jet engine. not the plane. the old concord. who is going to build the plane like the concord? any idea, ash?

susan: they have been working on this new engine that will travel at the speed of sound basically. gm built a lot of engines for the 787 dreamliner. this is supposed to make travel faster across the atlantic by three hours. stuart: but it's not the introduction of a new supersonic like the concord. susan: it is. stuart: the trouble with concord, it violated all the noise regulations in most of the airports. it flew at 58,000 feet and spewed co2 or whatever it was into the atmosphere. that's one of the big reasons why they dropped it. >> ge already knows a lot about supersonic engines. they built them for the military. they will be working with lockheed. they will have this out in 2023 for the business sector. not a commercial flight. i think they are going after, again, high margin business.

ashley: the question on ge has been what's left when they break apart the company and where are they going to get growth. it's good they are talking about an area where they can innovate and get some growth. stuart: you wouldn't touch them with a ten-foot pole. >> i own ge higher. $15. susan: that was smart. >> i'm going to pretend i didn't hear that. susan: trash talking. stuart: canada's company aurora, they go public today. it's allowed to be listed here because it's not an american firm. i don't understand that. susan: canadian, basically. there's talk they were partnering up with coca-cola to provide cbd in some of their health drinks which would be more pain relief for those that need it. but down before it actually lists. i don't know what this says about maybe the peak of the marijuana boom. what do you think? >> if you have speculative

money, the cannabis space is going to be a massive space globally. now that it's legal in canada, you have companies like cgc that trades here on the new york exchange, they received a $4 billion investment from constellation brands and the stock made a move from the mid 30s to 60 and now is back down in the mid 30s. i think for speculative investment it's a good place to look. stuart: do you own cannabis stocks? >> we do not but will be looking to buy cgc, canopy. stuart: okay. do you own any cannabis stocks, or would you own any? >> yeah, because the company does, and stuart, i think mike hit the nail on the head. this is going to be big but you have to be patient. you can't jump in every time it gets exciting and buy the big moves up. stuart: look at that. all the stocks on the screen down. >> sell the news moment right now. buy the rumor was months ago. now it's sell the news.

first public listed on the new york stock exchange. watch these high levels. stuart: bring it up to speed here. we are down 367 at the moment, after ten minutes of this market. off the lows. we opened down about 420, 430. now we are down 370. so the dow is off 370, the s&p off 42, all down about 1.5% to 2%. all those indicators are down. sorry to say it's that time, 9:41 eastern. got to say good-bye to d.r., that's you, that is correct. gentlemen, thanks very much. again, check the big board. down 362. lauren simonetti at the new york stock exchange, bring me up to speed on the traders down there. what are they saying about this sell-off? there's no panic, obviously. reporter: there's no panic. if you look at the vix, the fear gauge, the number to watch is

25. we are just shy of 24 now. we are seeing gold buying, gold is up $16. that's your typical fear trade. there are a lot of narratives behind what exactly is causing investors to press the sell button this morning. much of this sell-off started in china. after two days of big gains for the shanghai composite because of the stimulus measures, we saw china pull back today big-time. we also saw two dow components who very much tell the china trade story, whether that's caterpillar or 3m, report earnings that really disappointed investors. that gets us to another narrative in this market. caterpillar for one actually had a double beat where they just scraped past those estimates and they cited tariffs making them have to spend more money and investors didn't like it. they are selling the stock by 7.6% today. so it's china and it's interest rates as i throw it back to you, because the banks are supposed to do well in a higher rate environment but customers are taking those deposits out.

the banks are down big-time. stuart: got it. lauren, thank you very much indeed. president obama taking credit for the strong economy. roll tape. >> so by the time i left office, wages were rising, unemployment rate was falling, poverty was falling. and that's what i handed off to the next guy. so when you hear all this talk about economic miracles right now, remember who started it. stuart: okay. former reagan economist art lapper is with us. a fine person to have on this tuesday morning. does president obama deserve any credit for the current economic miracle? >> he seems to be a very likeable man and he has a way with the words, but a lawyer is a lawyer is a lawyer, whether he was president or not. it was the worst single recovery in u.s. -- well, post world war

ii u.s. history and it was a terrible thing. of course, right after he leaves office, they start rising. duh. because there was a change in policies. trump has just done a great job and obama did not do a good job but boy, is he polished and smooth. i would love to have dinner with him sometime if he didn't know who i was. where i could be friends with him. he looks like a great guy to be with. but not to have as president. stuart: i'm going to ask about president trump looking for a 10% middle class family tax cut. before i get there, can you explain this market sell-off? we are down 300 points. what's the reason? any idea? >> not really. i can't. the only thing i think of is it's very different from your commentators on that. sell-offs that come before elections, just before elections, usually are forecasts of what will be and it worries me a little bit that this sell-off is taking place before the november elections, that the market might know something that i don't. but i don't think so. i think we will do just fine in

this election, from my analysis. but i think it's the election, not any of these other things you are talking about. stuart: really. the election. that surprises me. >> why? stuart: because president trump has been doing very well in the polls recently. and the gap between the republicans and the democrats in these generic polls has closed to virtually nothing. it's the come from behind trend we are seeing now. >> let me take you back to 2008. in 2008, if you look at the stock market and plot that stock market throughout 2008, it's the exact inverse of obama's probability of winning the election. the market was literally forecasting obama coming in and becoming the next president and doing all sorts of horrible policies, which is exactly what he did. and that market anticipated that quite accurately, and you could see that there. so i always worry, because markets look to what will be, not what has been. trump has done a great job in his first two years in office. he's not even through two years, and he's done the best job i think of any president for sure

in the post-war period and just phenomenal on the economy, but you know, this market is looking to the future, not the past. stuart: wow. the best performance in the first two years of any president since world war ii. pretty strong stuff there, art. >> by that, i mean the first full term of any president in the post-war period. he has done way better than reagan and reagan was the second best, or kennedy was the second best. you know, he has done an amazing job and continues to keep doing it, doing it, doing it, and he doesn't let off. he wants a tax cut before the -- how cool is that? stuart: i want to refer to that. last night, he specifically said he wants a 10% tax cut. >> god bless him. stuart: for middle income families. obviously he's not going to get that before the election which is only two weeks away. congress is not in session. but could that give the market and the economy another leg up, if that's what we got next year?

>> oh, sure, i think it could. i think if he passes that, that would be probably in the lame duck session, if he loses the house. but i don't really -- i don't think there's any guarantee that he's going to lose the house. i think it's about 50/50 in the house. i think in the senate, republicans pick up two to four seats in the senate, which is where we really need it. you will have a lot better senate following this election, i think, than you had prior to it and it was pretty darned good prior to it as well. the kavanaugh vote and all these other votes, the tax bill, all those were done prior to the change in the senate and this senate will be better. i am really looking forward to trump continuing these economic growth policies. thank goodness for people like steve mnuchin and larry kudlow and kevin hasesett. larry is doing a spectacular job on advising the president. stuart: i have 30 seconds left. would you buy a ticket for the $1.6 billion megamillions lottery? >> you know, i would buy one ticket and i would give it to you.

because you said you would never buy one. it's the biggest waste of money. there's nothing nicer than a friend giving you something that you would never get for yourself. ashley: no state income tax in tennessee. >> i know. isn't it wonderful? ashley, we still miss you terribly here. stuart: art, i'm speechless but i will take the lottery ticket if you come up here and buy one. >> it's a deal. i'll do it. stuart: see you again real soon. that's a promise. >> thanks very much, everybody. stuart: 18 minutes in -- sorry, what are we? 28 minutes in. what are we? 9:48. 18 minutes in. i will get the math right. i really will. we opened with a loss of over 400. we pared that loss to a minus 318. that's where we are now. president trump being criticized, he says there are gang members and possible isis members in that migrant caravan. could he be right? we will get into it next.

