rick santelli is at the cme with the santelli exchange. >> i would like to welcome a very special guest. anybody who has ever looked at a chart knows tom demark and his reputation. thanks for taking the time this morning, tom. >> always great to be with you, rick. i don't mean this to sound in a negative interpretation for new york fed president mr. william dudley. but there are just literally thousands and thousands of fundamentals and mr. dudley was talking about them. after it was done, all coy think of is many made fun of technical analysis. but modeling human behavior is much more consistent and sometimes as your work shows, much easier to get good signals, let's start with your most recent success signal on the chinese stock market. the shanghai index. what did you see and how did it turn out? >> well, we've had a number of calls in the chinese market since december 4th or 6th of 2012. and fortunately we've had a high success rates identifying the tops and bottoms within one or two days of the top or bottom so we've had a good string and hopefully this is another. we were looking

to the cme group and check in with rick santelli and "the santelli exchange." >> reporter: hi, carl. i might be the guy on the air when we go on air for the dow jones industrial average. fits and starts, it was one of my topics anyway but not how the change has been all year when you look at it with respect to change but a bigger picture from chicago ism this morning, pmi, that exact line was used. fits and starts. what she was looking at with the relationship between order backlogs, production, and it really does all fit together because those managers are looking at the same data points, kind of trying to assess the economy just like we do here at cnbc. look at gdp. over the quarter starting around 2011, you'll see what i mean. fits and starts. so it shouldn't be any surprise in a world of trading, business cycle extension that that's what we see. and actually that's the topic i want ed to talk about today. i've read so many articles. we've talked about this many times on "the santelli exchange" that the business cycle is meant to be three to five years. well

let's get to the cme group now on a friday, rick santelli with the santelli exchange. >> well thank you, jon. being in chicago today is an odd day to gauge water cooler talk. they're talking about the bears thinking they had a dream we came back last night. they're looking at the cubs and think we're going to redefine the history of the goat. but the one topic that never gets old and never has a lack of people trying to participate on this trading floor, that's the federal reserve. harken back a bit. remember in subprime and not to pick objen ben bernanke, such a little thing, how could it make that big a difference. what i remember more that made a big difference, the whole notion of think back about adjustable rate mortgages, a.r.m.s, what happens with an a.r.m.? you pick some magic rate, short rate and every interval, maybe it's one year, whatever the short rate moves to, that becomes the reference point for the finance structure of your mortgage. now think about this, when jim bianco was on the floor with me he was my guest, we're talking off-cam remarks he brought up an interesting

cme group, rick santelli with the santelli exchange. >> a great idea on how to make this spot even moreonsider how the media firestorms and started. started with disney, but let's consider in the rear view mirror, many years of very great equity returns. one of the themes was that the fundamentals of the economy, news of the day, had little impact that there was a trajectory of stocks, as a sidebar to quantitative easing and fed zero interest rate policy, that many believe were propelling stocks. not to mention the obvious canyon move what happen do i mean by that? that we're at a certain level, crisis hit, wet down the canyon and came up to equal level versus the other side. that's a normal move. lots of commodities do it. energy marks most likely will have some pattern similar to that over the next self-years. but let's dig down deeper. so if this news over the last several days would have come out in 2011 or 2012 or 2013, the stock market maybe had more mojo less affinity to worry about nasty fundamentals, would we have seen the same response? and that leads me to the theme i started

rick santelli with the santelli exchange. >> good morning sara and good morning my guest chip dixon. before we get into issues of fed and the normalization. why don't you give me your take on what's been going on regarding china. not only the most recent news about the foreign exchange, maybe because they're trying to liberalize, timing is questionable. but the entire package of china. >> i think what's going on in china is they're having trouble making the transition they want to make. from an economy that benefitted from all the fixed investment that helped the global economy in the past decade to one that's more consumption-driven. they're not getting the same bang for the buck from the fixed investment. not getting the right kind of return. there's a lot of leverage that they're applying to it they need demand from somewhere else, i think that starts with lowering their currency, unfortunately. a lot of countries are trying that recipe. now when it comes to normalization of the fed. it's not a topic that has not gotten du

rick santelli has the santelli exchange. hi, rick. >> hi, sarah. thank you. time guest on the santelli exchange. danielle demar tee at the, adviser in a previous live to the dallas fed. thank you for taking the time, first time on, danielle. >> thanks so much for having me, rick. happy to be here. >> let's go backwards in time. gdp, any thoughts on the strength or the inventory he issues? >> something that struck me this morning about the gdp, i still see the world through the lens of a fed insider, was any kind of an excuse that they could find in the data. it bothered me to see the big diverse generals between gross gdp and gdi. when we have seen that big of diver ge ances, we tend to. >> what do you think about china? obviously, that i are lags. i think that's why the line of yesterday by our fed president of new york really struck a cord. although, he said many things, less compelling. >> less compelling, more compelling. >> less compelling. to me, the lags of anything that are going on or trying to truly handicap what i call the great recalibration, is g

