Transcripts For CNBC Closing Bell 20240622

Time hour. Came out 20 minutes earlier than anticipated. It showed no clear sign of whether the fed would hike rates in september. We have Steve Liesman standing by to break down that data for us coming up. You know, i was going to say, these are two sides of the same coin in a way. Speaking of breaking down, take a look at oil, its down more than 4 today, its trading below 41 a barrel. Were watching to see if it punches through that 40 mark. Look how close it is right now. 40. 62. And the september wti contract, down almost 5 on the session. Again, were looking at lows since march of 2009. Weve got a top commodities trader to discuss whether a floor is in sight. And, of course, all of this feeds into what will the fed do . What is inflation going to do in this country . Always interrelated. Thats for sure. Meantime, 1 trillion, thats how much money has come out of emerging markets over the last 13 months. Were going to discuss whether you should be following that herd or maybe take a risk in the developing markets. Thats a lot of money. A lot of zeros. Its a lot of zeros. And 11 years ago today, speaking of a lot of zeros, google went public, the stock p up well, we should say 1,500 since then. Weve got a stock brawl now on whether google is still a buy after an epic run like that. Were also going to look at other stocks that came public the same year in 2004. And as good a performance as google put in, theres at least one other stock that has done better that came out that same year. Its kind of like wine, i suppose, you know, if you get how is it like wine . You know, people talk about years for wines or a whiskey or something. Yes. Does it work that way for whiskey . No, the longer you go, the better it is. It was a good year, good crop. It was a good crop. Details on todays crude oil. Jackie deangeles. We did see a more than 4 slip. Let met be clear. We are watching september wti trading right now. It closed at 41. But october is seeing more volume. Wither going to see futures expiration in september tomorrow after the close. October closing at 41. 27. But no matter how you slice it. We saw fresh, 6 1 2year lows now. And that is significant when it comes to oil prices. Traders telling me, when you test these lows, test them the one day and the next couple of days is when we break down through them. We saw a bearish report showing an inventory build of 2. 6 million barrels. The concern here is that were going to continue to see these inventory builds, especially as we head into the fall and u. S. Demand starts to drop off. I will say that there are two caveats here. I want to hedge a little bit. Possible things that could take us higher. We did see a weaker dollar after the minutes came out. If we see a dollar go lower, that could add a little support for crude prices. And also, watching Tropical Storm danny. Maybe 2 or 3 days out of the gulf coast potentially and people are looking at it, possibly to turn to hurricane status. So that is something to keep an eye on. Not an imminent threat at this point, but, of course, that could send prices higher, as well. The related story were following. Lets put it back on the screen. Down 5. 5 today. And in the cpi, the Consumer Price index this morning, looks like with a 25 drop in gasoline prices, if it ever materializes, headline inflation will be a negative territory again. Jackie, what does it look like is going to happen with prices at the pump here . Well, looks like, if you look at the gasoline contract, i will say this, we saw a very steep decline today. Most traders telling me, were probably oversold. But probably whats going to happen that balance of demand i said is going to come off as we head into the fall season. Were going to see refineries start to switch to their cheaper winter blend of gasoline. You are going to see prices at the pump come down. And youre going to see them come down dramatically. Weve been talking about refinery disturbances in the midwest. Those are starting to work themselves out. And refineries in other places are starting to come back online. Theres a little bit less concern about those issues at this point. But, you know, to answer your question simply, prices at the pump are going to go down. Yes. Hear that . Thank you, jackie. Thanks, jackie. See you later. So Steve Liesman has been combing through the fed minutes, which were released earlier than expected by another news organization. Inadvertently. Tell us about what you read in those minutes today. I want to talk about what i read but also what the market read. Its a controversial and confusing set of minutes for the july meeting, coming out in which the markets saw them as dovish. Indicating less of a chance of a first rate hike. But some observers see them as neutral or slightly hawkish. He goes on to say that they do lean. Govish. And gich given whats happened, they lean more dovish. Most judge the conditions for a rate hike had not been achieved. But they were approaching. Some say the conditions for a hike had either been met or will be met shortly. It was a prompt start to a normalization was seen conveying confidence in the economy. Some said the inflation data was not progressing. They did revise the inflation outlook. Some participants saw a downward risk, Commodity Prices and the dollar. But most saw the energy and dollar effects as temporary. Now, also discussion about spillover from china. Quote, raising some concerns, the chinese market, however, was seen having little impact on chinese growth. The big issue was this, a material chinese economic slowdown as posing risk for the u. S. Outlook. Heres some of the commentary we got over at pantheon, they said providing the august labor data arent disastrous and markets are not in disarray at the time of the meeting. We expect the fed to move. And at bmo, we lean toward a september move, but with little conviction. I think theres a lot of that today. Maybe little conviction on one side. The stock market go back to where it was. But the twoyear, its held on to the gains there, the yields falling fast. You know, to me, 70s been a barometer for where indicating that the twoyear note thought there would be a rate hike in september. Thats fallen down now to 65. So those gains in the bond