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stuart: let me show you the dow 30 on a big sell-off day. 26 of them in the red, four in the green. i think that tells the story. i want to get on the migrant caravan. i want to bring in hamid dillon with the republican national lawyers association. welcome back to the program.

always good to have you with us. now, president trump is being criticized for saying that some people on the caravan are middle easterners. what do you make of this? what do you know about this? >> well, he's absolutely correct. this has actually been verified by a mexican journalist who is imbedded in the caravan. he said that in fact he has spoken to many people there who are from the middle east. secondly, the government of guatemala recently reported t t that -- they actually reported over 100 yemen and other middle eastern people who were affiliated with isis or otherwise terroristic so yes, that's actually been confirmed by two different -- stuart: well, the left sees the caravan in what they think of as humanitarian terms. >> right. stuart: they're there, they're poor, let them in, take care of them. the right looks at it as almost an invasion of largely young men. >> right. that's right. stuart: how do you see it? >> it is an invasion, clearly so.

and i think that what's happening here is that the lawyers here in america, the liberal lawyers, are advising about a hoopholoophole, if they asylum they can get into the country. i have gotten asylum for people around the world and these people are really abusing asylum. stuart: it's an attempt to flood the country. you set one foot in, you claim asylum and you're in. >> you're in. and to give one example, in 2014, almost 300,000 babies were born to illegal aliens in this country at a huge cost economically of $2.4 billion in one year. if you spread that money out instead of paying for them to have children here to building a wall, we could have a wall built with just those savings in ten years. stuart: okay. i want to move on to another subject because i know you are in the san francisco area. >> that's right. stuart: home of big tech. >> yes. stuart: turns out that big tech san francisco, silicon valley, they have been skewing their political contributions. almost all of it goes to democrats. >> yes.

stuart: what do you think of that? >> that's right. i represent james demoor. in the course of our case against google, it's something like over 95% at google and other tech companies. that's clearly demonstrating a bias from top to bottom in terms of who they hire, their products, censoring, shadow banning and search engine results. it's affecting our entire culture. stuart: we are talking about facebook and google in particular. >> and twitter. stuart: and twitter as well. >> yes. stuart: why do you say it's affecting our -- infecting, infecting our entire culture? >> increasingly, americans and people around the world are actually getting their news roults from so results from some of these sources and if you can't find certain voices on the right, then in fact people are getting a very skewed perspective on the information that's out there. from friends of mine anecdotally in politics, you find the ones that are put in facebook jail or who are banned, almost always on the right. very few on the left. so that's obviously going to impact the outcome of what

people perceive. stuart: what's the reaction to you in san francisco? you are fairly conservative. not too keen on the caravan. >> no. no. i wear a baseball cap and try to go incognito. we don't put bumper stickers, trump stickers on our cars. stuart: i hope you don't have any problems as a result of appearing on this program with me. >> i hope not. we'll see. stuart: time will tell. thank you very much for being with us. >> my pleasure. thank you. stuart: you got to take a look at the big board again because we still have a sell-off. down 1.3%, about 340 points. to the downside. i promise you, more after this.

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stuart: all right, we're almost a half hour into the trading session. quite clearly we have a selloff on our hands. the dow at this moment is down 1 1/2%. that is 365 points to the

downside those five stocks on the screen, caterpillar, 3m, apple, boeing, are dow stocks. taken together they account for 250 points of this overall dow loss. those five in particular dragging the dow lower. now listen to what national economic council director larry kudlow had to say moments ago about this market selloff. roll tape. >> larry, if we get another selloff this morning a healthy correction, at what point does it become unhealthy? >> when i checked this morning we were down 5% from the peak. not much. not much. stuart: not much, that is it larry kudlow commenting on the current selloff. as he said down 5% from the peak. the peak for the dow would have been all-time record close, 26,800. we're now at 24,900. down about 2,000 points. larry kudlow says, not much.

susan: on technical levels we bounced off lows of the session. we bounced off october lows and back. that is encouraging we have a sell down people are still going into buy. ashley: absolutely right. perspective. look at intensity of the selling today. it is pretty orderly. the fear index, we talk about that only gives you a clue where the market is, not off the charts by any means. there is concern about earnings. there is concern that revenue is sewing down, that 2019 will be a lot tougher year than 2018. there is worries and all sorts of headwinds but to larry kudlow's point, that a huge deal? not much. susan: 2018 is big deal. if you make so much money one year the comparables are hard next year. that is positive story. that you make so much money and you have to make more to make it better. stuart: it is okay. the nasdaq is on pace for the worst month, any month, october

or otherwise, the worst month since the financial crisis, november 2018. ashley: 10 years. stuart: nasdaq, tech stocks, they're really taking it on the chin in this particular month of october. ashley: right. stuart: our next guest has been a critic of some of these big tech companies vivek wadhwa is with us. harvard distinguished fellow. normally out of california but today gracing us with his presence. >> and dressed up for the occasion. stuart: we're flattered, we really are. you say facebook, google, twitter, they should be criticized, they should be pressured. why? >> stuart, imagine if you had a car that kept crashing or had a washing machine at home chewed up your clothes, any product defective you would hold the manufacturers liable. their technologies are causing lots of problems. they're creating filter bubbles. makes us hate each other literally. stuart: what is filter bubble? >> filter bubble, conservatives

only get extreme conservative views, liberals get extreme liberal views, they're ripping us apart. the book i brought for you to read, watch the tricks. they're using psychology against us, like rats in a cage. you give them pellets, they eat it. you stop giving them pellets they become desperate and they keep, whenever you get them ising they get hungry. psychology experiments from the 1940s, they're replicating us to make us addicted. check the smartphones. reward we get for checking smartphones. work, slack on the machine, you're checking it. at home, your kids are swiping let, swiping right. love is transaction. the entire system is rigged against us. the tech industry is dominating our happiness. stuart: what are you going to do about it? >> you learn about it, hold them accountable. >> when you say hold them accountable, how do you hold them accountable? you fine them or something,

say -- >> take what's app. what's app isn't used here but asia brazil, most used allocation. whatsapp, there are dozens of deaths reported on misinformation reported on whatsapp. you can't trace back the source to the originator. the car is dangerous. it is like a car without seatbelts. stuart: it is defective, whatsapp is defective product because you can't placed accountability on it. >> facebook is defective product the way they give you news. it was started as social media thing. when they started adding to the news feed, they decided to add what news you read. that is the filter bubbles. stuart: facebook is a defective product, how do you stop it? what do you do? >> what do you do if a car is defective? stuart: you can't ban it. >> what do you do with a car defective, hold the manufacturer liable, allow consumers to sue them. why not the tech industry?

why should the tech industry get away with defective products the way it does? stuart: you think there should be a legal process to apply and enforce accountability and liability on defective product which is facebook? no yes. when they serve us fake news, they should be liable for that. stuart: you still hang out in california with views like that? >> i live in menlo park. right with these people. they don't as you like me. this book explains it. this book tells you how it should be. how you are supposed to be great. stuart: we accept you as a refugee from the golden state of california. >> i love golden california, by the way. stuart: i used to love it too. thank you, vivek. check the market, lows of the day, down 442 points. best part of 1.7%. other indicators off a similar amount. nasdaq down more than 2%. tom rogan with us,

"washington examiner" commentary writer. all right, tom, this is one big selloff. do you think it will have any impact at all on the midterm elections? >> i mean might have a marginal impact but i think the fundamental data i drivers that affect political choices are much more related to income reporting, to unemployment rates on those metrics, president trump, the republican congress by association is in a better position. i don't think it will actually be functionally problematic as some might say. stuart: now it seems to me that president trump has jumped on the caravan as an issue which is very much to his advantage. i think that is micking a difference in the polls. are you with me on this. >> i think so. part of the opportunity for president trump is the democratic response to it.

instead of taking more moderated view, we need to spend on aid, we need to do x, y, e zoo, but we also need to protect the borders, the democratic narrative, partly because of democratic aspiration for the 2020 presidential race, president trump is evil, we should almost, without saying it, they're saying we should let these people in. most americans -- stuart: that is exactly right. they're not saying it. when confronted directly, what will you do when they arrive at our border? you don't get an answer. >> right. stuart: that is dodging the issue and i think that is, that is not a political strategy to dodge this current crisis. don't dodge it. answer it. >> no. i think what is interesting, in some ways this is again, this is, it is democrats catching themselves in their own sort of whirlwind, they are looking. you have all the candidates aspiring towards 2020, many of whom are in congress now and setting the narrative of the

party. they have their particular eye on partisan base is quite openly now in favor of a much more liberalized immigration system. and so there is more moderate voices kind of get drowned out or lack the, you know, the, i don't think they're getting airtime, in terms of more pro-democratic media outlets as well. but you can understand why president trump is playing that card. stuart: hold on for a second, tom. i'm just going to deal with some news items about toxic politics. i will get back to you in just one second. an explosive device, i believe mailed to the home of george soros. ashley: hedge fund billionaire here in westchester county, ap says law enforcement told them indeed that device was mailed to george soros' home was a bomb with explosive powder. it was discovered by an employee at the house. soros was not home. they opened the package, saw that it looked suspicious, took it out to the woods, left it there, called police.