but first, rick santelli, what are you watching today? >> there's a lot of people.hen you proposed to your wife, you might have gotten her a nice diamond. we're going to discuss how treasuries are as rare as diamonds. >>> coming up on the halftime show, with the home depot pop and walmart drops say about where your money will work best. star retail analyst dana tellcy breaks it down for us. and what one wall street firm thinks about some media names and it's not pretty. our call of the day and big moves in our halftime portfolio. joe terranova looks to move up the leaderboard. >>> let's get to the cme group, rick santelli with the santelli exchange. >>> you know, diamonds, anybody ever read about diamonds, the de beers organization? it was that organization that created a monopolistic scenario where rough-cut dimts were stored and i'm oversimplified and the final cut stones were held back, gauging demand. there's a couple of specials i've watched about caverns of rough-cut diamonds, industrial diamonds in russia so diamonds really aren't rare. but -- when i look at

let's get over to the cme group and rick santelli. >> before we get into the santelli exchange i likeogy, look at it with one eye or the other. but my feeling is, is that many that measure the markets, regulate the markets, policy up the markets are kind of like this when it comes to the markets, not left eye, the right eye, they're both closed. this is not an insult. i just think that i'm surprised that in steve's survey of economists, that it wasn't 17 out of 17. economists tend to be hat in hand with whatever press release comes from the fed. i think the fed officials, not all of them, but most of them don't have a market-intrinsic feel. they're not one with the markets. so this dynamic has many different alternatives. in the end, i think t.a.r.p., i think flash crashes and i think the market has a view here that doesn't seem to be in tandem with the kind of the tailors of the emperor, i think that in and of itself is going to make normalization is a bit of a roller coaster ride. i'd like to show a chart of the 30-year bond rates for the last year, 2013 to 2014, and the december fo

." >>> now let's hand it off to the cme group, rick santelli and the santelli exchange. rick? we could go into. but i want to start on one thing. one particular maturity we've talked a lot about. 30-year bonds, as i look up at the screen i see it's 292. what i want to talk about is all the santelli exchange that concentrated on how important settlement was on the long end of the market, 275 and if you look at last thursday of course close call. we basically had a couple of days, the big friday, the big monday when you had the big downgrades, the big drops in equities. for most part there's a lot to learn by the way this looked. as i'm talking to you, you look at a bigger chart on the screen a couple of months. in the end, when you see a two-year note yield that's hovering basically unchanged, and you see the other polar end of the curve, and see a 30-year bond yield holding on change and realize that most of the true financial structure trading in the belly, maybe the five-year, it speaks volumes about how 2015 is so much different than 2009 through 2014. when you look at the

rick santelli and "the santelli exchange." >> reporter: good morning, carl, i like to go into the technicalry now and again because sometimes they're pretty easy to keep things straight. they don't give you perfect trades but give investors a heads-up on very significant levels in the marketplace and while i'm talking i want you to look at four charts, year to date charts and they're very important. i'll tell you why. you see 2s there. they settle at 66. that's where they're at now. 5s, last year at 165. they're a bit under that 152.10. that's where we're stuck right now. and 30 at 275. now that you've seen those charts, how good of a heads-up they gave us. now let's first keep in mind, and there's a lot of numbers here, but don't get disturbed by that fact. the 28th and 29th were the two-day fed meeting so everything in this block, if you were a trading a had a position, an extra helping of volatility on fed days when we're talking the yield curve. what was the first maturity to go under its settlement? it was five years. what you'll find is there's a commonality that the commonality is wh

rick santelli in chicago.back to the samsung event in new york city for the latest on the company's plans. > >>> in case you missed it, nbc universal parent company of cnbc is investing 200 million in vox media. after the investment, vox will be worth over $1 billion. vox owns websites like sb nation, the verge and more recently, acquired re/code. the ceo talked about the deal on "squawk box" this morning. >> we couldn't be more excited to announce the strategic partnership. there's a financing element and there's going to be a bunch of partnership elements, too, ranging from creating great programming together. particularly video programming. to doing some cross-promotional efforts. to building some value for brand marketers, brand advertisers across our two great platforms. and then also leveraging vox media's chorus technology. which is platform that helps us build great media brands like we have over the past few years. like we're excited, we think there's a great fit. >> it's the technology, carl, that's

rick santelli, what are you looking at going into the afternoon?looking at the board for one thing, up 363 doesn't negate all of yesterday. that's why i love the two-day charts, looking at the difference between 10-year note rates and bund rates, something important going on there you should be aware of. and we're going to talk risk/reward after the break. i'm only in my 60's. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call now and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, it helps pick up some of what medicare doesn't pay. and could save you in out-of-pocket medical costs. to me, relationships matter. i've been with my doctor for 12 years. now i

over to rick santelli. rick? >> reporter: thank you, kayla.n't decide what to talk about today. i had 12 topics, 2 1/2 minutes. i'm just going to make comments about each of them, something new. one thing i've heard from many people and many people not only on the floor but our channel today, hey, the fed needs to make an announcement, to shore up the markets. my question is, why? haven't we already been through what happens when they shore up markets? qe-4, yeah, let's try that again so we can go through the withdrawal again. doesn't seem to make much sense. what about this is all going to affect the economy at-large? well, when we were moving up and many were saying the fundamentals were mismatched with the price level of the equity markets, there was very little trickle up. i suspect that it will be very much balanced in terms of not much true economic trickle down. what we will find is a way to calibrate the true value of stocks when the fed comes up with the true value of interest rates and we'll get the true value of stocks. further, man

