i would expect at least 7%. charles: thank you both very, very much. the dow is off 868 points. liz, you know, your hour always has magic. i'm not sure what's going to happen but i believe it will be pretty wild. we are buckled up to hang in there with you. liz: i don't look like henry houdini. i certainly can't pull off these tricks. harry. harry. charles: you with the help of a tweet. wink wink. liz: right. i don't have that power either, but while you were talking, the nasdaq lost four full percentage points. folks, we are looking at a major flight to safety as we head into the final hour of a very ugly trading session. forget escalation. china breaking out the heavy artillery in the trump trade war, sending investors sprinting to the exits. a loss of 895 points was the new low touched in the last ten minutes for the dow jones industrials. right now we are still down about 844, after china lobbed two key economic weapons across the pacific. number one, american farmers

squarely caught in the crossfire at this hour after china's commerce ministry has now confirmed what state media reported earlier, the chinese companies have suspended all purchases of u.s. agricultural products. china also hinting that u.s. producers of soybeans, corn, wheat, sorghum and more, might see tariffs slapped on their exports heading to china that were bought after august 3rd. they kind of back up the truck on thatten woulone. the bears were gunning for a fight, after china's currency dropped below the crucial level of seven. seven chinese yuan to one american dollar. a major weakening of its currency to levels not seen in, i'm being told, 11 years. it was a decade earlier. now 11 years. all part of what appears to be china's very coordinated response to president trump's threat last week that he would add a fresh 10% tariff on $300 billion of chinese goods.

investors viewing the move as this new opening of a new trade front in the war between the world's two biggest economies. look at the nasdaq. i want to get to that. the dow is down 3.25% but the nasdaq is getting absolutely pulverized. down 3.9%, taking the biggest brunt of the hit because tech companies heavily depend on china. so they are feeling the crush in an outsized fashion. folks, we do want to let you know the decision has been made to blow out all commercial breaks in this final hour of trade on "the claman countdown" in order that we get you the market movements every second leading up to the closing bell which is now 58 minutes away. we need to make sure you see whether the markets gap down even further or if buyers start to venture in and take a few bites off the ground here. it has happened in the past. right now, so far, we are not seeing that. the nasdaq down 316 points. it's still pretty much a tsunami of selling. investors are scurrying to what we are calling fallout shelters as the currency bombs explode

all across our market, slamming into assets of nearly every asset class. again, this is a fluid situation. it's a little complicated. we do want to explain the situation. overnight, china's central bank allowed its currency to breach a sacrosanct level of seven yuan to the u.s. dollar. it is the first time in 11 years that the yuan has fallen below seven. the yuan ended the session at 16.9225. what does that mean? with such a low currency it's a back doorway for the chinese to hold on to global market share because a weaker yuan mean china exports become less expensive to the rest of the world. it also means the worst day of 2019 for the major averages here in the united states. the dow is on pace for its biggest one-day percentage decline since early january, down 891 points. check that right now.

s&p 500 suffering its biggest one-day percentage decline since christmas eve, down 3.5% or 101 points. you know, we will be showing the nasdaq quite a bit here because it is getting crushed, down now a full four percentage points. you see it there on the screen. 320 points to the downside. when you look, you see china trade dependent apple. apple's stock at the moment is falling and falling and falling. this is the one-week chart but the intraday doesn't look any better. started off down about 3%. apple now down 5.5% to $192.88. the chip makers, no surprise, they get most of their revenue from china. they do a lot of selling back and forth and buying with chinese companies. we have nvidia down 7.5%. that level, $149. micron technology down 5.66%. lam research down nearly 6%. let's broaden this out. look at the retailers. they get a lot of their

materials from china. what an ugly picture here -- that's not a retailer. those are trade sensitive stocks. boeing and caterpillar down 3.66%. cat also getting hammered. here are the transports. just behind the nasdaq which is down 4%, the transports are down, let me make sure of the exact mber, down 3.91% or 405 points. so we have delta airlines, jb hunt, fed ex, everybody hammered, anywhere down 4% to 6% losses. even financials, repulsed probably because they see to help stabilize the situation in this country, the fed may continue perhaps with more oomph or energy to cut rates. rate cuts are generally not great for financials. you have bond yields plummeting to multi-year lows. bank of america down 5.5%. if you wanted to buy jpmorgan it's on sale, down 4%. ten-year yield, let's look at this because it is touching the lowest level seen in three

years. november of 2016. 1.73% as investors rush to those fallout shelters, safety of bonds. call it relative safety. to some other spots. when we talk about safety, we are talking about spot gold. look at gold rising to its highest level in more than six years. we now look at gold at the moment at $1,468 even. $1480. then you see the volatility index. that too is spiking. this is the fear index. it's rising to highs of about three months that we are seeing at the moment. it stands at $2451. that's a 39% jump. so what's doing beautifully besides gold? we looked at exchange-traded funds that short and double-short chinese stocks and chinese currencies. they are having a field day. look at these names.