it was since deactivated. law enforcement confirming now it was a bomb. stuart: other side of the fence is rock or boulder -- ashley: kevin mccarthy had a huge boulder thrown threw his office window in bakersfield, california. stuart: get back to tom rogan here, can you point your finger, who is to blame for the toxic politics? >> a nature, talking about immigration or the role of government in society, i think the temperment of various political leaders all creates this sort of crucible of anger that most people render in terms of protests but some idiots render in terms of violent action. look back to the nation's history, '70s, especially in terms of left-wing, seeming i revolutionary movements, level of violent domestic extreme system higher. it is bad but don't think it is

catastrophically bad. stuart: you have an accent, tom? >> my father was in the state department, my mother is british. i have the best of both worlds, u.s. citizenship and britishing a sent. stuart: you realize we have three british accepts around us and a fine young american accent. >> i like to believe i have american teeth. not quite american. stuart: heaven forbid you should have british teeth as well. mr. rogan a fine first performance on "varney & company." if you're not careful you will be back. >> thank you. stuart: s&p, losers there, corning down 6%. cummins, freeport-mcmoran, okay, mosaic, across the board all different industries, all of them sharply lower. susan: nasdaq reentering correction territory. stuart: what does that mean? susan: it was already down 10%. they bounced off that.

we're back down 10% from recent highs at the end of august. ashley: interesting the psyche of this market. tries to stop the bleeding a a little bit. we were down 400. came back to nearly 300. another wave, another wave of push the sell button, here we are taking another step lower. stuart: did you see microsoft? down four dollars a share. ashley: i saw the tears come down your face. stuart: means i will stick around here for a lot longer. we're down 433 points. okay. down, that is 1.7%. all right, we got a big hour coming up for you. yes, the migrant caravan in the news again, still heading north towards the southern border. president trump is threatening to cut aid for honduras, guatemala, el salvador as a result. i want to know how much it will hurt the countries and what will it do to the caravans? president trump, president obama hold rallies ahead of midterms. very, very difficult rallies i

would say. my take later this hour. brian a kilmeade will respond to it all too. one congressman working to classify marijuana as a schedule two drug. that would allow you to invest in it, banks to finance it. we get research done too. that congressman is dana rohrabacher. he is on the show later. state of the art technology, makes it brilliant. the visionary lexus nx. lease the 2019 nx 300 for $339 a month for 36 months. experience amazing, at your lexus dealer.

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stuart: we've taken another leg to the downside, we're almost off 500 points. another development, ashley? ashley: first time ever european commission rejected a a state's budget proposal, in this case italy. no, you're spending too much money, way over what the eu allows. it is 130% of the gdp. they're more than double, only country worse off than italy is greece. they have three weeks to go away to have another proposal.

italian coalition government not exactly friendly to brussels. we need money to jump-start the economy that has been stagnant so long. we have standoff. big problem, italian debt, those that have money in italian banks, it will send a shiver. susan: people wonder why i should care about a country in the europe. italy is the third largest bond issuer in the world, third largest. not that big on gdp scale, but they have to issue a lot of debt because obviously they need money to pay off their debt. stuart: everybody is worried about the italian banks which hold tremendous amount of italy's debt and they broke the rules of european union. ashley: first time ever, the european union says no, to the budget proposal. you need to go away and come back with something better. the words and statements from the current coalition government, northern league and five star government, they will not play ball.

stuart: i have to believe the latest news out of europe for the tex interest leg down on the market. we're down more than 500 points, better than 2%. shah ghailani is on the phone. are you prepared to say cash in some of your chips, sell some of your stocks you made money on, walk away with some money. >> yes. we actually got yesterday morning at the open, stuart. if you're a long-term investor this is nothing but a blip. if you're a short-term trader as i am often, this market is pretty scary right now. in dow terms we have possibly another 1000-point move to the downside ahead of us over next days or weeks. yeah, i'm certainly nervous in here the way the market reacts. we went up too fast on heels of two weeks ago getting hit. there is no buy orders. there is nothing delow the market. a little scary right here.

stuart: thank thank you, shah, u been in the past bullish on market, keeping going up. now we have a pullback, and you're suggesting that we sell some of the stocks where we made some money. on your screen, the dow's biggest losers or some of the dow losers i should say, contributing to what is now a 530 point loss, that is 2% loss for the dow industrials. now again, we got this italian bank problem. you may be wondering, you're sitting at home, wonderings what on earth have italian banks got to do with me and my 401(k)? the reason is this. the italy's budget presented to european union, that budget, you're spending too much money. you can't have that you're breaking rules. the european union rejected that budget. ashley: they have. stuart: which puts pressure on italian banks that hold italy debts. >> if you think greek debt crisis could threaten eu and the

experiment, italy is whole new ball game. susan: three times. ashley: at least. susan: yields are spiking on italian debt to four 1/2, five-year highs. nobody wants to buy italian debt. stuart: i think italy is the third most indebted country in the world. i think. ashley: quite likely. susan: 30% of the gdp. stuart: america, japan, italy, that is how it goes. i think i got order. ashley: their economy has gone nowhere for so long, they need money to jump-start it and eu says no. stuart: amazon. susan: down 6%. ample down 2.6. look at facebook. we even broke through 150, down 2 1/2%. there you go, 151. ashley: what point do people get e ited to jump back in? not yet. not in this environment. brave person at these levels. someone like our mike murphy to,

okay, time to jump in. we'll see. stuart: there is are no buy orders shah said, it is just sell, sell. facebook testing 150. amazon down $66 at 1722. apple down 2.25%, $5 lower. google down 30 bucks, that is nearly 2 1/2%. there is microsoft, there goes my retirement. ashley: at what point do investors believe it is more fairly priced? the company hasn't changed. amazon hasn't changed overnight to be a dysfunctional company. they're still ruling the roost. just matter of what you're comfortable jumping back in. stuart: let me remind everyone, the all-time high for the dow was on october the 3rd. 26,828. thats was three weeks ago. that was the all-time high. susan: 50 points away from breaking 27,000 on that day.

stuart: we're down 2,000 since october the 3rd. one-month chart of the dow. left-hand side of the screen. i will move away for a second. what do you say? we're going to take a commercial break, be back after this. susan: pay some bills. your company is constantly evolving. and the decisions you make have far reaching implications. the right relationship with a corporate bank who understands your industry and your world can help you make well informed choices and stay ahead of opportunities. pnc brings you the resources of one of the nation's largest banks, and a local approach with a focus on customized insights. so you and your company are ready for today.

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stuart: we're down some more. now we're off 540 points. that is better than 2%. 24,700 is where we are. got to get this in from the caravan. the migrants are still headed north. here is a tweet from president trump. he says i will pull funding from honduras, guatemala, salve sam. that is what he said. we have mary o'grady, "wall street journal" columnist. i got the name slightly wrong.

if we take money away from the three governments, won't stop them allowing caravans to form in the first place, put pressure, don't do this. >> i'm sympathetic to president trump trying to find things he can do to try to stop this however, what you have to keep in mind, the government in honduras and government in guatemala are pro-american governments. those are our allies. on the ground in honduras, we reported this in honduras, on the ground in honduras, you have a pro-chavez, pro-castro organization of these groups. they're the ones, the government itself is actually discouraging people, offering assistance for them to return back, but it is the, it is the pro-chavez groups that are the ones who are egging them on. this includes by the way the former president, i don't know if you remember in 2009 when they removed this guy because he was a kook. that was backed by the supreme court, by his own party to

remove him. barack obama tried to force them to take them back. that never happened. now that same guy is part of this operation to send these people north. so if we, all of sudden go after the government in honduras, we are playing right into their hands. they're trying to bring down this government. stuart: but it's a threat to remove foreign aid. you don't think it is a big enough threat to make those governments stop those caravans? >> the governments are not, the governments are not ones fueling the caravans. they also want to stop them, but the problem is, as i said, these are enemies of democratic governments in these countries. it plays into their hands saying we'll cut off aid. i think president is right, the problem is there. it is not here. we have to think about that. but i don't think that is the right path. stuart: mary anastasia o'grady, i got it right. >> yes you did, stuart. stuart: thank you very much. very important stuff. appreciate it. all right. check the markets we're still

down 500 points. coming up we'll talk to someone who says it is europe which could be the markets undoing. we're back after this. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

stuart: coming back a little. we're down 476 as opposed to over 500 points. i will call that a comeback. it's a minor comeback. let's face it. big techs taking it on the chin today, look at that all of them down 2, 3, 4%, all of them on the way down. scott shellady, tjm europe managing director. all right, scott, we've been reporting that the european union rejected italy's budget. that puts italian banks in play or certainly in some really challenged. we're saying that is one of the reasons for our market decline.