now over to the cme for the santelli exchange. >> before we get to me and the santelli exchange, i knowttle issue, i like to stay on the little issue. when we had july cpi read and i brought it out at 8:30 eastern we definitely had numbers arguably cooler than many had thought. when i look at cpi month over month it was up .1 of a percent. the notion of this being the lowest i'm not sure. when i handicap numbers and-day it kind of for a living we've had .1, we've had .1. we've had .7. this isn't necessarily a series that was being paid most attention to. although the net change, the absolute value net change has come a long way since down .7 since january. this was the one. yes, .1 equals the lowest. in order to be the lowest. you need to be zero or lower. small detail it gives you an idea of how people look and people i mean, investors are looking at the market and some of the emails i'm reading. the word of the day is -- calibration. and whether it's china or whether it's the federal reserve, you know, lee hoskins today blamed much of the ills of the fed on communication. coach la cot

rick santelli coming a couple hours after the jobs number. >>> when we come back.wyer on a massive case that could decide the future of the sharing economy when "squawk alley" continues. e. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet? seven out of ten power outages in the us are caused by weather. but utilities can now predict where the power will go out, within a few city blocks. working with ibm, they're combining micro weather forecasts with detailed data from local sensors. to predict where outages are likely to occur. and send crews exactly where they're needed, when they're needed. ibm analytics from the internet of things is making energy smarter every day. >>> uber is involved in a massive case in california that could help determine whether drivers end up being classified as contractors or paid employees. after three

rick santelli. >>> the nasdaq well off of session lows. the nasdaq composite right now down by just .2%. we are slowly trying to get back to the green line for the session today. same goes here for the nasdaq 100 but it is as we have mentioned all hour long a day of reversals here. i'm looking at the biotech etf, it turned positive just a short time ago. making a nice move in today's session. bob mentioned the move for apple, $109.63 was the low in apple. certainly apple's reversal is helping lift the overall markets off of session lows. intel, specifically, has been up the entire session. northland securities saying it believes intel will win 50% of the new modem business that will launch in september. that stock along with the semiconductor index making some nice moves in today's session. >>> when you hear the words death and cross in the same sentence it probably raises a couple eyebrows. but the death cross is a very real thing in stock analysis and it just happened. dominic chu is here to walk us through it, what it is and why we care

let's get to chicago to the cme group, rick santelli has the santelli exchange. >> i would like to welcome lacy hunt. thanks for taking the time this wednesday morning. >> glad to be with you. >> i'm going to ask you a question that has nothing do do with markets. if you have a roof that needs repair and avoid it when do you address it? what conditions of weather probably would occur for to you address fixing that bad roof? >> well they need to be addressed immediately rather than postponed. and the reason that choicen is in problem and the u.s. is that we have too much debt, too much of the wrong type of debt. the action by the chib he's is that their debt-induced policies are faltering. now they've taken the risky maneuver of deesh appreciating their currency. which is not a wholesome development. >> i'm right with you. i think that the argument of liberalization may have many grains of truth in it like in our roof analogy. it's important when you take action. when it starts to rain and your roof starts to leak. so i think as much as liberalization may figure into this. the real issue is

rick santelli at the santelli exchange. >> thanks, david.e to welcome my buddy, john brady. 22-year veteran of the business. let's start in the chronological order of recent events. china. do you think they did very well when they started to deal with all the needs of their economy like rare earths, commodities, resources? >> absolutely not. they have hoarded commodities. there is a global glut. you hate to say it. if you look at the exposure in new york city, one of the major chinese port cities nvmt addition to the chinese economy blowing up, that maybe they are blowing up their commodity fl s supplies? >> what is the best system tole allocate scarce resources? >> the free market. >> i rest my case. they are really tinkering with some levels with regard to foreign exchange. the recalibration in my opinion is going to rattle markets for a while? your thought on trend. >> that's exactly right. not so much the devaluation but the lack of transparency by the pboc. consider how they handle policy decisions as opposed to the fed. the fed is much

we'll break down the numbers. >> first let's go to rick santelli santelli.y. >> reporter: construction spending hit their time mark. they came out at 10 eastern. they came out 110. that's the smallest month over month change since january, equaling january up one tenth. you have to go back to november to find a smaller month over month change. there is a bit of bright news in the rear-view mirror. up 1.8 is now what stands as the previous month prior to the june read. and it was originally released at up .8. the same issues as chicago. a very excitable increase in new orders but not nearly as excitable drop in order backlogs. we'll have to divide exact lib what that dynamic means moving forward as we continue to assess the economy through all the various numbers. back to you. >> the index at a three-month low. oil and other commodities reeling again today. news that china's factory output shrank now contracting at the fastest pace in two years. and joining us where a chief economist. does it appear to you as if the environment in which we're operating is cha