it gives you the three times payoff as the markets fall in china. ticker symbol yang is jumping 12% at this hour. you have the a share bear for china, chad, jumping nearly 5%. we could show the pro shares, too. these are names that tend to move higher because they are shorting everything from the names like alibaba to other chinese industrials and financials, up 8.6%. we have pro shares short ftse china 25yxi at 4.25%. we always know there's a trade. we don't always speak to an audience of long u.s. stocks. now to the white house. in the last few hours alone, president trump in a series of tweets has called china a currency manipulator four separate times. four times in the last couple hours. the name calling is doing nothing to soften the blow that stocks are enduring right now. we are now down 927 points on

the dow jones industrials which stands not at 27,000 or 26,000. we are at 25,549. to edward lawrence, live at the white house. edward, what are you hearing about any counterplan the president and his team might be coming up with, whether that be officially designating china a manipulator or even maybe backtracking on last week's new 10% tariff threat? reporter: i can tell you right now even though the president said it on twitter officially, the treasury department still has china not on a list of currency manipulators but on a monitor list for those possible manipulateors. what happened today, a gut punch for farmers. a ministry spokesperson confirming china will not buy any more agriculture from the united states. the chinese going further, saying they will additionally not possibly suspend the rollback of tariffs they were going to make on u.s. agriculture coming into china, that possibly could be suspended

according to that spokesperson. this comes as president donald trump believes the chinese are currency manipulators. he said it four times in four separate tweets today on twitter, saying currency manipulators. you see the tweet thers on your screen. each of the four, the president used the term manipulation for china's handling its currency. the ten-year and three-year treasury yields have been inverted since the beginning of may. this is not going to help that situation. all the associations ahead of this are basically crying foul. the association for american apparel and footwear says they are pinched in the middle. >> we can't deal with this. we have no way to deal with this. we honestly feel like we're pawns in an international chess game and we're going to get hurt and it's going to hurt the economy and now it's showing up in the market. so we hope that the president

will see the light of day and stay away from the consumer, because he's headed in our direction. reporter: at the last face-to-face talks between the u.s. and china in shanghai, chinese sources are telling us the chinese told the u.s. delegation they would not backed in any of the concessions that the u.s. says they deleted out of that agreement. those sources also saying the chinese told the u.s. delegation they would not change their laws for any trade deal. there are signs, though, the chinese are pulling back here further. the president saying he's concerned that china hasn't made those agriculture buys of u.s. farmers. that is likely something that is not going to happen. as we heard the commerce ministry now coming out and confirming they are not going to buy u.s. agriculture as they go forward because of the president threatening these tariffs. it appears the chinese will not be making those buys. the tone is hardening both sides. there is a meeting scheduled for september between the two trade delegations. we'll have to see if that meeting still holds true, now

that the japanese are digging in -- i mean now that the chinese are digging in and if the president reacts to what the chinese are doing right now. liz: do you think it's weird, i have the team put up the soft commodities, soy, oat, corn, wheat, you think it's strange these are up actually today? this as the chinese have suspended purchase of all u.s. ag products obviously as a punishment. the chinese did this early on where they wanted to target states that actually did very well for president trump, wisconsin and ohio and iowas of the world that did support president trump. what do you think? reporter: it doesn't surprise me in the fact that the president bailed out the farmers the last time around. we have had two rounds of bailouts, the first i think about $12 billion, the second, $16 billion. there's an indication that possibly the white house might be going the same direction in that the president has repeatedly said he would protect the farmers, would help the farmers.

he's repeatedly said that china is paying into the u.s. treasury these billions of dollars and he wants to use part of it to help the farmers out. this might be a reflection of that, people believing there will be another bailout down the road for the farmers. we'll have to wait and see. liz: to be clear, he says china is paying into u.s. treasury. that is american importers who are paying it. reporter: it is a tax. we all know that, yes, the american companies or companies that are importing are the ones who pay the duty on this to customs and border protection. that money that goes into the u.s. treasury. ultimately, it's either absorbed by the company who is having to manufacture it or the cost is passed on some way to the consumer. liz: i want to let our viewers know while edward was talking, the dow fell 961 points. that's the new low. we are now down 865. what did i say at the top of the hour? it is possible that buyers could start coming in in the last, we have 48 minutes left of trade. we don't know whether that will actually happen.

i wouldn't necessarily call this slight move back toward the green line anything like that. but at the moment, we have decided to continue to blow out commercial breaks until that closing bell. 961 is the new low, a loss of 961 points for the dow. it is the nasdaq that is taking the biggest outsized hit, about now 3.8% losses for the tech tech-heavy index. investors should have seen this coming. according to the stock traders almanac, august is the worst month for the dow and s&p 500 since all the way back to 1987. on the other hand, august is typically a totally splendid month for wall street's fear gauge, the vix, as we showed you spiking, certainly, and the vix is proving the almanac right. it is up 49% in just the three trading days of august. let's bring in our floor show traders. we already pointed out that gold is at a six-year high.

what other flows are you seeing and into which investment that indicate to you that investors or your clients are clamoring towards specific defensive areas? scott, what are you seeing? >> depends on what type of investor they are. if they are very active, most of them on thursday when trump put that tweet out and we broke around 2980, that's when they went pretty much probably to a little bit heavier cash positions because the accelerated trend growth. now the more intermediate macro investors are looking at 2840, which we are a little below now, a 200 day ema that measures the bigger trend. we are a hundred points off lows of the dow. if we reclaim 2040 today it might relieve some pressure. there are still unknowns out there. big portions of cash until we get more data makes sense. liz: phil, can you describe the floor of the cme, especially when we hit the session lows about four and a half minutes ago of a loss of 961 points?