are we accurate? >> yeah, i think you are. nobody's really focused what has been happening over here. unbeknownst to me i've been placed in the middle of it like it or not. we have issue with merkel and immigration problem she has there. her grip is slipping massively. you go to italy, you've been reporting what is happening there. you have the catalonia issue in spain. barack macron is plummeting. france is unmitigated disaster with their economy. there isn't anywhere you can turn to the big ones in europe to take solace. on top of that you have "brexit" problem and 6 or 7,000 people are marching, another throw in the face of democracy with another referendum. there isn't any place you can take solace. that is the problem. we're worried about the interest rates. look at interest rate now. they're hiding in our treasury bonds. the yield is going down.

we were worried about oil. 60, 80, $100 a barrel. maybe even $400 a barrel. you remember that. we're in the high 60s now, right? the things we thought would be the catalyst are not the catalyst. it could very well be all the people together here in europe we're trying to force together the round peg in a square hole. it will just not work out. stuart: could this be, with all this going on over there, could it be a buying opportunity for stocks over here? what do you say? >> well it could be. right now the investors, the glass is half full, right, or half empty. before it was half full. that is what it means, stuart. i get worried about a stock market goes up for no good reason, than one that pose down for a few good reasons, right? we have decent reasons to go down. we've been ignoring chinese trade tariffs. we've been ignoring a few things with iran and now even saudi arabia and what could happen to our congress of all things. it is okay to see a market tail

off, start to take stuff off the top for good reason. we're on the show, a week in, week out, we're trying to make up story why this thing is rallying, we really don't know why. that is something we should worry about. this is okay. stocks can go down. it is okay. it will give us more respect for the market. it will be like your muscles, once you break them down, fix them, they come back stronger. i'm 100% calm for this happening right now. stuart: forgive me, i want to go back to the european union rejecting italy's budget, italian bank in trouble. i'm constantly asked, i'm getting messages all the time, what on earth do italian banks have to do with my 401(k)? so, scott, can you spell out the mechanics of why italian banks matter to us over here. >> well, if you start to have, i mean, number one, the banking system is not parochial. it is global. all these banks trade with each other. there is relationships all around the world. tentacles with one bank or the

other, at least with the big guys are all connected. if you start to see stresses, italy's economy is big comparatively to the european union. that will cause a ripple effect. that is what people don't really take into account. you can see some stresses. here is what i need to really let everybody at home know. italy is a big risk. spain is a big risk but wouldn't you think the u.s. is much less of a risk than those countries? because of the european union central bank they have yields lower, not anymore, they spiked up lately, their yields were lower than our 10-year yield. how can you think their economy is safer or their bonds will be safer than ours, give you a lower yield? that drives me crazy. that tells me it is dangerous. that is ripple effect. when you see the ripple effect, banks under stress and yields spiking, that is when the dominoes start to fall. stuart: time to come back to america, lad. it really is. >> i will be back. i will be back. stuart: i know you will.

thanks for being with us on very important day. that is a very good explanation. scott, you're all right. >> all right. stuart: let's add up the negatives. we have got china, that's a problem. ashley: yes. stuart: europe, that's a problem. ashley: yep. stuart: some of these earnings reports, not great. ashley: revenues slowing down. high interest rates. stuart: high interest rates. although interest rates -- ashley: yield is down because money is buying safety. stuart: interest rates from the fed everybody is worried about. ashley: correct. stuart: so china, europe, earnings reports and the fed and interest rates. ashley: when you get the ledger of pros and cons, the cons are adding up, the pros are not so much. susan: i would agree. i would agree with that. there are positives in the market. can we show verizon? 18-year high. disappointing earnings from 3m, caterpillar. this is higher input costs for caterpillar because of higher tariffs. freight costs go up because of the tariffs. hence they reduced earnings out

look going into the next year. 3m, similar concerns. think about earnings compared to 2018, which were stellar. you trade on market, forward thinking, forward expectations, when 2019 will not look great compared to 2018 which has been outstanding, that is when you start taking money off the table. stuart: our viewers are faced with, when, i think most of our viewers are investors. ashley: yep. stuart: i think some have money in the stock market. ashley: yes. stuart: i'm sure some have done pretty well. ashley: gotten used to do that, yes. stuart: last two years, we've done pretty well, the question for everybody is the same. do you take some of your money off the table? and take the profits? ashley: shah ghailani said if you're long-term investor it's a blip. if you're short term, worry about the next day, you start to worry. most people are not in that camp. susan: psychology plays into the market, a big component, psyche

than psychology. longest bull market in history. 10 years into the expansion in 2008, you don't want to be the one stuck with the hot potato. that fills the mind set of investors. stuart: like 1999, nasdaq composite, when do you take your money. ashley: pop. stuart: mike murphy is on the phone. live and in living color on the set. he is back on the phone, the selloff is extended, we're down 2%, better than 500 points. look we just had larry kudlow on the fox news channel, commenting on the sell-off, mike. it is just a bit, a bit lower, implying that long term investors should stay put and ride it out. what do you say? >> stuart, they called me back because they needed a little optimism on the show. absolutely, this is a blip. and one thing, and i said this to you before, stuart in person, if you're going to get out of the market today, you're

implying that you know what the market is going lower, number one, and number two, someone will call you today, say now is the time to get back in, stuart, put your money back in. you're picking a top or near a top, a bottom to get back in. if you're a long-term investor, 100% this is just a blip. we may go lower by three or 5%. there is no rule. but you want to be buying on any pullback. stuart: but again, a lot of people in our audience are maybe retired, and they're investing retirement money and therefore their risk tolerance is very, very low. you can understand them, mike, if they're saying wait a minute, i've done all right. i have quite a bit of money piled up here, let me take it off the take, because it is in my 401(k). i won't pay a profits tax. i won't pay a capital-gains tax, why not do it? isn't that a strong argument for those people, for that group of people? >> yes. if they have too much risk on

the table now, stuart, waking up and turning on "varney & company" seeing down 500, causing them stress or sleepless nights, they need to reallocate the portfolio. take gains in the retirement account. you don't pay tax on it, allocate it elsewhere to bond or bond fine, that's fine. for someone looking out longer term, hey, this down 500 scares me i will sell because we've been in a bull market for some time now, that just to me, i've been doing this 23 years, it never worked. i think you stay long, you buy quality, and you buy on any pullback. stuart: okay. we've got a problem with china. we've got a problem with europe, we have a problem with some earnings reports and maybe a problem with the federal reserve and interest rates. when we get through all of those problems you think we bounce back and establish a new high on the dow at some point? do you? >> absolutely. so let's -- we don't need to address each one. i know we don't have a ton of

time, talk about the federal reserve raising interest rates, they're raising interest rates for the right reason because we have an economy growing gangbusters, stuart. this is the growth we've been looking for, that we've been talking about. so the fed is doing their job doing their best to keep the economy in line. talking about china, in february we sold off on china trade wars. well, what if this turns out, stuart, that all of the manufacturing from the united states that was taking place over in china ends upcoming back to the u.s. and coming here? how does that look for our economy? stuart: i gotcha. i understand. hold on a second, mike. scott shellady is still with us. i believe you've been listening what we've been saying here. i posed the question to our viewers, why not take some risk off the table, why not take some money off the table, especially if you're retirement account, because you sell at profit, don't take profit cash, you're all cash, what is wrong with that? >> there is nothing wrong with

that unfortunately the only thing that is wrong with that, investing 101, more susceptible you get to the downturns, should be doing that. 60 years old, 60% in bonds, 40% in stocks. as you got older, you got more and more conservative, that should keep you in good stead. generally it does. this would be the time you're happy about the bonn portfolio. however, mike just said, the reason we're having issues, reason we're talking about interest rates because the u.s. economy is the bright white shining city on the hill right now. we're doing that well. that is something you have to keep in mind. ultimately that will keep us in good stead. we do have things going in the right direction, the rest of the world wants to be us. everything will be okay at home of the we to suffer some things in the short term, because we'll have people that have worries. stuart: are you sure about that, scott? everything will be okay at home?