let's get to rick santelli in chicago. >> hello, carl. once again grading on a curve has some dangers and the handicapping of why adp number was on the weaker side and looking at how it all averages out and factoring in gdp. we do have issues regarding the fed. and that seems to be a big theme. we're already looking at interest rates and equities firming long before the data released at 8:15 eastern. look at a one-day chart of ten-year note yields and we had the outlier where we closed below on change. that has evaporated. now twos are trading above higher yield. fives are getting close to their on change. tens are over it and 30s never went below it. look at a two-day chart of bunds. the same. for the first time in a while, getting traction of higher yields and selling. open up to june 1st and you see what i mean. if we now look at the relationship between our ten-year notes and theirs and this chart, i love this chart because there's so many things going on here. but if you really want to see what's going on, look at the difference. 153

rick santelli on the cme group tracking the trade. rick? >> it's erupted. if you look at the dollar inconnection mark, i marked the market. is anybody talking about the notion? these news agencies have to get in line. we see a lot of this. we're down 20. we're down half a cent. let's look at the five-year. it was around 154 when i was on not that long ago and it's now trading down to 150 but as you look at 10s and 30s, a little volatility, but it was at 215. it's at 214. you could make a case against the long end of the market. it's now at 283. so let's summarize. you're in a blindfolded room. you have no idea how a news agency. the last thing i could think of is they're factors more of a tight new england right now. thank you very much. >> we're connell to market action. they were released early. so we've the news out there for you. the bottom line is most fed officials in ju saw conditions for a rate rise no problems. it was already down triple digits. it's down 120. oil is the big mover. we'll talk about the reactions and what it all means here on power

but first, rick santelli, what are you watching today?i'm watching the macro aspects of things like the ism, nonmanufacturing survey. what do i mean by that? why do we look at data at all, why do we look at strong data, and going to lead to stronger economic numbers or stronger growth. we're going to dig down in that simple principle, especially in light of today's blockbuster nonism. understands the life behind it. those who have served our nation. have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life. >>> tells us why he thinks the stock is selling off. where it goes from here. plus no fairy tale for disney stock today, we talk to one four-star fund manager who owns it. and what to do now. and is fitbit fit for our portfolio? we have your trade ahead of tonight's earnings, along with all of the other moves in today's action. jon we'll see you in 15 or so. >>> after labor disputes shut down many west coast ports, some of the bu

let's go to rick santelli for the santelli exchange. hi, rick. >> reporter: hi.est this wednesday morning. roman, thank you for taking the time this morning. >> thanks for having me, rick. >> reporter: roman, you write some fascinating articles. the last one i read basically equated, basically made synonymous the term ant anti-austerity with anti-market. give me some examples. >> for the past seven years ever since the financial crisis started, really, the global economy and particularly the developed economies have been managed by governments, regulators and central banks. they have used the crisis as a discretionary mandate to tamper with free market practices and specifically with the laws of supply and demand. and the debate around austerity, which has gotten harsher and harsher in the past few months, especially with the latest episode of the greek crisis, is really not about austerity in my view. the anti-austerity camp argues that austerity can hurt growth in the short term but everybody knows that. if it didn't, it would be called stimulus, and that's the

santelli. >> thanks, simon. i would like to welcome my guest, andy brenner.n. thank you for taking the time. i'm going to hit you with an unusual question big guy. how many hours a night do you sleep? how much sleep do you get? >> probably about five or six, something like that, not more. >> let's assume you are going to live to age 80 quick calculation, you are going to sleep away around 21 or 22 years of your life? does that mean that you give up sleeping? >> not at all. >> the discussion i want to have is about the dollar. a lot of stories written with very smart people. david rosenberg, we all love david rosenberg, writes some wonderful pieces does great research. dollar has moved up like the equipment of tightening 200 basis points. it is like sleeping and how much time it uses upment they have to normalize rates. is that a circular frame of reference to consider as a reason not to normalize. >> absolutely rick. what you have here is even today's claims number. that was the first time in 43 years that the claims have been under 300 for as long as they ha

let's get to rick santelli. >> reporter: hi, carl. i'll tell you what.t's a fascinating day on a number of levels. look at a two-day chart of tens. we're trading around the 216 area. that happens to be unchanged. if you look at a year to date chart, we've done work above, below that level. there's a lot of work. we're spending time on change. look at a year to date of tens minus twos. hovering around 143. there's another unique aspect. last year we settled two years at 266. we settled tens at 216. the spread sun changed at 150. there's a lot of flattening going on today with the ten-year down about 4 basis points, virtually unchanged on 2s. you get the point. we have the extremes. tens and twos unchanged. fives and 30s are a different animal but that spread probably is your best way to handicap about everything. everything should be unchanged according to fixed income markets. the bubd yields, most of the volatility held. hovering in the low 70s. not a super volatile trade right now. and maybe the most important thing to watch as we get into nonfarm and