market or those decline in yields, guys, seem to have held on. Steve, real quick, is goldman looking for a december hike . I did not get a post fomc commentary note from goldman yet. Yeah. But if you want, kelly, i can email that to you and you can get that on television. We love it, thank you, steve. Thank you, steve. And, an important job on wall street that still thinks, you know, now bill dudley came from goldman, et cetera. The drop was incredible today. The drop in the yield curve was steeper. Lets talk about it in our closing bell exchange. And Rick Santelli in chicago. Jack, im going to start with you, you posted an oped piece on our website at cnbc. Com where essentially youre saying janet yellen needs to take a victory lap. What do you mean . Yep. And, you know, look, i think the time has come. And, you know what, i want rick to brace himself. Okay. Its about time we thank the fed for what they have done. They have actually led us off of the edge of the cliff. Weve seen them come out time and time again, telling us what they are doing is right. And guess what, theyve been absolutely right. We didnt see any hyper inflation. A Federal Reserve of a good grasp of what was going on. They can start to lift off. And they dont have to go big. They p dont have to go a quarter point. They can go ten basis points, if they want. Weve been watching your response as jack was talking. What would your headline by on cnbc. Com if you wrote one . Is that the only honesty in a marketplace is when traders are presented with a condition they need to deal with in realtime they didnt expect. Okay. Like the flash crash on october 15th. Gave you boat loads of information. Told you where the tenyear note would settle at year end. Those 50 minutes made a big difference. What did traders do . They bought euros, pounds, swiss francs. They bought fed funds. Does that sound like a bunch of investors who think the feds going to raise rates . That sounds like you can talk about victory laps. Im not talking about victory laps, im talking about the market. You can say that may be true, but the policies deliver us 3. 5 growth. They gave us the new normal and a big Balance Sheet to boot. No, let me get a headline in here. No, youre not going to get 4 growth unless youve got congress and the Federal Reserve working together. You guys, no, no, no, no. Heres the headline. Hang on, hang on, keith, go ahead, whats your headline . Heres the headline. Yellen still hasnt got a clue what to do. Traders are making decisions with real money, not academic models. The middle class remains trapped, under pressure for wages. Housing market is a wreck. Theres still opportunity out there but to argue the fed has been successful when fed missed the recovery and still missing the boat with regard to rates. Theres no way she deserves a victory lap. When you talk about housing, how can you say its in complete disarray . Youve got housing coming back, its as strong as its been in years. Youre talking about come on, weve got cash and loans. Youre talking about a jobs market thats come a long way, and youre talking about a twohorse wagon being pulled by one horse. And that is the fed. When you have a its half a horse. When you have a lack of progrowth policies coming of d. C. , out of our legislators, you only have one course of action, and that is the fact they have done a magnificent job. And thats why she should take that victory lap and raise the rates by 10 basis points, start that liftoff. Love you, jack, but no time. Theyre the enablers. Okay. Everything he said about congress is true, okay. Exactly. And if you give your kid everything you want youre the enabler of their bad behavior. They are the vanguard of the system, rick, and they have a mandate hang on, guys. Last word to keith. Ha go ahead, keith. The fed is the poster child for mismanagement. Theres going to be you know what to pay, its not going to be pretty. I hope its not tomorrow. Weve been hearing that for years, keith. I know, but you know, with made plenty of money in the interim. Weve got to go. Thanks, guys. As always, to hear more from jack, log on to cnbc. To read his piece entitled chair yellen, please take your victory lap. I still would love to hear what ricks headline would be. Theres still opportunity. The dow is down 150 points at this moment. Actually, thats not even near the lows of the session. Were down more than 220 points. A lot of thats swirling around the moves in the oil price. And let me tell you what, keep an eye on oil, were about to maybe today, maybe soon break that 40 a barrel mark. And you can imagine well have plenty of headlines following on that. People trying to find investments for. Much more ahead on market swings and if you should be buying these dips. Why he thinks were heading for a correction this fall. Yeah, it is only summertime but a momentous market going on right now. Google shares surging more than 1,500 since going public 11 years ago in 2004. Two top google watchers will make the bull and the bear case for the search giants next 11 years when we come back. Itll be fun coming up. 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Plus, helpful advice from the sleep experts. Dont miss mattress price wars at sleep train. Sleep train your ticket to a better nights sleep. Volatility returns today as the markets try to make sense of sharply Lower Oil Prices because of a build, a surprising build in oil stocks and as always, trying to make sense of the fed and the latest release of their minutes. There is our favorite sector indicator there, kelly. And todays a perfect example why. If youre trying to figure out, what is this market doing . Utilities the only sector in the green right now. And what do they love . A lowrate environment. The fed might not have been explicit theyre not going to go in september, but you add in the conditions weve seen and the open door, which they might have left in those minutes, and this is the outcome youre getting. Energy, the worst performer of financials right in the middle of going one way or the other. Lets check in with bob pisani. Lets do it. Closer look at the tech stocks coming off todays lows, bob. Yeah, and very mixed quarter for techs. Id show you the longer term. Techs are as confused as everybody else. Look at the