remember all the foreign economies, whether china, japan or europe, they're either slowing down or heading towards recession, that will not do us much good, is it? >> it can slow us down a tad but we're still growing better than we were with the last administration. i was back there for a month in september, stuart. i never seen so many help-wanted signs in my entire life. you keep harping how many jobs are out there, how many people looking for jobs, that will not change drastically in the short term. donald trump is not a man of action. he is not a man much attrition. he will not let this china thing go on too long, american people don't have patience for it. it will be taken care of soon in my mind. i got off the phone with couple farmers. that is what they think right now. stuart: everybody on pause for one second. i want to recap what is going on in the markets, can we please put up on the screen the five dow stocks which are sharply, sharply lower which account for

a big chunk of the loss of 400 points on the dow? caterpillar is dow stock, down 12 bucks. that is almost 10%. that is a whopping great big decline. 3m is a dow stock. down $14, 7%, huge decline. boeing is a dow stock, down 2 1/2%. apple a dow stock, down four bucks, back to 215. that is a 2% loss. goldman sachs, financial company in the dow, down 6 bucks, down 2.7%. add that lot up together, they're all five dow stocks and those stocks account for 260 for dow's 470 point loss. ashley: yeah. stuart: the loss is heavily concentrated in those five dow stocks and actually in the other high-tech stocks, big tech stocks. can you show me those please because you have got some very significant drops there. susan: i would say microsoft is accounting for a lot of decline.

microsoft, 3m. yeah. stuart: put a bunch up there. can you show me the big techs please? thank you. look at that, they're all down significantly. facebook just above 160. amazon is down $63. ashley: yeah. stuart: awfully close to dropping below 1700. its high was well above $2,000. apple is down four bucks as we said. the high for apple is around 230. ashley: banks are getting hammered again. bank of america is down. stuart: big tech stocks, google is down $23 a share. microsoft is down 3.88 cents. ashley: broad-based as they like to say. stuart: broad-based it is. susan: very few advancers. only four stocks are up, mcdonald's, verizon, hit 18 year-and-a-half high. united technologies and general electric is trading higher, proctor & gamble. these stable stocks provide a lot of yields trying to look for

money and safety in this environment. stuart: brian wesbury is on the phone. brian is on economist. not specifically a stock market watcher. brian has always been very positive about the economy. always say we're heading towards a very strong growth rate and i believe you made the comment, brian, we're headed towards new highs for the dow industrials. so how do you feel about the market right now, brian wesbury? time to pull in your horns and take some money off the table? >> i don't think so, stuart. you know corrections, they're not designed isn't the perfect word but they're designed to shake stocks, shakin' investments out of weak hands, move them into strong hands. in other words to those people who believe the economy will continue to grow and i'm one of those. i believe the odds of recession in 2019 are virtually nil.

the federal reserve is a long way from being tight. tax cuts and deregulation are in place. would i argue, one thing i keep hearing, oh, what if the democrats win both houses, well they're not going to win veto-proof majorities. so let's say they do vote to raise taxes, well, it will be vetoed. and so. on the horizon, recession, anytime soon, i don't buy it. they're still growing. these stocks are still cheap. stuart: the bottom line for future of stocks prices is corporate profits. you buy a stock, look into the future, well that company will make a ton of money into the future, so i'm buying into those profits into the future. could it be all the profit reports we're seeing right now represent peak profits? we're not going higher from here? that's a negative. >> it would be if that were true.

and, the way you get peak profits, number one, have a recession and like i just said i don't, i don't see one on the horizon but there are a lot of people people talk about, where they will have 20 plus% growth in profit this is year and next year it will slow down. of course it will, because tax cuts boosted profit this is year. if you take away tax cuts we probably grew 10 to 12% in earnings or profit. next year you will grow 10%. fundamental profit growth is unlikely to change between this year and next year. it just makes it look like this year is bigger because of the tax cuts. i strip away those one-time things and look at underlying growth and, it is still looking positive. stuart: hold on a second, brian. i want to comment for our viewers. some of us in our advanced

years -- that would be me, we have seen this kind of thing before. we've seen sharp selloffs last a day or two, a thousand points, we've seen that but in recent years we always had a bounceback of sorts. >> right. stuart: we never gone down and stayed way, way down for any appreciable period. susan: had that year in february with 1000 point drop. what happened? we hit multiyear highs once again a few months later. there is resistance there. stuart: there is and i should say as of right now we're down 2,000 points on the dow industrials in the last three weeks. on october the 3 record, almost 2,000. on october the 3ed are -- october the third. three weeks later we're down 2,000 points from the closing

high. susan: can i note caterpillar is having their worst day since 2009? worst day. stuart: that doesn't help the market because it's a dow stock, that's right. susan: dow component, there you go. it is a drag. stuart: just a word we have seen this kind of thing before. ashley: yep. stuart: there is no reason to panic. there is never a reason to panic in the stock market quite frankly. those of us who are old should pass along advice to those who are young. are you with me? susan: depends on your time horizon. if you're in the market you should be a long-term investors. you can't time levels. we've seen this before. there is still a lot of money at play. there are a lot of positives as well including earnings. we're expecting eps, earnings growth, make this very easy to understand before i get buzzed, but earnings are expected to be stellar as they have been for 2:08. 22% profit growth for this quarter. ashley: you can argue this is back to normal, so long of cheap money, decade for the fed,

everyone getting used to that, volatility basically gone, this is how markets in normal situation behaves. it is not comfortable. don't get me wrong. stuart: it is back to normal. since the election of donald trump when the dow was 18,000. we're used to a chart. ashley: there are traders out there doing it for, what, 10 years now, never experienced something like that. susan: even though we hit record highs this year, when you look on the price, i have to say this price earnings multiples. how do you gauge how expensive stocks are, and it is not expensive if you to a long-term average. pe -- [buzzer] come on, i'm trying to explain this, as we price things in the markets. you're 16 times earnings. that is pretty much in line with the s&p price average over multiple, multiple decades. stuart: that was awful of them to buzz you. that is rude. susan: i agree. ashley: you were asking for it.

there was one thing -- susan: gauge how expensive stocks are, then valuations? how do you put into perspective? stuart: i don't see any panic. ashley: not at all. we're down 1 1/2% on the dow. stuart: 20 minutes ago, we were down over 2%, over 500 points. ashley: yeah. stuart: now we're down 400. ashley: we got the italian news, we went from down, what, almost 5 a 30 points. absorbed that. we're trying to make another comeback. 548. now we're trying to make another comeback of sorts. stuart: come back 150 points in the space of 20 minutes. ashley: there you go. stuart: you used the word orderly selloff. ashley: it is not panic. high-intensity. susan: not a "flash crash." ashley: exactly right. stuart: we do have a split opinion on the part of our frequent market guests. ashley: yes. stuart: shah ghailani is saying, almost near constant bull. ashley: yes, he has.

stuart: time to be a little cautious, maybe take some off the table. he is getting worried. ashley: yep. stuart: eddie gabor, with us 9:00. ashley: a little more cautious. stuart: a little more cautious. he is a guy who has been bullish a long, long time. on the other hand mike murphy with us this morning and on the phone moments ago, no, we're going back up. ashley: he believes in the fundamentals. he says the fundamentals have not changed. believe in the economy. believe in these companies. susan: he believes in growth and technology which is very hard to page in this environment. stuart: look who is on the phone right now, our very own keith fitz, joining us from the west coast. another guy who frequently been bullish, recently, i think i'm right in saying recently you turned much more cautious. you're prepared to say watch out and sell some of this stuff that looks shaky. is that where you are today, keith? >> that is absolutely, correct, stuart. i think we're on pace for fifth straight week of declines for

s&p 500. we are trading below the lows hit earlier this month. that tells me to your point, traders are orderly exit but still some downside to go. stuart: look at me for example, i asked this question of everybody else. i made, i got some money in microsoft. i've made very good money in microsoft. should i sell some of it or all of it? >> well, here es a the thing, stuart. number one, i can't advise you personally, obviously that would be bad for me that i don't fancy a trip to the graybar hotel. any investor has to ask two questions, number one, is this a stock i want long term and do i have the financial wherewithal through a downturn like this? in most cases the case is yes, people get nervous, sell too quickly and miss opportunity comes out on the other side. i have no idea when this will stop, that is function of traders and leverage on big institutions. individual investors believe it

or not have tailor-made opportunity at tiles like this to add to the positions because they have a different personal perspective where the market goes. no doubt in my mind microsoft will be higher five years than it is today. stuart: okay, put yourself in the shoes of some of our viewers. they made some money. >> yep. stuart: you have to have a very strong stomach to jump in and buy more now. am i going to buy more microsoft now because it is down $3.43 a share? have i got the stomach for that? i will not answer my own question, but you put yourself into the shoes of people like me and like our viewers. it would take a very strong, determined person to jump back in this morning now and buy more, wouldn't it? >> oh, yes it does. you know we have, i do this all a the time, i talk to my folks all the time. we have several million folks

where emotions are single biggest anti-determinant of performance. meaning it is what holds them back. we think what the stock market works, calmly, rationally, buy low, sell high. that is the game. stocks are overvalued, we talk about all the time, suddenly go on sale, you want to go to the store, not run away from it, what happens inevitably, history is very clear on this, markets start to run. all of sudden you got two problems. you locked in losses, you can't get back in because you lost the gumption to do so. this is about discipline and all about psychology. i think today might be a little early to step in. again if you have the right perspective, stuart, there is absolutely nothing wrong with buying a little. you don't have to buy everything at once. that is a mistake other investors make. they think i have to be all or none. that is not the case. you can step in with a couple shares. stuart: look at perspective of people we had on our program. a lot are saying, if you look at the fundamentals of the.