two-year note, rick santelli, what's the demand like? >> charlie minus, c minus. 26 billion of two-year notes starting what will be 90 billion in supply when you add in fives and sevens. the yield at auction, 0.663. the bid side of the one issue market was the high yield. that was 0.665. and the offer was 0.66. so it figured in pretty nicely. there wasn't an issue there on the dutch auction pushing it to move all the supply. here's where the weakness is and what really gives it the grade a little below average. 3.16 bid to cover, $3.16, chasing every dollar, securities available. that's light at 3.41 being the average. that's the weakest since halloween of 2014. 47.1, a little above average. 10.3, indirects on the light side. 42.6% to dealers. tomorrow's five year, c minus. back to you. >> thank you very much. charlie minus there. we check out what's happening with the others with sara. >> let's look at the ten-year note yield and the 30-year yield as well after that demand which rick gave a c minus. the ten-year note yield is 10.25%. it

i know you agree with rick santelli.for the markets issed fed, but you think the window is closing. the opportunity for them here. >> all truth passes through three stages, ridiculed, opposed, third accepted being self-evident. when the fed started lowering rates in '07, the fact you could be entering deflationary was ridiculed. then you have the violent opposition, qe-3. fed stimulus did not raise expectations. everybody thought s&p was the money market with no risk. now entering the self-evident phase which is the idea maybe we are entering this deflationary scenario. look how the yield curve is flattening. gold is outperforming lumber. something we approved in an award-winning paper as negative for the economy and markets. utilities, long duration doing well. everybody talking about the fed raising rates in september. these are not signs of the fed raising rates. we should stop this discussion about the fed raising when, ask why they haven't yet. >> there is one fly in the ointment of your argument. high profile and e

let's get to the bond pits with rick santelli. >> listen, it's all about the curve.t's all about the curve. curve, curve, curve. now, remember, when it comes to trading, perception is all that counts. the perception in trader's minds, especially when it comes to the fed. nobody knows the realty. we're not starting with the ten-year. we're starting with the yield curve. if you open the chart up, flattest the curve has been since end of april of this year. it isn't a long time but it's covered a lot of ground. let's look at the numbers. we're currently at 73 in twos. up sefage. 1.53. they're up eight. settle at 2.18 on 30s. they are up three. so what we are seeing, 30-year bonds settle at 2.86. all the maturities, yields are up until you get to the 30-year bond but they're up the most in the front of the curve. that says it all. if you look at the short rate, not the currency, the fed fund futures, they describe the same dynamic. the other market to watch to give you the perception of what the fed, at least the words are falling on more risk cog any zant ears is the do

rick santelli are the santelli exchange. >> thank you.arris to talk about what's going on. i'm surprised there isn't more squawking in the upper echelons of upper institutional trade as we see the economies of scale get redefined again by the chinese. everybody manipulates their currency and played the qa game but your thoughts of china viewed in that context? >> it technically makes sense. if you looked at a dollar yuan chart, the yuan has been below the 200-day moving average for quite a while. >> so imf may look at this and said they did the right thing in. >> that's right. but i think the chinese fired a shot and i think art cashin has it right. >> he always gets it right. >> if we go back to an argument, look, everybody is banking on the chinese to become a more domestic consumer oriented -- >> the president of this country said we need to be more export driven. >> if you're going to go to a consumer-based economy, you don't depreciate your economy. this was a notice for the world. we're not the only suckers in this game. we have too

let's go to chicago to rick santel santelli. good morning, rick. >> reporter: good morning.e my special guest this morning. dr. bert. thanks for taking the time this morning. >> it's a pleasure. >> in order to trade markets, you have to understand exactly what's going on and there's a lot of conventional wisdoms but the split decision is the liberal decision split moves being done by the communist leaders to liberalize their currency so they can eventually see the yuan become a reserve currency or is the timing of what they're trying to accomplish, give us more of an insight into the growth before the crisis. your thoughts? >> well, i think, unfortunately, the chinese are learning that you can't be a little bit pregnant. they let the currency go. it then declined a little more than 2%. and they rushed right back in to stabilize it. i think the problem is, and this has been the problem with the stock market as well. they want to let the free market operation, but once it does, the free market is messy. things go up and down. and it seems like the government is not willing to

rick santelli is with us this morning. good morning, rick. >> reporter: good morning.much nailed it. ppi was a bit hotter. whether it's hot by historic standards doesn't matter. the room was cold. it's getting warmer with regard to pricing and that isn't all the pricing issues traders are looking at. they continue to look at another financial asset, the stock market. it was all about a two-year. it popped. look at that intraday chart. right back into 73ville. look at a four-year chart. any close above the 74 area are rather significant. everyone is talking about the fed. now, if we look at a two of day of the european version of our note, this gets fascinating. it's trading around minus 27 basis points. that's after it moved up from more negative yields. 73 and 27, the absolute value difference is 100-basis points. and i can't tell you how much talk that is garnering. you could also see a big pop there. we want to keep a close eye on this. the twitt30-year continues to h its settlement and all the auctions are on the downside and. two of day chart is better than a one-

let's go to chicago for the santelli exchange. >> thank you, simon.chiller and new home sales, that can only mean one thing to me, mark hansen is my guest. >> thanks very having me. >> let's look at this morning's data kay schiller new home sales. time heals all wounds, policy may make a difference. i can't say but what i can say is today's number second weakest of the year is a far cry from 1.4 million in 2005. your comments on both of the metrics. >> i don't likie looking at the peak or trough. 507,000 is not a durable recovery. you can't get through 30 minutes of financial television or any sort of online web journalism without seeing how the housing market trade is the big huge trade to carry us into the end of the year. however, that's based on historical low rates in q 1 and q 2 that surged and cut off demand. we're seeing that in the pure play. end user builder demand doing on right now. tolls suffered from the higher rates in this morning's earnings. we're getting calls wanting to know about this big housing and recovery trade. there's analogs