>> a lot of activity, especially in the s&p 500. we saw a lot of movement in euro dollar options today. you know, it's kind of a weird professionalism. it's not the type of panic selloff. you look at this number and think the world's coming to an end but it seemed very professional. actually, i think traders were kind of embracing some of the volatility today. they were actually taking advantage of it because if you look at the chart, it was pretty much a straight shot down. i think a lot of the floor traders did pretty well today. if you ask me what market is back, bitcoin. bitcoin was the other one that exploded today. they might make a run and try to catch up with gold. yeah, a lot of the safe haven plays, back in play. for the stocks, it's ugly. for commodity traders, sometimes they embrace this kind of volatility. liz: we are showing bitcoin now. it is gaining about $1,337 to

$11,799. that isn't even high of the session. we came just under $12,000 for bitcoin. interesting to see that new trade when it comes to flight to quality. luke, i also wanted to point out, we were showing currencies. we could maybe go back to that for a second. the japanese yen i noticed has raced to a seven-month high. the u.s. dollar used to be the safe haven trade when it came to currencies. right now we are looking at a yen that's, yeah, a hundred japanese yen, pretty interesting to see what's going on. what are you seeing as far as defensive plays? >> as far as defensive plays, it's kind of like my outfit today. very basic. got to go back to the basics today. no imagination needed today. you've got to take off some of your positions if you're levered. you got to go into cash. we have been saying for how long here that there is no deal with the chinese. we have been saying that for so long here, over a year at least. we have been saying you should

own stocks with volatility. look at what's happened with volatility today. volatility was just too low, for all the news going on around the world. as i have said before, if you got to be in the market, you've got to be looking at dividend payers. in the last hour you asked why the ags were going up. if anyone is going to get in a currency war, you want to own commodities, not oil, because that's tied to growth but commodities to protect your purchasing power, buy wheat, sugar, et cetera, stuff that people are going to use. right now, you got to scale back and this move by the president kind of shocked me. i think his team should be a little surprised here. you might see some changes in the negotiating tactics and the people who are going to do the negotiating. liz: i'm looking at a dow that is all over the place. in a range at the moment where we almost went back down about 900 points, with 43 minutes before the closing bell rings. i want to keep letting our viewers know the exact timing

here. there are certain points of trade and i think it's fair to say, scott, down at the nyse, about 20 minutes before the top of the hour you start to see real movement. can you anticipate whether that movement will be back down and breaching the floor or climbing up off the low sns. >> sometimes you can look at the timeline and we see really negative, it will tell you the buying just isn't there. there is a good chance we close through the lows of the day. then you have mocs, market on closes, where big funds and institutions all of a sudden don't show their hand, then they show their hand so that kind of gives some indication as well. as of right now, what the other gentleman said, we haven't seen fear in acceleration yet. all we have seen is a grind lower. usually a bottom happens once you're grinding lower, then you get the waterfall effect. i don't think there's enough time for that today. maybe tomorrow we have a little bit of turn-around tuesday for a trade. liz: phil, you just had luke saying it was a surprise when the president announced last

week new tariffs that would come in september 1st. it was oddly kind of eerily quiet from the chinese side. the president announced that thursday. we were right here on the show. we saw all of that. not a great day for the dow. the president then said he wasn't worried about the fall in the dow which was a couple hundred points. nothing like this. down 834 at the moment. we got an analyst who specifically said over at bmo, the wait is over for those wondering how beijing would respond to president trump's recent tariff announcement. now we know, depreciating the yuan, that currency. you can see the big drop-off here. more than 1% drop-off certainly overnight and i'm just wondering what you think of how coordinated it appears the chinese kind of stopped, must have gotten together all weekend and decided this was the way they were going to go and it only opens up a new trade war front, does it not? >> it does. but i think they are going to

shoot themselves in the foot. if i was a chinese billionaire, i would be looking to get the heck out of the country. get my money out of the country. it's going to go out of there like crazy. the chinese i think are acting emotionally to donald trump. i think this is an overreaction to a 10% tariff that actually hasn't happened yet. i think, now, the other thing is when you start manipulating your currencies, you start to break other rules with other countries. because right now, there was maybe some sympathy for china from a lot of the trade partners around the world. this donald trump guy, he's too hard on china, these tweets are ridiculous. now you start going to manipulating your currency and playing hardball, now the gloves are off. it doesn't only impact the united states. countries around the globe. if you're in the world trade organization, how do you justify manipulating your currency? china came back and denied oh, we're not doing that, we're not doing that. well, they can't do that because

they would be in a clear violation of the world trade organization rules. and if they do that, there might be a lot of pressure to squeeze them out of there. it will be very interesting. this will end up, i think, hurting them more than it hurts us. it's like shooting yourself in the foot. liz: yeah. well, both are waiting at the moment. we shall see. i don't know. we should also mention retailers are taking a significant hit. macy's is hitting a new annual low, down more than 3% at the moment to $20.62. check out best buy, down 3.75%, at $65.94. kohl's, down about -- that's not -- it's interesting because kohl's down 2%. these are all names that do import a lot of chinese-made goods. flip it to foot locker. this is really a kick in the gut to a company that has two things going against it, retail and they are a shoe retailer. shoes have always been exposed