if you look at interest rates, above all profits we'll get a bounce-back, what do you say? >> i agree with that. the market is not a rational place right now. what you're seeing, we have fear surfacing in corporate earnings calls, about tariffs. about tighter global trade condition, slow down the global economy. that is ceo talk and buzzword lingo for the most part. so the individual investors need to concentrate what is important for them and their unique financial perspective and companies like that based on the fundamentals i submit are going to get stronger over time, not weaker. stuart: keith, thanks for jumping in on the phone of the we needed you appreciate you being here. scott shellady, same story. you've been sitting in london for eternity. thanks very much, gentleman. one and all. more "varney" after this

hear you ..

stuart: 11:00 in new york and were following to big stories this hour. first of all, we've got a market selloff. just look at that. the dow was off its lows of the day and one point down 548. it has come back a little 423. the nasdaq on pace for its worst month in nearly 10 years. yes of course the other big story is that my grand caravan. mexico still has not been able to stop it. i have an editorial in the migrants coming up later this hour. we'll start with money that means we start with markets. charles payne, host of making money and economist peter marie see also with us. charles to you first. way down a set of buying opportunity? >> are making my list, checking it twice. the price is right.

tree into what would you buy? >> right now retailers are on my list. when they were looking that closely. looking at the call for communications services named amazon and some other names. i've got a list right now. sure into but you are prepared to jump in and use this as a buying opportunity. it's without a doubt. let me tell you something. caterpillar is getting crushed today. i went through the income statement, the balance sheet. by the way, the way it is being reported is incorrect. the company reiterated its actually improved guidance. the range of guidance, the best third quarter the company's history. i am looking at north america at

24%. europe's 6%, asia appeared again i didn't listen to the call, but this is sort of anxiety out there in the tested tone this morning, all industrial spare a heavy price. >> costs are rising for caterpillar in order to build. it doesn't justify this particularly when you can make enough on this top line and pass it on. stuart: peter marie sierra wants an explanation here. the market did take another leg down right at the time the european union rejected the budget plan. can you explain what on earth italy has to do with our 401(k)s? >> it doesn't really have a whole lot but that doesn't keep the market from having the wrong idea. essentially the european union budget restraint program is not working. preventing a problem for ending monetary easing over there, that sort of thing.

more broadly the marketing is suffering from a mismanagement of expectations by the administration to some degree the federal reserve. talks about how the terrorists are hurting the chinese. the message is not getting across. the prospects for growth are very good but they're not spectacular going forward. 3% growth means will continue to grow. our price to earnings ratios are quite favorable. stuart: what about china? their economy is really slowing down. >> really? come on, stu. going from 62926552 maybe 692. look at the rest of southeast asia of southeast asia. it's doing very well for the prospects are good throughout asia appeared to some extent the growth china doesn't have starts to wear should have been in the first place. the rest of asia and not for caterpillar sells stuff. that's where charles payne makes

a lot of sense. traditional stocks, not the high tax. companies like god all of a sudden have pricing power again. verizonstore pricing power in things like tv packages and so forth. there is reason to believe the traditional site is of the stock market which are well below performance as compared to the high-tech on long-run averages do have some good solid growth prospects. stuart: i hear you. we're going to segue to something slightly different. president obama in a speech in nevada yesterday says he's taking some credit for the booming economy. the rally started the booming economy, the turnaround started while he was in office. charles payne, does he deserve any credit for the booming economy now? >> no, none. i said this before and people should do this. we should start measuring the economy and specifically the

stock market the day after the election because markets react to the next president coming in. investors start reacting then. but having said that, listen, the federal reserve probably deserves much more credit for stabilizing economy. they kept saying they've got a certain monetary policy designed to grow the economy. fiscal policy always designed to slow the economy down. dream to write after the election november 2016 the dow is still up 35% despite today's star. the s&p up 26% despite today's drop in the nasdaq, only technology companies have 40% despite a whopping great loss today and indeed this month. so we are all still way up there after the election of president trump. peter, come back in again. this president obama deserve any credit for this stellar economy? >> not really.

he handed donald trump a decent economy growing at 120% which in in today's terms is adequate but no more. you can't deny the fact his administration leaned against corporate tax relief for eight years. we got corporate tax relief and now the economy is booming. i don't know how he takes credit for that. you have to remember barack obama has a one page book in economics. all the good stuff is caused by welfare programs implemented by democrats and the bad stuff is caused by republicans and may cause nothing but bad stuff. if you're reading from the field the way you account for donald trump successes to take credit yourself. but it is campaign season. that's why it's not a good time to dive back in. charles has a very good list of stocks. the time to get back in if a couple days after the election. if democrats do really well to look at the market perhaps but

then i'll respond to the fourth-quarter earnings will start to get into focus as the economy continues to do well. a nice jobs report, all that business. stuart: i've got a new poll, very start at about the way people feel about the economy. a poll from cbs news show 70% of people polled feel good about the economy. that is the highest number going into the midterm election in 20 years. >> i think they see it reflect the in the other polls. president trump spills over the weekend and gala here in that's remarkable in one month and of course "the wall street journal" nbc poll numbers skyrocketing. an article in the "washington post" saying the dems may not take a house. that sort of an acknowledgment that something is going on and it's not just the brett kavanaugh fact even other kind of sparked it. people in their own economies

feel great. you cannot driver in any neighborhood in your country and not the help wanted signs. true to the economy as the base issue. >> 99.9% of the time. health care is up there, but ultimately we don't want to loose prosperity. train to 70% of people feel good about the economy. your reaction to that, peter. >> they should because the economy is better. jobs are plentiful. wages are rising on the low end. the stock market lets face it manhattan is a liberal enclave. on the fed right now you have two thirds of conservative thinking in manhattan, u.n. charles. i was told it was impossible for donald trump to do well in the election by my son who lives in southern manhattan and works for one of those big law firms. they've got themselves also convinced donald trump couldn't

possibly succeed. the stock market is capped at about the mentality. it's worse than washington. that's where the bubble is. what are the democrats sold, though? health care effectively even if it's not true. they sold the notion republicans want to repeal the ability to get insurance if they have a preexisting condition and may develop an awful lot of ad money to that. the notion that this is an unequal recovery. somehow or another if the doctor, not the nurse getting the tax cut. stuart: i better wrap it up, peter. you're in full flight but i've got to wrap it up. peter, you're already. thanks for joining us. we come back a bit. the dow down 380. that's an improvement. that is overwrought, canada, the pot company went public today. down 16%.

check out the other pot stocks and the other ones are way, way down. the bloom is off the road. check netflix. it wants to raise $2 billion to create new original content. i guess that's 2 billion on top of the other money it's going to spend. netflix is down 2% today. how about tesla? this is interesting. andrew left, a big name, short seller. that means he bets against the stock. that has always been mr. last position. now he says i'm buying tesla. i'm going to hold it. i like it. that news was enough to turn the clock around. fourteen dollars higher, $2.74 on tesla. the caravan is about 1100 miles due south of mcallen texas.

next, my editorial the migrants. i say this is a very big problem for the democrats. president trump promising a 10% tax cut for middle-income families. the proposal will come as early as next week. that the proposal just in time for the midterms. watching the market there is a lot to go out. we are down 360 now. that's an improvement. stay with us, please. the third hour of barney and company. you're watching it. -- "varney & company." you're watching it.