big tech etfs. Important thing here, we were down on the day, semiconductors weak again. And we rallied on what was perceived to be dovish fomc statement and then we come all the way, essentially back down to where weve heard before the fomc minutes were leaked here. But overall, very mixed quarter here. So, for example here, one sector having a tough time has been semiconductor stocks. Ever since june, semiconductors have had a very, very difficult time. Look at the sxd, thats what you want to look at, the big etf for semiconductors. Cell phone sales, computer sales. Look at that decline in the semiconductor etf. Its broader than that. Social media stocks are not generally that pegged to china with a few exceptions. And theyve had a very mixed quarter. Google had great numbers. Facebook had great numbers, social media, those two big names in the Third Quarter have done well. But put up the board, youll see here some of the names and that overall here. So linked in and yahoo and twitter have all been down in this quarter. Groupons been down. Bottom line is, its been a mixed quarter overall. And these stocks generally dont have exposure to china. Finally, traditional tech, same story here, mixed situation, cgate and microsoft are on the upside. Cisco, intel and i bm all on th downside. Thank you very much. I just read this. 11 years ago today is when google came public. I can believe it. Its 11 years. Wow, stock priced at 85 a share. It rose 18 on its first day, was the fourth largest ipo of the year, wasnt the biggest one, and i remember it well, everybody said, oh, its overpriced, overvalued and i remember distinctly cramer pounding the table saying this stock is going places. Get into this thing as soon as you can. Now, over the last 11 years as you see there on the split adjusted basis, googles stock is up more than 1,500 . Should investors hold on to this stock for another 11 years . Lets brawl it out. Max wolf here from manhattan venture partners. Max, youre our bowl. Why is google a good investment for the next decade . Because this company is big, has a lot of cash, knows how to manage, knows its brand, everyone knows this brand. They Touch Everything in the universe and they still have a lot of what the best startups have. They have the established and the startup, great energy, great brand, lots of talent. Hard to bet against these guys. Ross, im confused. Youre a long timeshare holder of google, and we have you down as the bear. Whats going on here . Im the bear if i watch another one of these robots runnirun ing through the woods, im going to kill myself. Theyre surfing in venice, playing with their dogs, enjoying being the next microsoft. And theyve got their eye off the ball. The ball is search, its mobile and social media, and theyre getting wiped off the iphones right now and theyre becoming completely irrelevant in social media. And 80 of search is on mobile devices. So many issues to deal with and theyre out surfing today. Ive got a huge tax problem if i do that. I think theres upside right now maybe shortterm, but youre saying the next 11 years and the future is facebook. Facebook is google 11 years ago. You need to make the rotation into the future not the past. A good tax adviser is what you need. I dont need a good tax adviser, i have to pay 30 . If i sell it, is it going to go down 30 , i dont think so. The idea theyre creating this company to put under one umbrella the many far flung things that larry and sergei have gotten into in the last 11 years, theyve lost focus on what theyre all about. God forbid we look back and our biggest complaint is we like something we wouldnt sell. But the thing we have a big Tax Liability because weve done so well. That being said, the future of search. And thats the sort of curse you would only do to your closest loved one. But that notwithstanding, right . The truth is, i think that the new Organization Makes sense because theyre going to be a little more of a conglomerate. I think that makes sense because of the brand, the cash on the book, who they are and the distribution. But i also think that the futures not as social. I think mobiles huge, i think health cares huge, i think financial attacking the banks is huge. And i dont see a future for those things without google front and center. In part because theyre still the operating system on 75 of the mobile smartphones in the world and youtube is about to get monetized. I think what theyre going to do in health care is huge. I think the internet of things is huge. I think the driverless car is huge. And you know they all have in common, alphabet, alphabet, alphabet. All right. And losing money, losing money, losing money. Money losing businesses. Today, some of them lose money. Youtube is close to breakeven. I think health care is close to 20 of gdp. Makes sense period. A lot of money made in health care. Look, were friends. I can say this. I think its a little disingenuous of you to say youre not selling because you have a tax problem. In your heart of hearts, you think this stocks going some place, dont you . Come on. What i think is that google on the shortterm has a monopoly on search. And we spend a lot of money on google, still, and its just like microsoft with their operating system revenue. So i like the core business. I love youtube, i would be focused 100 on youtube right now and monetizing that in a much more effective manner. The problem i have is when executives who dont have any criticism because of an unfair share of voting class situation. So nobody can criticize them, really. They can do whatever they want. Theyre all going to be in burning man next week doing what they want to do while im working. And they need to focus on their business. And i hope they come up with more spaceships and whatever else theyre working on. I like when management is focused. Thats why i like apple, thats why i like facebook right now, and ive got to think about the next ten years. Having a big gain. I had a big gain in whole foods and i finally dumped it because i paid the taxes and i was like, they are so off track and at some point, googles not there. Google still has a little bit of time. Ross is in a stream of consciousness mood right now. Listen, before we let you go. We mentioned earlier as strong a performance