in a more dramatic fashion to tariffs due to tariffs that go all the way back to depression era smoot-hawley rules. right now, while foot locker is trying to climb up off the bottom it's still down about 2%. either way it's a new annual low, part of the dumpster fire that is the retail sector at this hour. we would expect these names with china exposure to get slammed but charlie gasparino is here with his take on why the broader markets have taken a dive. every single s&p 500 sector is in the red at the moment. >> yeah. i think part of it is just a lack of confidence in trade policy out of the administration. i would say, you know, we can crunch the numbers all day. no one can really tell if the tax cuts and deregulation, you know, whether that is enough to offset a trade war with china and the rest of the world. you know, the markets can't tell right now. we still have decent gdp growth. we still have, you know, 3% plus

unemployment. the economy is still growing. however, when you start seeing some of the stuff that came out of the administration this weekend, it's pretty clear that it's not the adults in the room that are running trade policy. it is not larry kudlow. it's not steve mnuchin. it's not even bob lighthizer. it's peter navarro. now, while peter navarro is a very nice guy, a smart guy, a harvard ph.d. in economics, he's not trusted by the markets. the market, most investors think the guy is like out there on the spectrum when it comes to trade. yet he's the hawk. there were several reports that said that he's the one with the president's ear on this stuff -- liz: i do have to say i spoke to him after the show on friday on the phone. he did not like when we had our big retail lobbyist, the shoewear lobbyist on, matt priest, who basically said the same thing, and i spoke to peter, i said come on the show. he said okay. he will come on perhaps tomorrow or wednesday, he said.

to explain why he continues to say and have president trump say that it's the chinese who are paying the tariffs. >> if you notice, there are only two people saying that. over the weekend, chris wallace interviewed navarro, navarro said it. donald trump said the same thing. it's not accurate. i mean, it's absurd. liz: he looks at it in a way the chinese devalue their currency, which they did over the weekend, hence you come up net-net sort of neutral on the cost. >> right, but then does that mean consumers don't pay in the long run for higher prices? i mean, does that nullify -- liz: the importers are paying. >> someone's paying. right? all i'm saying is that most economists, most investors don't believe that argument, okay? whether it's true, let's just not -- let's be value neutral here. we don't know whether it's true or not. the bottom line is the investor, investing public, meaning any

algorithm out there, any big-time investor that's looking to play this, does not buy the navarro-trump argument and they are worried that navarro is influencing trump on this more than lighthizer or i should say more than kudlow, mnuchin, lighthizer and others. that's a problem. i think here's the other thing, to get to phil's point, he thinks the chinese have overplayed their hand. remember, the chinese, xi does not have to run for re-election. donald trump does. this trade stuff, you know, will impact votes because if it does impact gdp, and if donald trump can't point to the stock market which he loves to point to, you know, it's going to take away a talking point for him as we go into 2020. so listen, i'm not a doom and gloom guy. i cover this like baseball. but clearly, if you want to know why the markets are freaking which this is kind of a freak, although it's less freaky now than it was five minutes ago. liz: nearly 200 points off the

lows for the dow, down 775. >> if you want to know why the market's freaking it's because investors believe that the rational, who they consider rational on trade does not have the president's ear, it's this irrational guy, peter navarro who quite frankly is a nationalist on trade and he says some pretty -- he says some stuff that spooks the markets. you can't get around that. it's so obvious that he's bad for the markets, that he's not trusted as an adviser to the president. like i said, nice guy. i don't dislike him. i'm just giving you what i'm hearing from wall street players. liz: all right. again, peter is expected on the show within the next 48 hours. >> hope i didn't ruin that for you. he's got to fix this. liz: now he's really going to come on. >> one thing i will give peter this, he's going to argue with

anybody. he doesn't shy away. liz: that's why i got a call on friday afternoon. thank you, charlie. we do want to just press the reset button on the markets, because we are trying to come back a little bit here. you can see maybe the bulls are coming out of the bear cave at the moment. the dow is still down 805 points. i want to point out the trading volume is heavier than usual. that means there is conviction in this selloff. all you have to do is really look at the oil picture at the moment. today, u.s. crude settling at $54.69 per barrel, down 97 cents or about 1.75%. we are just down about 1.5% at the moment. so no real change. but energy stocks were some of the biggest losers because the trade war could dent demand. dow jones news wire's editor glenn hall, we pulled you from upstairs. what's it like up there? what are you focusing on as the selloff takes real hold? >> we are watching all of the

implications globally on this. there's more than just the trade implication. there's the other relationships around the world. the other trade deals that the president is trying to get in place but ultimately, we are watching the fed closely right now, too. liz: when the fed looks at oil, it sees marathon petroleum down 6%. you have all these other names, those specific names, whether they are in refining or integrated oils, why is oil getting slammed as much because they feel that if the global economy starts to really waver, demand will go down? >> i think that's got to be a big part of the equation right now. if you are going to see a trade war actually emerge, that's going to have repercussions outside of just the basics of retailers you have been talking about. there's a lot of question there and i think as i said, getting back to this battle, you see two men, xi jinping and president donald trump, who are unlikely, have shown unwillingness to back down. are we in for a long-term trade war? the markets were betting that

this might be over soon. maybe that's not the bet anymore. liz: we are already more than one and a half years in. what would you call long term? this looks protracted to many people who thought it might be quick. >> when you see the chinese unwilling to give up the currency threshold to the dollar, that was symbolic beyond the u.s./china relationship. that spooked a lot of people. liz: the president in the past couple of hours four times has tweeted that china is a currency manipulator. that has not helped the markets. we are still down 840 points for the dow jones industrials. folks, we have 31 minutes left of trade. we will not, as i said, be taking any commercial breaks because this market is way too fluid. you can see the asian markets, that was before all of this insanity here in the u.s., also got dinged, down about 3% for the hangseng in hong kong. they have their own problems with all kinds of protests there. singapore and the nikkei 225, we really should show the shanghai because those two as i'm looking