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network of doctors and hospitals. and see if a humana medicare advantage plan is the right plan for you. pick up the phone, and call the number on your screen. the call is free. and licensed humana sales agents are standing by. so call now. stuart: it might not look like it but we are coming back. at one point we were down 548 points. now we are down 379. i'll call it a comeback. either way, the market did take a step down earlier this morning when the european union reject did italy's budget plan. that is a big challenge for italian banks. joining us now is nigel for roche. all right, good italy be the

issue that breaks at the european union? >> wrecks it may be a problem with the unelected bureaucrats based in brussels. italy is the ultimate nightmare. the third-biggest economy within the year is done. putting forward a budget that is responsible but is rejected by unelected bureaucrats. italy and the european union are on a collision course. stuart: i returned to the question. could italy actually break up the european union as we know it? is it that serious? >> yeah, well, brexit is the first breakout of the wall, albeit though we are not members of the year is done. italy is a member of the euro zone as a result of which they've been struck inside a

german dominated currency that is done their country no good at all and now they're beginning to realize you cannot be a democratic nation and member of the european union. i said it before. i'll say it again. only a matter of time before breaks out and italy will do it. ashley: one ask you about the migrant caravan come at migrant caravan, the one headed towards the united states now in mexico headed towards america. i've got to tell you, it reminds me of what happened in 2015 when a million streamed across europe and angela merkel left them into germany. that did not work well for merkle. what do you say? >> emigrants have nothing to say just as the shows listed in europe had nothing to say and huge numbers. what you say near in countries like sweden, countries like

germany. its fundamental change within our cities, a growth of new politics and new italian government. i would say what the midterms come a couple of weeks away on the face of it, this migrant caravan might be good news. it could just be enough to keep the house for donald trump. stuart: okay, tens of thousands of people in london protesting about brexit. they want another vote. are they going to get another vote, with nigel? >> s. contents of thousands of people bussed into london. people can accept the result of the greatest democratic exercise in the history of the united nations. from our old friend, george soros. you know something common to people you didn't see on saturday were middle england. middle england don't protest. middle england don't march. but do not underestimate the anger of middle england if they are asked to vote on this issue

again. i hope and pray we do not get a second referendum. we've had the people so. if we do, i promise you will reject european union membership by an even bigger margin. stuart: an emphatic sub to join morning. nigel, thank you very much indeed. the dow industrials down 1.5%. big draw. what about gold. nice again. still in the $1200 for a area 11 bucks at 122036. how about bitcoin? 6300 just like yesterday. the price of oil should be down. it is at $67 a barrel. that is quite a draw. by the way, the drop in the price of gasoline is speaking out. the national average is now $2.84 a gallon, down another penny from yesterday. president trump campaign

continues today. later today i'll be in wisconsin campaigning for candidate lay a port layer. later today in charlotte, north carolina and saturday in southern illinois. this man is. this meant. this meant newspaper to forget the energy. on top of everything else, mexico is bracing for hurricane willa. the category four storm. some places could see as much as 18 inches of rain. here it comes. the mega-millions jacked pot keeps growing. now $1.6 billion. if you take the cash option can you get 904 million. i'm sure it's more than that as more people buy tickets. remember, please come if you're lucky enough to win the federal government will take 24% before the winner even receives it. i know where you get the 24%. more than that i guarantee you it is more than that. as for the markets, down 360 as we speak.

much more "varney" still ahead.

stuart: i hate to say that we stabilize because we really haven't, but we are pausing in the downturn. we were down 500, now we are down 360. about 1.5% down.

dyson, a company known for vacuum cleaners but they make all kinds of electric appliances. getting into the electric car businesses. singapore plan to build at least three different vehicles bear, electric vehicles. dyson says is the first electric car that will come out and it will be out in 2021. got it. gb unveiling of design for a supersonic jet engine could eventually be used a bit like concorde, for example. the facebook executives leaving. the cofounder and former chief of the virtual reality company ocular. now owned by facebook. instagram left the company in recent weeks. an exodus from facebook. the stock is right there at 152. tax cuts promising a 10% tax cut

for middle income families. it would be announced soon before the election and then implemented afterwards. we'll see about that. the market right now stabilizing with the loss of 360 points. that is 1.4%. that's where we are, ladies and gentlemen. now i'm thinking...i'd like to retire early. let's talk about this when we meet next week. edward jones came to manage a trillion dollars in assets under care by focusing our mind on whatever's on yours. a new way to save on travel. now when you book a flight you unlock discounts on select hotels that you can add on to your trip up until the day you leave. add on advantage. only when you book with expedia.

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stuart: well, we're not exactly stable. i should not use that word but we have been minus 350 for 10 minutes if that is stability i we'll take it. 27 of the dow 30 are in the red [inaudible]

stuart: but a youngster like you, you would not take money off the table necessarily because it's a long term. is long-term horizon. over the years as i shown, inflation is a part of it. down 550 points. and now we have come off of it and there are some positives in the markets as well. verizon had an 18.5 year high. mcdonald's is in its best in three years. stuart: do we have scott martin? we do not have scott martin. the joys of live television. you know, you're in the middle of a question to somebody you think it's over there in

chicago. >> you want me to fill in the gaps? stuart: i don't want the libertarian do that. no taxes. a little bit older than you. i trust you've got tom investments. on a day like this would you consider selling some of them. you don't have to pay tax on the profit. stuart: i don't think in terms of days. i think in terms of centuries. saturating a little bit. i don't really touch anything. stuart: you don't? do you stock investment? >> it's impractical to sell on the spur of the moment. your real estate investor? spin a tale of real estate. i love it to get better and more valuable. >> you're right.

we've got scott martin back. thank you for bailing me out. scott martin, question for you. question on behalf of our viewers. isn't this a pretty good time to take some money off the table, walk away. he made a ton in the last couple of years. take it off the table and sleep at night. would you say? >> you may sleep for a couple days, stuart, but when the market bounces back you're not going to be very happy. you're asking the right questions and being a wealth manager myself, you know, the answers are always a little different for everybody. i don't mean to sound vague or sheepish, but what do you need that money for? if you need to do in the next six months, wise to take some risk of the table. i wouldn't take this money out. in fact i'd be rebalancing some

other things balanced and things i still like say wal-mart, visa, amazon. these are all stocks that have proven cash flow, proven earnings growth. proven businesses. bubbles that i feel are getting defended here in the marketplace. to me it depends on your situation. if you need money in the next six months a year, potentially should be rebalancing the something more conservative. a couple year time horizon i wouldn't worry too much. stuart: that's a good answer. a fair answer. president trump wants to lower taxes for middle income families. let's roll that tape, please. >> we are going to be putting in a 10% tax cut for middle income families. it's going to be put in next year. [cheers and applause] 10% taxes. stuart: early this morning larry kudlow clarified the president's comments during an interview this morning on the fox news channel. roll that tape, please.

>> the last couple of years president trump promises made, promises kept. take him seriously when he comes out. that has been his pattern for a long time. people should not underestimate that. we are working through the ways and means says you have to do in these things and it may not surface for a while, but that's his goal. stuart: promises made, promises kept. scott, if we do get a 10% middle income family tax cut, if we did get that, would that give us another leg up for the economy and another leg up for the markets? >> i believe it would. how long it lasts is the question. as we've noted all morning and this is a market kind of looking at the glass half empty right now. depending on what that does for the overall economy, the market will wait and see. to me, one of the thing scaring me a bit to be honest and i don't want to pour out the party punchier, but the housing market

is weakening. i don't know that the function of the interest rate picture as far as how it's been been increasing about loosing from the fed are just the fact housing prices in the area did recover mere 2007 levels and have to pull out. the reality is some middle tax cut help will help support housing prices here. i can do some winners for the economy as far as stability injection. stuart: i want to know what would you buy at this point specifically amongst us the big technology companies. i will put them on the screen. all of them are down today. do you see a buying opportunity in any big tax on the screen now. facebook, amazon, apple, microsoft. what would you buy? >> we do surely an amazon earnings coming out in a matter of weeks and that would be a good report. microsoft, one that i know you love still looks very good to us. google and facebook i still like them. i would put them lower on the list as far as the other two and

apple of course is another one we like. my top three picks of the amazon, microsoft and apple. google and the other one for now. amazon, apple and microsoft are the top three. stuart: what was i saying about stability? we dropped a few points and down another, down 400 points as we speak. real fast, scott, you want people to buy gold. tell me more. >> so look, when times like these occur in the market is going to do things just irrational. you've been talking about that all morning. if you look at things in your portfolio that you need to have been there, which we have in the has been shock absorbers not only have bonds been in there, but if you notice, rates have come down quite a bit. investors are running for safety, but gold is also providing the shock absorption. if you look at a place to go for a little while, gold is the

place to be. and etf we own is providing of the non-correlation value, meaning it's not acting like stock, not acting like on spirit providing a little return today. that's something you can buy to hold onto at the selloff gets worked out. stuart: scott, and sterling work here. we will talk to you soon. the market has taken another turn down for the worse. read it 24,900. we are down about two 2000 points in the highest average early in october. a judge in california upheld a verdict against higher the finest week in the roundup responsible for a man's terminal cancer. the judge reduced the damage award from $200 million. he cut it way down. judge napolitano is here. first and foremost, i don't think the court or the jury ever established a firm causal relationship between the weed killer and the cancer.