as this stock has had in the 11 years its been publicly traded, up 1,500 , its not the best performer. Were giving it away now. I was going to ask you guys if you had any idea who performed better than google at that time. I dont know if youve got a monitor in front of you. Apple has, actually, according to the stocks that came public in 2004. That year. I forgot to mention that part. Max, who do you think is tops . Well, i wouldnt really actually know it. But i think that there are very few things you could have bought instead of those shares and held that you would still be excited about now, which is what were talking about. Well, the answer is of the stocks that came public in 2004, salesforce. Com is the best performer, up 2,500 . Great company, too. Yeah, great company, as well. You own that one, ross . Sales force i dont own but mostly because of the valuation, but i love the company. You would have had a bigger tax problem . Yes, thats for sure. Lots of tax problems. Theyre very happy about that. Thanks, guys, appreciate very much. Max wolf and ross gerber. Companies generally speaking that have outperformed google do include apple as ross was saying. Netflix price line obviously, regeneron, amazon, as well, gilead, a couple of biotech names in there and gncr. Our thanks for that. Yes, the historic edition of closing bell continues now as we continue to look back 11 years. The dow is down 134 points right now with 35 minutes left in the trading session. But, hey, anything can happen in 35 minutes. Yes, it can. And coming up, a wall street veteran saying watch out for a correction. This fall, thats a 10 drop, we havent seen one in several years. Find out how low he thinks the s p could go. The challenges of keeping everyone working together can quickly become the only thing you think about. Thats where at t can help. At t has the tools and the network you need, to make working as one easier than ever. Virtually anywhere. Leaving you free to focus on what matters most. Thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by Unitedhealthcare Insurance Company. Like all standardized Medicare Supplement insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. Join the millions who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. And provided by Unitedhealthcare Insurance Company, which has over 30 years of experience behind it. With all the good years ahead, look for the experience and commitment to go the distance with you. Call now to request your free decision guide. Welcome back. Speaking of corrections and bear markets, the top 25 energy etfs are all in bear market territory, that means theyre down more than 20 from their highs. The oil price we know is well below those levels. Heres a quick look at the four worst performers of that bumplg. Again, down more than 20 from the 512week highs. They include first trust, power shares, s p energy index. Spider index, as well, theres a Canadian Energy one. And all of those getting hit hard, down between 3 and 4 as oil is back in the lowest levels since 2009, potentially going to plummet that 40 mark. And thats on the september contract expiring tomorrow. The october contract is still around 41 and change. So were watching two different prices there. Lets bring in james of optionsellers. Com who thinks crude could hit 30 a barrel before year end. Why . I guess its mainly about supply and demand at this point, right . It certainly is, bill. Looking at these numbers, these Energy Companies. I like to say this could be an odd time for Energy Prices to stop falling. The end of august is the unofficial end of driving season. Were going into a season that many talk about. The smallest amount of demand in the United States happens from september through november, and at that exact same time, saudi arabia is picking quite a fight flooding the market with the largest production in exports that weve ever seen. You know, so i wonder if this being the case, you know, 30 a barrel wouldve sounded like a crazy target back in january. Now, it seems like, you know, go ahead and stick your neck out. How much further could we go . Why just 30 . Why stop at 30 and not go lower . At 30, were going to see a lot of production problems and financing problems here in the United States. When financing came around and needed to be rolled over this spring, we had a nice rally up to near 60. A lot of the banks jumped in and got into the oil business. As we approach 36 and then 34 this fall, were going to start seeing some major problems in that industry. And the key right now is saudi arabia pushing the market down, basically picking a fight with drillers in the United States. If iran comes on, thats what brings us down to 30. 36, 34 is a good support level. And were at an interesting point right now. Typically, youre right, when prices would go lower, you would see producers cutting back on production. But thats the opposite is happening right now in part, sometimes those producers. Theyve started borrowing money right now to make up the difference, right . Thats exactly right. Some producers right now are drilling and producing oil because they need to. To get some Energy Producers out of the market. We see october and november as an interesting time frame. Deep into the 30s. And i think at that point, were going to see some demand destruction, should i say production disruption and at that time, were going to have probably some Energy Companies bailing here in the United States and possibly november, december nice low in the market. We only have two refineries left in this country. At some point, it should. We wont hold our breaths, but this is where push comes to shove. Thank you so much, really appreciate it, james, for joining us here this afternoon. We are discussing on twitter oil prices being so low, joking, you know, heres what we love, one viewer, oracle of wall street writing oil prices are so low, that if jed clampet found oil today, he wouldnt be able to move to beverly hills. Keep them coming, everybody. The best viewers out there. Time now for a cnbc news update. Lets get out to sue herrera. And heres whats happening at this hour. A michigan prosecutor has declined to charge an immigration and Customs Enforcement agent in the Fatal Shooting of terrence kellam. That shooting