we have michael santoli of yahoo finance and david ellison, peter costas and rick santelli. david, give us a window into what it's like at your firm today. what are you doing amid this turmoil? >> we had inflows across the funds. generally, things are calm. i've been in this business 30 years, investing in banks that many years. it's the first time we had this turmoil where the banks aren't in trouble. the banks are the healthiest they've been in decades and the market's doing this. it's interesting to watch from that perspective the first time in my career. >> peter costa, do you see that playing out here? was it people as david indicated coming into the market? >> yeah. it was institutions came in, pushed the market higher. if it doesn't sustain it, we are in a soft phase. we could sell as quickly as we went up. if you look the way the market has been trading today, we could be flat or down 1,000 points again. it can happen either way. i don't know which, but it could happen. >> we are hearing two different perspectives from big-name investors out there. there is jeff gund

rick santelli tracking action at the cme. >> tyler, another grade where it is more defined by the tail. dog, think dog. d-plus is the demand grade. i could have gone maybe a c-double minus. just like the 10-year yesterday was soft. 16 billion. 30-year bonds, the rate at the dutch auction -- 2.88. but the high yield on the one issued market was around 286. we tailed pretty large all the rest of the dynamics are close to average. 2.26 bid to would ever. a little lighter than 10 option 2.34 average. the only thing about this that was kind of solid, slightly above 10 option average and it continues to be the one metric consistent in most auctions for foreign central banks seem to be playing directly on the light side. d-plus, 64 billion in supply hit the market. you can see yields moving up on the auction results. >>> to kate rogers with a quick "market flash." >> watching yahoo! shares surging by 5.5% on an upgrade from bernstein, the firm raised the stock to outperform from market perform saying the current share place already reflects the worst case scenario. shares are down 27% this ye

rick santelli as well. we see the gyrations today. do you think the market senses a further devaluation and what do you think of the chinese move? >> i think mark chandler had it right when he underscored that if you really want to cut to the chase on this one, the issue with china, the motivation for whether they stop short selling or the latest move to depreciate their currency, it's all about trying to find growth. you don't look for growth if you have growth. and i think the fixed income markets have been sensing this. we've gone back and forth on exactly why the flattening yield curve may not be sending the message that many of us thought, at least through historical p perspectives on what it means for the central bank, the fed in this case. it could be having a probable with global growth. if you look at five, tens and 30s, they're down basis points. recalculation, it didn't matter if this is to liberalize china, i think their timing stands out. but in the end, no matter what the reason, we're recalibrating and have less growth

. >> ben willis is with us and rick santelli is in chicago. it didn't seem like the market was expecting a rate hike. that didn't feel like a market expecting a rate increase any time soon. >> i think you're right on the dollar. >> the fact it went down is, bill, as you point the oud, doesn't fit. what does fit is the two year note at 72, closed at 66. six basis points on the week. tens are down one. and 30s are down nine basis points on the week. that type of curve flattening, short rates being higher than long rates does mean there is some type of trade there that they're nervous about a normalization. but the one caveat is we have to discern is it a passive lick dags trade or a pro active trade i think it's the former because even at 72 basis points we haven't closed above 74 in a two year which was high yield in december. if we gain more traction on investor trulyi believing they should take the shorts, but at the highest levels in recent memory and we'll look to see how that develops over next coupling weeks. >> how you are playing this m

let's get to rick santelli in chicago. >> reporter: good morning. how do you spell disproportion gnat? that's what's going on. consider. maybe it has a capitulation feel at the low. down here, here's how you define that. at noon eastern, they look at a range like today, and let's say the dow has a 1,000 point range. if it's less than ten away, they look at that as a capitulation trade. okay, the dow is down 709. what are ten-year note yields down? about nine basis points in tens. five bay si points in 30s? i think the best way is reconcile it is three weeks. it's about three weeks from this week that the fed is going to make its move. and, obviously, there's a good helping of adjustment in recalibration going on, add in china, add in foreign exchange. the dollar value is changing quick. let's start at the clues. if you take a chart ten-year minus bundle back to february, notice how many times we've talked. if you start to read 60, meaning ten-year rates drop. that's important. it's linked at the hip in the 150s for months. second clue, when we talke

rick santelli tracking the action for us at the cme. what is the demand, rick? >> really the demand grade was a b minus so definitely above average. it could have been better but it was a b, b minus. what's interesting today of course is with equities down and all the attention given to china, you don't do these things when things are coming along just great. it has implications which cause the treasuries to rally pushing down yields, maybe too much of a good thing. let's go through it. 24 billion three-year notes at the auction, 1.013. the bid side was 101.5 offer to 101, price in the middle. 3.34, a little better than the auction average, indirects 52.8, this saved the grade, best since december of '08, direct at 8.2, a bit on the weak side under the ten auction average of 12. it continues to be watching what's going on with the indirects that may give us the most clues in the future, and of course, when you consider what foreign central banks are up to, maybe it makes a whole lot of sense. tyler, back to you. >> thanks. let's go to dominic chu for a quick mar