were also down about 1.6%, 1.5%. when the president puts that out there and says china is manipulating its currency, say they officially designate it, that the treasury department comes out and says we are changing the designation. right now it was on watch. say they officially designate it. what does that do? how might that change anything? >> the treasury actually has two things it can do. it can go through the world trade and have that kind of official designation and take them on in court and who knows what kind of protracted issue they get. they have a more short term option which the treasury is authorized with the president's approval to take its own actions in currency to stabilize exchange rates. it's a question of whether they will use that gold standard authority that they have. liz: will it change anything? it only exacerbates. >> it's a tit for tat. it keeps this thing going and will really accelerate the uncertainty the markets are reacting to today. liz: from your experience, which sector of the markets is most nervous right now?

>> i think we are seeing the nervousness in regard to all of the areas that are directly impacted. you saw in the technology sector which you were mentioning, a lot of need for those supplies. you are going to see it also in eventually in the agricultural sector if this plays out. liz: glenn hall of the dow jones newswire, thank you very much. we appreciate it. 29 minutes before the closing bell rings. dow jones industrials down 851 points. look at the transports, down 3.5%. these are all the names such as fed ex, ups, airlines, delta, american, not to mention the railroads that are moving a lot of the chinese-made goods that come into our ports. the market action decidedly negative at the moment. say that again? okay. all right. let us talk about more regarding the market meltdown and digging just a bit deeper here, we have china's main newspaper saying the currency has three different names. we know that.

the yuan, right? it's all leading back to the same firestorm. the yuan falling in value at the very moment, breaching the key seven yuan per dollar for the first time in a decade. closed at about 6.9. it's a weaker currency and makes a very powerful and sharp weapon in this trade war for the home country because it makes their goods less expensive to our consumers so people keep buying them, perhaps. but why are our markets flipping out or freaking out, as you heard charlie gasparino say? raymond james washington policy analyst ed mills is here, and aei resident scholar and china global investment tracker author derrick fizzers. let's get to you first. derrick, is this another manipulative move by china or proof the collective global confidence has been all but lost in this asian superpower?

that may be overstating it, maybe exactly what president trump would like people to think. what's the reality for our viewers? >> well, it's a very small currency change in valuation. it's less than a percent and a half. it's long overdue. china faces a slowing economy so objectively, it's tiny and the markets are wildly overreacting. i think part of the market reaction goes to your second point that they are losing confidence in the chinese ability to manage the situation. one of the worries we have about the yuan crossing seven of the dollar is where does it stop. last time china tried to manage a depreciation of the currency in august 2015 and january 2016, it triggered their version of a recession with a huge amount of capital outflow. liz: but then didn't they put restrictions on wealthy people to prevent them from moving currency out of the country? i recall that happening. >> yeah. very sharp restrictions, as in up to the point of you disappear

and no one ever sees you again kind of restrictions. yes, those are in place and that may help. but if you make people really nervous about what the value of their rmb assets are going to be, whether it be stocks or property, they will find a way to get out. that's the danger here. if this is a 1% move and they want to play around at seven, it doesn't mean anything and u.s. markets will recover. if they lose control of it, that's when people are afraid that even those capital controls won't work. liz: you have got to tell me how you view what's happening with the markets and the reaction to this. what is very much at the heart, it can't just be this devaluing of the currency. right now we are down 814 points. every single s&p sector, the bigger ones are in the red. yes, we already showed these chinese etfs where you can double short them. you can short stocks and currency when it comes to china. those are doing really well. but who knew to go into that. i'm just interested to know how you are interpreting all that's happening.

>> i think what we are seeing here is a fundamental shift in the chinese position, through the last year and a half that you have been talking about, that's been going on for awhile. the way china has always responded is played the victim. they have always been keen to kind of wait for the u.s. to act and only after something has gone into effect where they respond. since may, what we are starting to see from china is that they become much more aggressive. the g20 meeting, trump thought they were going to buy some agricultural products. since then, they have refused to purchase agricultural products. it seems like a pretty small ask to start things going and if you're not even willing to do the smallest things, and you have seen the shift from being the victim to the aggressors, i think the market is starting to change the way in which they were viewing this trade war and whether or not it's going to get worse from here. liz: amazing, derrick, there was

a draft between the two nations that was very close to being done and everybody involved said suddenly the chinese moved the goalposts. they refused to include what they had said they would include before. when you talk about the issues that matter to america, they are basic ethical issues that you would hope any normal market or country would adhere to such as don't steal intellectual property, don't thieve away that stuff and don't force technology transfer. >> yeah. i think we were a little too optimistic in may because apparently the chinese negotiator did not have the backing of his senior leadership. i agree with you entirely on your second point. we are asking for something basic. the chinese don't want to give it to us because they have been stealing intellectual property and coercing technology transfer for years and years and years. it's been an enormous gain to them. president trump's basic demand that how about you be a better trade partner is not one they