occurred in april. The prosecutor saying the investigation shows that i. C. E. Officer Mitchell Quinn acted in selfdefense. New research by nasa shows vast areas of californias Central Valley are sinking faster than previous thought as massive amounts of ground water are pumped during the historic drought. The sinking land has seen costly damage to canals that deliver water throughout california. Regal entertainment group, which owns hundreds of Movie Theaters across the u. S. Will now search bags and backpacks as customers enter the building. The move comes in light of recently violence in Movie Theaters in louisiana and tennessee. Mexican authorities torching more than 75 tons of elicit drugs in the border city of tijuana. They say the drugs had a market value of more than 120 million. Mexicos attorney general was joined by military officials for that burning. Youre up to date. Thats the news update at this hour, guys. Back to you, cnn hour. All right. Thanks, sue. Different story than were used to seeing when theres a fire on screen. Theyre burning the drugs. That was incredible. Wow. Isnt that dangerous . Depends on the drug, yeah. Some are highly flammable and you dont want to do that. Yeah. 25 minutes to go into the close. I wonder how far away people were. The dow is down 129 points. Still trying to make sense of what were mixed set of minutes from the Federal Reserve here. The s p down 13, nasdaq 28. Typically, two different responses to those minutes today. Up next, a top trader will tell us what hes watching the final and most important half hour of the trading day of what has been a crazy day. Hes even bringing charts with him and going to draw pretty pictures of the charts when we come back. And the incredible rush of the mercedesbenz youve always wanted. But you better get here fast. Yay, daddys here here you go, honey. Thank you. Because a good thing like this phew wont last forever. See your authorized dealer for an incredible offer on the exhilarating c300 sport sedan. But hurry, offers end august 31st. Share your summer moments in your mercedesbenz with us. Thankshow may i help you . S list. I heard i could call angies list if i needed work done around my house at a fair price. You heard right, just tell us what you need done and well find a top rated provider to take care of it. So i could get a faulty light switch fixed . Yup or have a guy refinish my floors . Absolutely or send someone out to groom my pookie . Pookies what you call your . My dog. Yes, we can do that. Real help from real people. Come see what the new angies list can do for you. Bring us your aching and sleep deprived. Bring us those who want to feel well rested. Aleve pm. The only one to combine a sleep aid. Plus the 12 hour pain relieving strength of aleve. Be a morning person again, with aleve pm. Welcome back, everyone is trying to figure out whats moving the market. Steve grasso with a look, sir, at some levels that might be responsible. Exactly. So if they pull up these technicals in just a second, ill show you. The biggest level were watching as floor traders, traders, being a part of wall street is the 200day moving average. If you look back here thats the purple exactly. The whole ebola scare back in october of last year. Okay. So if you bounce this across. Theres a couple events that happen right here. We only close below the 200day moving average. One of those days. Now, if you see this break here, not a long time ago last week. You wound up testing that level of 2050 in the s p cash. So all eyes on that 200day moving average, currently 2078. Sitting a couple of points. Close to right on that level. Do we need to see this blue line . This 50 oh you need the silver line. So you have the 50, the 100 and the 200. What is important to hear is this rolling over of that shorter term moving average. And its collapsing on that longer term moving average. So currently the 50day moving average is below the 100. Thats a negative sign bearish for the overall market. You want to see this market stay above here. Okay. I dont think its going to do it for much longer. I dont think thats sustainable. S p cash. Watch it, we will. Thank you very much. Bill . All right, thank you all. Now, we are also watching heavy volume overseas, especially in the emerging markets. The Financial Times highlighting the huge amount of outflows from the emerging markets. 1 trillion leaving that group over the past 13 months. Thats almost double the outflows we saw during the financial crisis. So lets follow that money. Joining us now is chief investment strategist whose new book is called my side of the street. Thats a lot of money. A lot of outflows. Its a lot of money. What did you make of it . Thats why i think a lot of this talk about china, perhaps being a reserve currency in the, i guess, in the figurative sense and also the literal sense, a lot of that was misplaced. I think its hard enough to have the yuan be a reserve currency within china itself. Youre seeing a lot of locals that have amassed a certain amount of wealth want to be in harder, quote unquote, harder currencies. I would imagine, bill, that would continue. It seems like a rational approach. It is a rational approach if you developed some wealth. And i think more is probably going to come out. Heres the interesting question. People are starting to look at the drops in currencies, the deteriorating fundamentals, the high level of dollar denominated debt. And are we setting ourselves up for a financial crisis in this part of the world . I dont know if itll be as deep as the one you saw in 97. A lot of the countries have stronger reserves, higher reserves. By the same tone, though, there are things that are eerily similar about it. And youve also had, i guess, a lot of financial innovation, which has allowed a lot of people to invest in these markets that wouldnt have invested it through etfs that wouldnt have done so in the past. Are you joining the flight from the emerging markets . Im swimming upstream. I would, theres a Strong Negative correlation between the dollar and emerging market equities. From here, i think the fed, while the fed is going to probably proceed very slowly, we think theyre very likely to tighten. Some point before the end of the year. Thats a tightening of financial conditions. And