where is santelli when we really, really need him? >>> futures of ceos of america currently being trained at harvard business schools. what are they teaching these kids? we'll talk with one of the school's deens. >>> plus, apple bouncing back today. the stock which has been pummeled in recent weeks. overall markets moving higher as well. you see that one-month move in apple. but today up almost 3.5%. we're all over all these stories when "power lunch" returns. ♪ no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great. i've got two reasons to take that's why i take meta. meta is clinically proven to help lower cholesterol. try meta today. and for a tasty heart heal

rick santelli, what are you watching? >> we're going to have to talk more about china.is time in history where we worry about japan taking over the financial community? then it became china, things have changed. today we're going to talk about china in the context of an old story with a new twist, the tortoise and the snail. resources allocating commodities, these are what markets are all about. think energy here. think about how much pain certain areas are experiencing and how much goodwill other areas are experiencing and if you can't think of that ladder, just think auto sales, you don't think they're fuelled in part by the notion that high profit of larger trucks sell much better when there's lower energy costs, they do. >> our greatest asset is their central planning. even though that's true, we're still the tortoise and they are the snail. the over compensation whether it was after the '29 crash or in the '30s, we over-compensate, we over-regulate, we exaggerate almost everything and then the pendulum has to find a new balance. which i think is going on now as we

rick santelli. you gave the two-year auction a c-minus. yesterday's fives a d-plus. what is it today? >> well, seven. it's the lucky number. we gave it a b for boy. one of the better options this week. but the volatility definitely took investor demand toll. yes, we had 29 million seven years cap and 90 million of supplies two, fives and sevens kind of the middle of the curve toward the front end. the yield at auction 1.93, which actually was the offer side for most of the last 15 minutes. the high one issued yield was 193 1/2. but it priced tied in that regard. 2.53 bid to cover meaning a little over 2 1/2 dollars chasing every dollar security available. that was the best since november of '14. a little over 50. 50.8 on indirects. kind of roughly an average. 14.2 on directs. 12 is the ten-option average. that was the best since january of '15. we gave it a b. we did get a little rally. that's very normal after supply hits. we want to continue to monitor because ten-year notes rupp 50 basis points on the week. mandy, kayla, the whole gang, back to you. >> the gang's

rick santelli standing by at the cme in chicago. we have about 30 seconds.g, unless something strikes your fancy today in the markets, rick. >> it's also equilibrium in discounts and premiums. a third china, two-thirds normalization of the fed and those two catalysts colliding. you know, i think there were premiums going up. you're going to take them going down. what do you define momentum as? richness. richness coming out. durable goods, much better than we were looking for. up 0.20. we were looking for a small negative. granted, that's a headline. last month had a positive revision from 3.4 to 4.1. let's go through the internals. we always like to take out transportation, a volatile aspect, a volatile component of durable goods. in this instance, it was. 0.3 is expected. we end up with double at 0.60. reconciling these issues with the headline being so strong, we of course have to dig down in numbers like boeing plane orders. if we look at capital goods orders, nondefense ex aircraft, not shipments, that's orders. that was a powerful number and proxy for b

rick santelli here. live in the floor of the cme with breaking news.s, 270,000, basically in line. we're splitting hairs here. last week's 267,000 remains unrevised. several weeks ago we had a 262,000 i believe. which is somewhat the low going back to the early 70s. but, if it's going back to the early '70s i wish we had the same type of labor force participation and other metrics. it's still an important issue. 2.555 million with regard to jobless claims on a continuing basis that are a week in arrears. if i look at what's going on in the marketplace post that data things are the same. dow futures up about 22 points. that doesn't represent, of course, fair value. that's futures perspective. we're still under 2.30 in terms of 10-year note yields. the scrutinized small maturity 2-year note yields flirted with 76 basis points. we haven't closed above 74 basis points solidly since 2011. maybe it's an indication that the fed fund futures don't look at percentages, keep it simple, contracts going down, that puts more of a fed tight nng play in the minds of

. >> let's go over to chicago and rick for the santelli exchange. >> reporter: thanks, simon.morning. thanks for taking the time. >> good to be here. >> reporter: listen. when i look up i see 2.18 and tens virtually unchanged on the year. i look at ten minus two, the spread. it's at the flattest since about the 27th of may. my first question is an easy one. we're all preoccupied with the date of normalization by the fed with good reason but is the recent rally in the long end flattening the curve? is it about the fed or global growth or something i'm missing? >> i think it'sless and less about the fed as the days are going on. you're seeing energy prices come down. the crb is coming down. the dollar ib dex is slowing. and we can add emerging markets to the litany of things going on in there, and maybe we are going to get a fed hike into an environment where we've had year over year pce on average going a quarter of a% in pce prices. i think the long end is telling you that inflation is leerilyclearly at bay and may come off a little bit. and if the fed decides to hike so much