actually want to fulfill. so they look at this as american aggression because we are asking them to act like a normal partner. liz: ed, raymond james folks probably coming to you saying now what. one thing that appears to be perhaps a sure path is that the federal reserve might now be really forced to definitely cut rates, not just beyond september, where it was during the show on friday that we had 100% odds there will be a cut in september but what about october and december? >> yeah. or you know, what we have seen here is that powell came out and told us that a large part of the reason why we had this 25 basis point cut was the uncertainty on china trade and that he would cut again if it got worse. what did trump do? he saw him that cut and raised him a 10% tariff. what we'll also look for is what can be done outside of the fed. are we on our path to a currency war. we wrote at raymond james a

report last week highlighting all of the different executive branch authorities that this president, the commerce department, treasury has, so this is going to be a more full-throat full-throated kind of response if china does not act to deescalate this. liz: guys, thank you. it's a busy day. we do just want to say with 22 minutes left before the closing bell rings, we do have the september rate cut chances now at 78.8%. we know that it's 100% for september but as we look and see exactly the situation, it's on the move at the moment. let's talk about tyson foods. we do need to get to that. if you're looking for any kind of bright spot, tyson is the one name that's leading the s&p 500 at this hour. it's on pace actually for a record close. it reported solid earnings, 8% increase in third quarter sales and the food company, this has got the brands like jimmy dean, tyson, hillshire farms, up 57%

this year alone. add another 5.5% at this hour, you have tyson foods at $84.10 a share. tyson's the big exception. i know you are down on the floor of the new york stock exchange, jack auchlt ha jackie. jackie: that's exactly right. tyson having strength in most of its segments but this was a rough day for the markets coming off session lows, dow down 758 points as we speak. the dow, s&p and nasdaq are all on track to have their worst day of this year. the tech heavy nasdaq looking at six straight days of losses. of course, tech has been a loss leader across the board, not just in the big names like amazon, microsoft, apple, but also in the semiconductors as well. that's because so much technology business is done with china and there's so much exposure there. china finally, as traders expected, did punch back and devalued its currency. that's why we are selling off so

strongly. the traders on the floor are worried this is the point where we start to see the impact in u.s. sales from different corporations, in the bottom line in terms ofprof. that's why you are seeing this selloff today. you know from years of doing this that august can be a pretty quiet month but traders are saying they are actually bracing for more volatility to come because these conversations with china won't pick up again until the fall and there is still really no resolution in sight. it wasn't just limited to tech today. we also saw broad selling across the industrials, every stock on the dow down today. also, in the financials as well, because you saw that flight to safety in the ten-year note. interest rates go down, things make less money. this is sort of there's a waterfall effect here. liz: yeah. glad you brought up the ten-year. i do want to get right to that. we are seeing that yield curve inversion a little bit sharper at the moment. kevin carrone is on the phone.

i have to say we could look at big tech or treasuries but when you see the ten-year yield at 1.74%, then the three-month at 1.97%, that's a significant inversion there, where the shorter dated treasuries are paying out more than what the longer dated ones are. what does that tell you for an investor? >> the interpretation of that has always been to look out for a coming recession of some kind. it's been a pretty good predictor of recessions, i think, all the last important recessions we've had have been preceded by such an inversion. it also tells me that the market is looking for further rate cuts by the fed and other central banks around the world, then lastly, it tells us something about what the appetite for risk is. the market has become concerned about escalating trade wars and what that means for the outlook.

consequently, investors have moved into very low-yielding global bonds as at least a temporary respite from the volatility they are seeing in equity markets. liz: equities are down, obviously. that's a captain obvious statement. but when you are down, you are on sale. why are we not seeing more buyers coming in right now? i thought there were all kinds of program trades where you have the algorithm guys who, once we hit a much lower level, you start to see the bottom, you know, the bottom feeders come in. right now, we are just 200 points off the lows but still down 751 points for the dow. microsoft's 3% cheaper. apple is 5% cheaper. where are these people? >> there are only two forces in markets. one is the prevailing direction of things and a helps takesitan step in front of clear trends and the trend today has been down. there's a hesitancy to step into

that. secondly, look at where we are in terms of valuation. we aren't at very low multiples. we are looking at a market that's trading at a significant premium to the underlying gdp of this country. it doesn't really look like the market is all that cheap. look at where we have come year to date. we are seeing very significant gains here today. there's just not enough value there yet to entice the deeper value investor into the fray yet. liz: what are you doing? what are you advising clients right now? >> well, washington cross advisers, the division of stifel that we are responsible for, what we have done the last month or so has been number one, we cut back our equity allocation because our washington crossing advisers barometer which to us gauges fundamental conditions, that slipped a little bit as economic data has been somewhat weak, then secondly, we have been looking at adding to more defensive positions in the areas of commodities.

so looking to hedge portfolio a little bit maybe with exposure to gold or other assets that are not quite as exposed to the equity markets. overall, not a very bearish point of view just yet. just took some of the chips off the table. liz: what we are looking at, for our listeners on xm113, channel 113, microsoft does have some buyers coming in. while we are still down 3%, you can sfree from this intraday cht we are coming up just off the lows. microsoft is still over $1 trillion market cap. so it still retains that. apple, for its part, still down five full percentage points to $193.81. but the low today was $192. we are not far off that bottom here. stocks are tumbling and yes, the volume is heavy, folks. we do want to point that out. we also want to point out it's