thats going to hurt, in my view, a high beta trade. So im not only somewhat nervous about the emerging markets, frankly, im a little bit nervous from a shortterm perspective on the u. S. Market. Real quick. If the fed delays the decision until december or the first part of next year and we have a nice rally as a result, does that just buy time . Or does that mean theres a reason why investors should then get back involved . Kelly, my own view, my own inclination is to think you want to be cautious until the fed tightens. I think you have a lot of uncertainty surrounding what the fed is going to do. You dont have clear cut signals that the u. S. Economy is strengthening. And its i think, markets going to have a hard time digesting a lot of moving parts in the interim. Well leave it there. Thank you very much. Sweaty palms right now. Good luck with the book. Thank you, sir. My side of the street. All right. Were looking at about 18 minutes to go into the close dow down 133. After the fed minutes, and interestingly enough, as we were talking about, the fed minutes come out, the dollar goes lower, does nothing to give commodities a bid. Oil down significantly again, today. You know, the permanent wealth loss created during the Great Recession in 2008 did change consumer habits. Courtney reagan standing by with details on the new necessities. Youll find this very interesting and a change in consumer habits. Coming up. Youre watching cnbc first in business worldwide. Hi my names josh. Kelly. My name is raph. Steve. My name is anne. Tom. Brian. Krystal. And i am definitely not a robot. Im one of the real live attorneys you can talk to through legalzoom. Whether its for your business or your personal life, dont let unanswered legal questions hold you up. Because were here. Were here, were here, and weve got your back. Legalzoom. Legal help is here. No students ever been the king of the campus on day one. But youre armed with a roomy new jansport backpack, a powerful new dell 2in1 laptop, and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats 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. Welcome back. The Great Recession. May finally be over. But the effects and impact are still being felt today. Sure are. So nowhere is that more evident than in the attitude and psychey of the american consumer. Studying very Interesting Data about changing consumer habits. She joins us now with some of that story. It makes sense. Weve talked about it before. Theres just something about watching retirement accounts plummet. And american institutions go bust. Its evident in spending and saving patterns even if consumers dont realize how theyve changed over recent years. We are saving more as you can see here, the savings rate has increased. And were buying less discretionary stuff. Making memories, things that cant be ripped away over night. And if we take a look at the categories, were not spending on clothes, like we were a decade ago. Its evident in the numbers. But consumers are favoring big ticket and experimental spending on categories like home improvement, autos and travel. All of those outpacing retail sales when it comes to a percentage basis, of course. And weve added new necessities to our monthly expenses. Government data shows that spending on Cell Phone Service and Internet Access have increased more over the last decade than the decrease in spending on land lines, Recreational Activities has grown, too. Membership clubs and sports centers. In that category, only Movie Theater spending has fallen. That kind of explains our shift to streaming. 40 of american households subscribe to a Video Streaming Service these new necessities take up our time, too. Leaving less available to hanging out at the mall. But mastercard says that consumers are adjusted budgets to new necessities as an expense. And the data doesnt support its taking dollar share from other areas like clothing. Kelly . Listen, its great to emphasize that. If people get in trouble. Theyre spending on a vacation instead of a couch, its still going to be a reckoning moment at some point. And clothes are overrated. Clothes are important. Definitely dont spend 4,000. Were looking at a changing market. If we stay here, were going out with declines. The dows down 120, the nasdaq 27. So todays selloff and the market comeback and the ensuing fallback, certainly shook up what was supposed to be a slow summer day. The senior Portfolio Manager at the funds, we may have to get used to days like this because we are a due for a modest correction. Hell make the case when we come back after this. Innovating. T td amere and apparently, they also love stickers. Whats up with these things, victor . We decided to give ourselves stickers for each feature we release. We read about 10,000 suggestions a week to create features that as traders wed want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. Who reads all those . He does. For all the confidence you need. Td ameritrade. You got this. Tsummer event is here. Now get the unmistakable thrill and the incredible rush of the mercedesbenz youve always wanted. But you better get here fast. Yay, daddys here here you go, honey. Thank you. Because a good thing like this phew wont last forever. See your authorized dealer for an incredible offer on the exhilarating c300 sport sedan. But hurry, offers end august 31st. Share your summer moments in your mercedesbenz with us. Okay. About eight minutes left in the trading session. Joining us with his view. We were just talking about among other things, Currency Debasement in this market. Hes in our building. Who runs our gold fund is really the expert within our firm. Gold does have a place in portfolios, some people consider it insurance. Insurance for the kind of debacle he was talking about. But it is a currency in its own thats valuable and portable. If you meet somebody from argentina, thailand, russia, who has watched their own currency evaporate overnight but gold held its value, they are the strongest believers in gold. You know you can spend a lot of u. S. Dollars. Thats correct. To some extent, you can go there and wink and nod and say you can pay in dollars instead of our currency, too. For somebody in this country who hears the gloom and doom talk and still thinks how do