>> i can tell you how upsetting these cases i would stand for the following proposition . if you are the member of an industry known to produce a product that causes cancer and the plaintiff can show the plaintiff has cancer in your product, you're liable even if the plaintiff cannot make a direct connection to your product. so there is no direct finding by the jury that they are at south was viable, just that the community of chemical makers was somehow liable. the best thing the judge can do here is what she actually did, which has reduced the punitive damages substantially. compensatory, how did the plaintiff suffering punitive, how you punish the defendant. stuart: there is still thousands of outstanding lawsuits alleging the connection in bair still has to go up against them.

>> you know where it started? in new jersey. they are resisting it ever since. it is far too easy to prove the case in far too violative of due process because you don't have to prove the direct involvement of the person you're suing. stuart: you've got it. another one for you. the man was sentenced to eight years in prison in mississippi after being caught with marijuana that he had legally bought in oregon for his knee pain. he brought it back to mississippi. where is the justice? >> and outrageous punishment. there should be no jail time for this whatsoever. although, marijuana is unlawful for all purposes in mississippi. not even lawful for medical marijuana purposes. someday you'll report on this, the federal government will reclassify marijuana and we want to worry about whether it's awful and one stayed or not lawful in another. stuart: i believe that is a

proposal. judge, thank you very much. your market advice is really stellar. >> any time. stuart: etiquette to the caravan. 1100 miles south of mcallen, texas as we speak. next, my editorial i say this is a very big problem for democrats. after that we'll get reaction from his direct or tom homan. and of course we are watching your money. now we are down 400 points on the dow. yes, we will be back. (guard) what i've witnessed...

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>> i'm lauren simonetti on the floor of the nick stock exchange at a fox business brief. one trader told this morning, put on your helmet. more than 500 points. the nasdaq and correction territory. the s&p 500 down one and three quarters%, down five days in a row. plus, the russell 2000 come 2000, the smaller companies negative for 2018. bresson at the cost of the president's trade with china. the biggest losers on the dow today did report earnings. caterpillar and 3m. industrial stocks seen higher material costs. plus dupont and microsoft in the red. here's the positive. mcdonald's and united technologies, raising menu prices customers pain uts growing its sales 10%.

that is the latest on the floor. more "varney" after this. walking around here in their hundreds. so how do you stay financially well for all those extra years? well, you have to start planning as early as possible. we all need to plan, for 18 years or more, of retirement. i don't have a whole lot saved up, but i'm working on it now. i will do whatever i need to do. plan your financial life with prudential. bring your challenges.

stuart: the caravan is now about 1000 miles just over the top of the border. this has turned into a very big problem for democrats. they have encouraged the illegal border crossings. they have encouraged the caravan. the president says democrats are to blame for this quote assault on our sovereignty. the left must now face the

music. when the migrants arrive at our border on or about election day, and what is the democrats plan? i don't know. they want addressed the issue head-on. speaking in las vegas, former president obama simply attacked the administration with policy of family separation. what's that got to do with the large crowd of mainly young men determined to break into america? last week in an interview nancy pelosi says she focuses on the legal status of the dreamers. how is that addressed? the here and now caravan crisis scattered across the media today are pundits calling out the president because he said there are some very bad people in the caravan including middle easterners. okay, take issue with the president language, but tell us what are you going to do when they arrive at the border and what will you do with the tens of thousands more who will follow them.

7000 people plan to break into our country. a forceful response is required. you may quibble with plans to call in the military, but no president should allow an invasion. there's a parallel here. a million migrants almost all young men without asking anyone at germany's angela merkel, let them all in. she opened the border in truly divided europe. america is in the same position now. what are we going to do? silence from the left, action from the president. instead of a negative two weeks to the election, the caravan has become a surprise that favors mr. trump. the democrat on the wrong side of the. joining us now, someone who knows more about this than i do, former act in i.c.e. director thomas tolman. do you believe -- do you know

what the democrats response is when the caravan hits the border? do you know what they're going to do because i don't? >> i know more about this than you do. your dialogue was 100% accurate. everything you said was true. but look, use the word encouragement. i'll use the word enticement. i've got to give blame. when they talk about standing sanctuary cities are people come to this country and get to place protected from i.c.e. we can detain more than 20 days so they never get a judge to society, that entices more people are with the weak policies of this country and the democrats are the ones out there talking about nonenforcement. you have people like nancy pelosi saying isis out there terrorizing innocent immigrant communities. then you've got senator joe

lafrentz and let's abolish i.c.e. no, this is just by the caravan. family units are entering everyday at record numbers. this is a problem that sits at the feet of many democrats up on the hill. stuart: as i said in my commentary there, dependents are taking issue with the president because he said last night there were middle easterners in the caravan. do you know anything about that? they said totally untrue, unproven. >> i know based on intelligence reports and reporting from the border patrol the border patrol has arrested numerous people that are known and suspected terrorists. that's just a stone cold fact. i was actually the green room talking to the national border patrol president and he said he has access to the most sophisticated intelligence in the world. if he has information in this group, i'm not going to doubt that. he has access to the greatest intelligence in the world. but if you look at today and

will treat these things, absolutely yes. one example when i did operation matador in long island, new york, 40% of those under 13 members we arrested came into this country as an unaccompanied child are part of a family grew. criminals and bad people absolutely infiltrate these big groups. drink you do know more about it than i do not the fact. always a pleasure, tom homan. thank you for being with us on our vital subject of america. >> thank you. stuart: back to the market coming back to your stocks pared up on an otherwise down day. tesla, longtime critic, citroen research, and that's the name of the company had a change of heart on the company's outlook. they said it publicly and they're going to be on the show tomorrow by the way in the stock is up 5%. nice dinner in an otherwise down day. better sales and donald. strong demand all over the world. same-store sales up to big game

and that stock is up on a down day. up solidly $8 higher for mac donald's 175. president trump has three more rallies planned for this week. putting himself basically on the midterm ballot and now his campaign is launching a two-week ad blitz. big money. we are on it. back to the market. afraid we are sliding down again. up 450 points. the market heading lower again. we will be back in a moment. hey there people eligible for medicare.

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stuart: with just two weeks until the midterms come a president trump is going all-out to help republicans keep control of the house. his campaign will spend $6 million for a huge advertising blitz on tv and online. he also plans at least 10 more campaign rallies before the election. only 14 days away. 10 more rallies of the blitz. check the big tour down some more. we are down 461 points. 27 of the dow 30 and the red. backing they are down. come on in, jim a lot on the phone with us commenting on this market selloff. same question to you as many come in many other in this

program. if you're an older person like myself, for example any made good money in the market, is this the time to take some stock out, sell some stock, take the money, sleep well at night. >> to the extent that you have lower quality companies are speculative companies are momentum companies with high valuation, now that you do get return on money market deposit money market deposit, the answer is yes. the broader question is the condition. you have so much computer trading and mathematical quantitative trading when you get bad news the market goes down more than it should when you get some good news the market goes up more than it should. today you just had some questionable earnings reports, reasonable questions in the rate of change in corporate revenues

and earnings in people are using it as an excuse to sell. the broader question is at the time to buy, not to sell, but if you're an older person like you and i come it never hurts after a ten-year run to take a little bit of money and upgrade the quality. >> i'm reading between the lines and it sounds like market corrections were down, but we might bounce back. do you think we might bounce back soon? >> will finish the year somewhat higher than we are now. you'll not have the kind of market you've had the last couple years. the market's growing this way -- [inaudible] stuart: thanks very much for

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there's no obligation. you know medicare won't cover all your medical costs, so call now and see why a medicare supplement plan from a company like humana, just might be the answer. stuart: two big stories we've been following for you. the left-hand side the caravan, marching towards mexico. due to arrive around election day. the bottom line, president trump taking action. he wants to sop them. we don't know what the democrats will do when the caravan arrives at border. second big story, dow is down nearly 2%. down 500 points. susan, list negatives for me. susan: so many. negatives. markets are rattled right now. charlie brady came out with statistics, lowest for the s&p

since may. five-month loy for s&p 500. dow touching lowest since july, lowest in four months. nasdaq has touched lowest since the beginning of may. stuart: it's a selloff. the dow is almost exactly 2000 points below the all-time high reached just three weeks ago. time's up for me. but neil, it's yours. neil: stuart, thank you very, very much. we're following all of that. a couple developments could change this. we're looking to anything that could provide an opportunity to turn things around. the volume has been so strong here, there is a possibility that many companies and individuals who run those companies would have wider flexibility to start buying back their stock. that is usually, for example, limited to what, 25% of whatever that day's volume is in a particular issue. with trading volume running markedly higher on day like this, that is among the things you want to