not just gold that is moving higher by about 19 bucks. we have palladium moving higher by 12 bucks. platinum better by $5. when you are looking at platinum, these are metals that are sometimes considered flights to quality. silver, interesting, just a couple weeks ago silver was at $14. it is now at $16. we are just trying to give you the information, with exactly 15, count it 15 minutes before the closing bell rings. where people are moving in, at least some of the faster market people and participants. financials, though, just getting hammered, falling the most in three months on that yield curve inversion i was just talking about. it all comes from the racheting up of tensions with china. let's get right to the floor show, part deux. traders at the new york stock exchange, cme and nymex. scott, what are you seeing in the last 15 minutes? any difference in volume or i guess direction? >> yeah. volume has increased, as you mentioned, but we really bounced off 200 day moving average in

the dow. we thought that was the low, just below that we have seen a rally about 200 points. i would anticipate tomorrow morning, we could see some selloff continue based on what we will see out of asia and europe trying to catch up to where we are today. then maybe we will get a tweet, something from the fed as the governor talks tomorrow, maybe we get signs and the market can find something to rally on. liz: i thought we had esther george making some comments. luke, let's bring you back. you had said you were perplexed by the way the president is running the trade war. do you think he anticipated this kind of reaction from china when last thursday, he said he would bring in new 10% tariffs on $300 billion of chinese goods that would kick in september 1st? >> no, absolutely not. i think he knew beforehand, his team told him trade talks weren't going that well, he was trying to push the fed for 50 basis points because he knew he wasn't getting what he wanted.

he made a little move, okay, it was a little agitation but i don't think he expected this. like i said, if you are going to get around the table, they might have a different point of view. there might be different people negotiating this thing. again, we have known for over a year the chinese were not going to make a deal like this. the tweets today from the president about currency manipulation, your former guest a little while ago was right, it's going to have g20 effect, it's going to have world trade organization effects. if you label it as that, you've got to go through steps and prove that. other countries might not trade with you. they might be forced to call you a currency manipulator. it's not good. liz: yeah. esther george did speak today, in the last hour, and it still doesn't appear like she or brainard are interesting yet in coming with both guns ablaze when it comes to rate cuts. they still say they are

monitoring the situation closely. over at the cme, has anything surprised you about the flows you are seeing whether through currencies you are seeing on the ground? by the way, we do have the euro stronger against the u.s. dollar, same with the yen, but the peso and canadian dollar are weaker against the greenback. >> that's the biggest thing. this is about the currency devaluation. actually, from my perspective, i think it could have been worse. the dollar was at two-year highs, people were saying it's going to be too strong so we had that correction there. the other thing i would watch, too, how much of a percentage move has this been. two weeks ago, 15 trading days ago, we were at record highs. today's low is 7% off the top. you can't have a 30% rally from christmas and not expect some backfilling. is this thing going to accelerate and go lower, i don't know. nobody knows. anybody who tells you they do know is lying to you. liz: 3% more, we just got a correction and that wouldn't be the worst thing in the world,

right? >> no. no. liz: don't you have to let some of the air out before you can inflate more? >> everybody has been looking for the dip to buy. that may be your chance. we will see what happens. longer term, yeah, the currency the way it is, 11 years lows against the dollar, that's going to take awhile to ripple through everything. liz: we are down 755 on the dow, low of the session a loss of 9 sku961. does this encourage you the bulls are coming out? >> do you want to be down 300 points over the course of three days or do you want to get it done all at once? i want to see how europe acts tomorrow, how asia opens and how we open tomorrow going into it before i will really make a call about stepping in and buying and seeing if the bulls are coming out of the woodwork because maybe we do need to get down over 10% to get in correction mode, not yuft tjust the russel index, maybe the larger caps need to see more pain and

suffering before we get a bounce. liz: these names have become a lot less expensive at the moment. we are looking right now at walt disney. luke, we do expect disney earnings after the bell. disney had an amazing story over the weekend. it is very rare when it comes to box office, where a three-week-old movie that was already out for three weeks climbs from third place to second place. that's exactly what "the lion king" did. not bad for disney. there's some great earnings stories to be had. >> yeah. i think disney's a good stock. we are long in one of our portfolios. watch what disney earnings do to netflix. one of the biggest competitors getting into streaming, et cetera. i also think it's time to take a look at some technology stocks. a lot of people might be scared off right now but we're not going back to smoke signals and carrier pigeons. even if the economy goes down, even if things get worse, technology is a good place to

hide. look at some of the names you have been wanting to get into. over the long term, tech is not going away. liz: i'm looking at ticker symbol pvh, it is down about 4.75%. just any random name here and they are suffering. i'm looking at nvidia down nearly 7%. so the chip makers are really down for the count at the moment. how does this shake out tomorrow? can we spin it forward with the dow down 767, nine minutes to go before the closing bell rings? >> i think people are looking for that 10% level. that's about 24,600 on the dow. also, crude oil is hanging in there pretty well. that's one market that really didn't move much at all today. watch crude oil, see if the $50 level holds. liz: can we punch up crude at the moment? i'm looking at it. you know there's a problem with the markets when my screen isn't working.