i invest, what are your top picks for people who want to keep it here and do the right, the safe thing. We do manage u. S. Equities. We have 2 billion in gold. So we are compelled, really, while Interest Rates are at such low levels to be invested in u. S. Equities. And in that area, were looking at consumer items. We moved away from some Health Care Items and moving into stocks like mcdonalds selling hamburgers. Were looking at solar equipment manufacturers, railroads. Things that are very basic, tangible businesses. Our selling at low valuation. Because, once again, our clients are pension funds, people who want to keep their money over a long period of time. We have to be derisking the portfolio almost on a daily basis, still in the equity market. People talking about dividends, again. Is that a factor in what you buy . Its not a determining factor, but clearly, if we can provide yield for our clients who are searching for that in every other area, its a plus. Not every stock has a yield, though. Its not a determining factor. Just because you mentioned mcdonalds. Earlier one of the names in the green, actually, and theyve been through a rough patch. Are there any related investments you make . Or is it because they were beaten down . Theyve had a tenyear run. I dont know if you remember the movie super size me, that was in 2004. Two young women decided they were going to sue them and had an avalanche of bad news. In an environment where five guys, shake shack and americans havent stopped eating hamburgers and probably all know a group of vagans doing their yoga. Theres a huge turn around story there in the menu, management, real estate. Are you an egg mcmuffin at night kind of guy . No, ive been trying to go the other way. Thank you so much for joining us. Somebody making the rare case for mcdonalds these days. See you later. Well come back. We have the closing countdown for this wednesday. After the bell, well look at which Oil Companies could be takeover targets after the big plunge in crude. Youre watching cnbc first in business worldwide. So youre a Small Business expert from at t . Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep it all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberry apple scones smell about done. Ahh, youre good. I like to bake. Add new Business Services with at t and get up to 500 in total savings. All right. 2 1 2 minutes before the close, bob pisani and i have been both standing here patiently for the segment to start, havent we, bob. Some volatility today, two things, oil, pushing it lower, and then we have the minutes of the fed coming out, and here was the response. You know, we were down about 230 points at the low of the day for the Dow Jones Industrial average. Comes back, briefly turned positive. And then fell back again. Down 135 right now. What were the other markets doing over that same period of time . The tenyear yield. Saw a move, as well, we saw a steeping of the yield curve in part because the shortterm yields were going lower. But we also saw the same thing for the tenyear. Its down to 212 at this point down 7 basis points, and the dollar softened a bit, as well. The dollar index now down. 65 for the day at 9641. Thats what the fed minutes did. Oil, what did it do today . It continued lower. And inventories when they were expecting a decline. And when that inventory report came out, it was down sharply and finishing. Right now down 2. 05 at 40. 57 on that contract. A onetwo punch day for the markets. And this is without the fed minutes being released early. We were weak on china concerns early on. And then 10 30, another icing on the cake. The xle, it was another capitulation day. This is the energy etf. A lot of people keep trying to buy it. It was another heartbreaker. This is an intraday. And right here, volumes picked up dramatically here. We had a huge volume day. This has happened six or seven times this year. All of a sudden, they try to buy it, it doesnt work, a few weeks later, they sell it dramatically. Ill bet you xle will be up tomorrow and stabilized for the next two weeks, and then theyll try to buy them, again. Its a heartbreaker, like groundhog day but commodities every day. Thanks, bob. See you later. Down 155 on the day. Stay tuned. Much more on the fed minutes, what to make of them and the decline in the price of oil on the second hour of closing bell. See you tomorrow, kel. Thank you, bill, welcome to the closing bell, everybody, im kelly evans, and its red arrows across the board on wall street. The dow going out with a decline of 159 points, thats nearly 1 . It is the worst performer of the major three today, and the oil names, chevron, exxon, have a lot to do with that. Oil prices clobbered again today. The s p down 17, the nasdaq down 40, and heres a look at the dow heat map. The 30 components, there is a lot of red. There are just three names maybe marked, as well. Maybe only two as things settle out. Mcdonalds, we heard from a guest why he likes it there. Home depot doing well. The housing cycle, the earnings continue to be supportive. As mentioned, look at the bottom right of your screen, exxon down 1. 7, caterpillar 1. 8, and chevron, down 2. 5 on the day. Now joining todays panel, we have cnbc contributor carol roth with kayla tausche. And fast money trader guy adami and michael block. Welcome to you guys, as well. Guy, let me start with you here. Was it the minutes . Were going to look back on as truly significant . At one point, they wiped out the dows entire decline. The market turned positive. Then we moved right back down again. You know, its an interesting day, kelly. Last year, two years on a day like today on a steep decline, a recovery wouldve followed through the upside. Didnt happen today. We basically gave that entire recovery back, which was interesting. You go through the minutes. And i think what the fed is basically telling you, guess what, folks, the economys not that strong, and we are concerned about things that are going on in markets around the world. Thats my take from it. And you just look, again, and i know im beating a dead horse here, but bond yields continue to go lower, tenyears with a downside in terms of yield, upside in terms of the continued weakness in crude oil. Its telling you something. Im sure