to the bond market where rick santelli is tracking the sliding yields on the tenure. rick? >> absolutely. maybe even the third year is a bit more fascinating. before we even get to that, keep a couple of things in mind. the s&p virtually unchanged on the year and the only maturity that replicates that on the curve right now is a 30-year bond. where did it settle? exactly where the low yield is at 275. yes. 275 is where it's settled. let's do a chart a little before the end of last year to see all the context. all the key areas we've sliced through. it all started and ended with 275 key level. and we can take it even a step further on the derivative chain. take our ten-year minus boons to give you a relationship of how europe and u.s. rates are moving together. notice it's at the low end of the reins. the chart starts in early june. even though that's the 10 versus the 30, makes sense. if we slice through it, they think it will get smaller so you want to watch all those moving starts. listen, sara had a great piece. do we have evidence of that, we certainly do. look at this

. >> rick santelli is a big car guy.e says you might give tesla a great score but you can't drive it without charging it every night. >> you can get about 200 miles range in the car. it goes up and down depending on weather conditions. that is a drawback to the vehicle. you have to plan your schedule around the charging of the vehicle. the other electrics come at a lower price are giving you 80, 50 miles in a range. it is a paradigm shift. tesla has to be able to do more going forward. particularly when they introduce the sxv. >> did you try it? >> yes. i've driven it. it's an impressive vehicle. >> there is insane mode? >> yes. you have sport or insane. it shows if it's not fast enough be sporty, you get to go insane. >> growing up rating "consumer reports" i always felt you were the touchstone for the middle class american who wanted to make sure they were buying the right soup product and consumer electronic and reading beneath all the fancy claims to get the right product. tesla feels like such an odd one for you guy

santelli is off on a world reserve vacation. >>> a relatively calm end to what's been a wild and memorableeek. we have your game plan for next week with only the nasdaq positive right now. >>> plus, what are individual investors buying and selling in this volatile market? td ameritrade's ceo knows and he'll join us in a little bit. >>> the next hour has been a major turning point for the market all week. we'll get you the key levels you need to watch heading into the close. >>> "power lunch" will be back in two. like your natural teeth. but, when you eat tough food, the denture moves. oh no! this shouldn't happen. try fixodent plus adhesives. their superior hold helps your denture work more like natural teeth. and you can eat even tough food. fixodent. strong more like natural teeth. fixodent and forget it. no sixth grader's ever sat with but your jansport backpack is permission to park it wherever you please. hey. that's that new gear feeling. this week, these folders just one cent. office depot officemax. gear up for school. gear up for great. >>> hello, everyone, i'm sue herera. here is

rick santelli is tracking the action as always. rick?> maybe the best way to know what's going on today is to look at a chart of s&p 500 futures over 30-year bond deals. you see the failure to hold above settlement in the s&ps dragging down on this last move, flattening out any move in rates where it looked like we were going to see some selling pushing rates up to the higher end of the range. let's stick with that 30-year. if you look at the two-day, what's interesting here is a couple of issues. first of all, how it's toying with yesterday's highs and indeed how it's been in a narrow range. open the chart up before christmas of last year. you can see why we're spending so much time here. keep in mind, 2.83, 2.84 friday. we're splitting the difference. not only are we holding settlement at 2.75 in the 30s, also settlement for 2014. ideaing >>> stocks under pressure today. check out the dow over the past one month. it is down about 3%. should you buy at these levels on these little dips we've been having? we've got some four star large c

. >> rick santelli is on holiday, but we do still have a bond report. the price is moving higher. the farther out the curve you go, the greater the price gains, the more the yields are falling. look at the ten-year at 2.04%. earlier it was 2.03, and on the 30 at 2.73, almost 2.74%. money moving in to the relative safety of the bond market. mandy? >> okay. thank you. european stock markets plunging on more china fears. the stoxx nearing correction territory down nearly 3% and on course for the biggest weekly loss since december of last year. the dax, ftse all in the red in overnight trade. in fact, the french craac is al down. >>> the european fund is up 27% since 2013. katrina, welcome to "power lunch," thank you for joining us on a very interesting market day. are you seeing this as an opportunity for an example to accumulate or buy or kind of like catching a falling knife? >> a lot of different concerns. we have growth concern in united states. in europe we've got a bit of a different situation. we have a market that hasn't grown, an economy that's been very slow growth. as we l

rick santelli is tracking the action. >> is you're spot-on, simon.definitely a lot of big movement going on, not only on treasuries but within treasuries on the yield curve. notice what's happening in the real five-year sector. this is kind of the belly of finance. look at the intraday 5s. under pressure. we haven't been here since starting in june. really since the end of july -- i'm sorry, early july. the 10-year hasn't been here since the end of may as you see on the may 1st chart. the most fascinating maturity according to traders is the 30-year bond because the 5s, 2s, 10s are all at or lower than they settled 2014 except for the 30-year bond. settled at 2.75. it is currently ten basis points higher. this is something traders are looking at. they want to see if it can hold that year-end level. the two-day of the dollar index shows us maybe today isn't about the fed as much as it is about what simon mentioned, global economics. simon? back to you. >> thank you very much, rick. >>> to dom chu with a "market flash." >> let's call your attention to