crude oil is down about 1.5% and it is, well, you could call it slightly off the lows during the regular session because folks, we are in the after-market session. when we talk about china, we've got to look at chinese stocks. e-commerce giant alibaba, no surprise, taking a dive that even jeffries new buy rating couldn't help. it was actually a new buy rating on alibaba. back to jackie on the floor of the new york stock exchange, eight minutes to go before the closing bell rings. no commercial breaks, folks. go ahead, jackie. jackie: you can see, these stocks are taking a hit. alibaba is down 4%. baidu down more than 7%. jd.com more than 7%. this is going to be an ongoing back and forth situation. china punched back today. now the question is, is the united states going to take this lying down, or is it going to do something about it. potentially with its currency as well. if the stocks that are going to lose here are not just our corporate stocks which we are

seeing a huge selloff today, but chinese stocks are going to take the brunt of this as well. it's not really a good situation on either side. many of the traders here are saying they hope over the course of the next month that things will quiet down a little bit and when these talks resume in september, some sort of agreement can be reached so this market can find a little bit of a calmer, more peaceful place to trade. right now, the dow is down 780 points and it looks like all three indices across the board today are going to see their worst day of the year and that makes it hard for traders to know exactly what to do. we saw a flight to safety but we are certainly going to see a reallocation in terms of asset classes and also, the kinds of stocks traders are looking at as we go forward over the next couple of weeks. liz: jackie, thank you very much. low of the session, a loss of 961. folks, we are now down 775 for the dow. s&p down 87. we are coming up off that bottom

but not by too much. let's get to sort of focus on your portfolio and getting some titanium around it. fox contributor john layfield getting in front of our cameras. there you are. janet johnston in the chair here, portfolio manager. john layfield, the last time you were on here, you specifically said you had a shopping list of names that you weren't ready to start purchasing when it came to stocks because you felt like something crazy was going to happen. is this the crazy and have you started to fill up that stock shopping cart? >> i hope this is the crazy, to answer your question. it certainly looks like it is. i think people are starting to realize this trade war is going to be a prolonged event and that more is probably to come. hopefully the market doesn't suffer much more than this. but it certainly could. that's why i think with yields so bad in the world right now, that before -- in the last several years, up until the fed

started raising rates about a year ago, dividend stocks were de facto bonds. i think they're going to be again. i would look at stocks again that have a very high yield. liz: we are now below the 50-day moving averageor the major indices. what does that mean, folks? those are key levels that you want to see if you are a bull, you want to see these indexes stay above. janet, to you, tell me how you are viewing it. through which prism as an investor and as somebody who advises people. >> so we think the market has had a huge run, so a correction isn't surprising. you know, obviously there's a trade war issue, there is the inverted yield curve. but on the other side of the coin, we also have the u.s. consumer is very strong. unemployment is fantastic. their balance sheets, their savings rates have gone up. we also see consumers in europe,

japan, asia, where there's record low unemployment. we think that some of the statistics don't reflect the consumer side of the economy. liz: chris, i know you're on the floor. we just have exactly four minutes right now, four minutes left of trade. again, folks, stay right here. we've got to see what happens because we do appear to be coming slightly off the floor here. what do you think, chris? what happens and how does this sort of >> we'll trade all night electronically. that will be key. we'll see what happens with the asian markets. you have to remember the high on the s&p, 30, right? 10% off there is 2730. that is the number people look at. if it holds people will buy the dip. we'll reveal wait. if the market shown us one thing last 10 years, when we get the dips, there are opportunity to

buy, i would say, if i have a long term horizon, shopping list, make sure you're looking at it tonight. liz: what john layfield as right now. bp is on the shopping list. before i get back to john i ask luke at nymex, about energy names and quality names that might be down for the count? yeah, liz -- sorry. >> on oil stuff it is so difficult right now obviously there is plenty of oil in the world. global growth will go down just because of these tariffs. any ceo is not making any new investments whether in retail or industrials, right? they want to see how this shakes out. this gives them an excuse to sit on their hands. i don't know, the oil names, a lot of them are cash-rich. they pay dividend. right now i think you have to wait. liz: john layfield, the last time you were here something

stuck out in my mind. you said what the president was doing with the trade war was self-sabotage. today we certainly don't like it if we're long the market. everybody with a 401(k) or pension or 529 plan is hurting at the moment. how do you see this playing out? >> i think it will be a long affair. i tout it would be a long affair for quite some time. the president and his team have overestimated their hand and the chinese. the chinese is looking at imperial power rolling over them and even if it is in their best interest, i don't think this will make a deal. i think it will play out over time and it will gets would. fortunately the u.s. economy is does really well. the world economy is not. the u.s. is the place to put money. otherwise i think the stock market would be really reallying. liz: 10-year yield, 1.73%. it was, 1 1/2 weeks we were

2.09. janet, where do you find a safe haven at the moment? >> in this environment you buy high quality companies with strong balance sheets, free cash flow growth. those are the names we like to own in our portfolios. i will say the big companies what we've seen is trade diversion. people are moving manufacturing to vietnam, and other areas of southeast asia. we're seeing consumer is paying a little bit. the companies are paying a little bit. the manufacturers on the other end. so far it hasn't impacted companies quite as much as people originally expected. liz: john, we have 30 seconds before the belgians to ring belgians to ring. what do you think happens? >> i think market moves sideways or goes downs.

[closing bell rings] >> i don't think people handicap what is going on in the world. liz: depending on which prism you look, stocks are cheaper or your investments are worth less. melissa: global trade fight intensifying amid fears of a global economic slowdown. china allowed currency to go more than a 10-year low versus the dollar. major averages down near 3%. the dow down 766 points. we were down more than 950 point earlier in the session. i'm melissa francis. ashley: i'm ashley webster in for connell mcshane. this is the "after the bell." what an ugly day