carols on my side in this one. The iwm through the 121 level on the dow. And you have what could be a interest you know that im on your side. I guess the question is, this really isnt surprising. Why do you think the market is having any sort of reaction . I dont think either of us thought the fed is going to raise in september, possibly not this year at all. Even when they do, its likely to be at a glacial pace. Doesnt the market know this already . Market knows it already. And weve talked about this before. They definitely can control the front end of the curve, but they cant control the back end of the curve. And that is whats scaring me. To me, thats been telling you and people want to look past it. They want to point to other factors. They want to talk about the move in crude oil being a positive somehow for our economy. Guess what, you live in chicago, wheres your tax break in terms of gas prices, its not there. Gas has gone up 50 cents over the last couple of weeks. Just a lot of bad things happening right now. And thats why were all going to put our money in iceland. Lets do our hedge, make sure were not exposed to currency and well take advantage of the 6 plus percent Interest Rates. Michael block, come and save us, tell a rational investor what theyre supposed to do. Were hearing so much gloom and doom all last hour. People talking about the Asian Financial crisis, a 10 correction looming for this market market, you know, wheres the opportunity to be made . I titled my note, i titled it, don, janet is talking to you. I now realized i had that backwards. Janet, theyre talking to you. We care because emerging markets are on the ropes here. And you know, its good to hear that guy and carol were never in the september liftoff camp. I wasnt either. But i think a lot of other people were. And thats been washed away today. These minutes were very dovish. The fed is concerned about this volatility. And theyre not going to do anything to upset the apple cart even if the data shows them they should. The data shows they should have raised rates a year ago when the Unemployment Rate got below 6. 5 . What this tells me is, look, you know, the boats going to steady here. You know, there needs to be some kind of flushout. August is proving to be a tough month here. Ive tried looking at the energy stocks, that didnt work and you have to manage risk. Theres going to be a time when everything settles out. Go ahead. Weve been hyper focused on this issue for as long as we have been. If you read the headlines about todays minutes, theres a real ambivalence about how strong the economy is. On one camp, a lot of headlines that say the economy is recoveri recovering. We are close to lift off. But then in the other camp, a lot of headlines that say were not there yet. Were not close. Theres still a ways to go for the labor market. How do you square that . I would argue this doesnt fit neatly into a box. I think you point out what the issue is. You cherry pick the data, you can fit in any data you want. Never mind that, theyre great, lets raise rates. But if you look at inflation, the manufacturing data, its not good. People ask me how is u. S. Growth . They say, well, its fine. It is slower and when everyone talks about inflation going up, lets face it, its not coming back. Lets bring in someone else we can talk to growth about. Steve liesman on more when the fed may raise rates and ho strohow strong the economy is. Im always amused when people talk about with such certainty about what they think is going to happen. To me, i thought these minutes lean slightly hawkish, actually. When the Federal Reserve says the time for raising rates is approaching, i kind of stand up and say, you know what, at least keeping the option open to raise in september. Theyre not saying it for sure. I thought the commentary on the economy was generally upbeat. Steve and its improved since then. Heres the thing, though. You know, and i take guys point about the markets. If you look at the reaction to the minutes, the twoyear w do,heeneawado,he doarasdo soitrhe mke dsn lie the fhere gng do is,r i ds i t wl a tha wlak ecom cditionwoe. F uet pturef er els on the pel because ey can ppa their es forhat i abooay thr them at me. When i go to analyze what i think the fed said, i dont look at the market reaction. Doo bk terwds and i say, well, why did the rketacke tha way . Dfrankly, im still a little bit puzzled by thereacon. Its interesting, the stock market prey mh mad aound trip from where it was before th mutesameout. Thtwoyear note did not. And ureightthat a vy go snal of where the market thinks the fed willbe. And the ia tha i d fall from 79 to 66oes indate dovishness there. Buthen see contionere approaching. When they say ty we m o uld ortlbe met. To me, that say younow at septembers on the table. Oh, lo, youot your six box. It is big day. I dont not care about the mark, bunot when i do my analys analys. Uy, you get in here and explain what you think is going on. The only things ipeak wh certainty about are my love of the new york nkees, the fac thated zeppelins the greatest band of all tim andyump sh. Outside of that, i speak with no certainty in terms of anything. And i dont know what the fed is gog to do beuse they have no idea what theyre going to do. I think theyre licking their finger and putting it up in the air. All i look at is the reaction to the markets f. The economy was as great ashe stock market would suggest until recently, then tenyear rates should be closer to 4 than 2 . Thats all i look at. Maybe theres some disconnect. Trust me, i dont speak certainty about anything. I look at the behavioral patterns of entities like the fed, which i consider a political entity, and i know some people would probably disagree with me on that. But it seems to me they always tend to be behind the curve. I think they are going to lay it out and be so clear they are about to raise it before they ever raise it so they can point backwards and say, see, we told you so. I think the fact theres any level of ambiguity, plus all events that have happened since then. For me, not a crystal ball but a good indication. Michael block, what about you . With all due respect, steve, thinking about you, this is not the world we learned about in the textbooks. You know, when you do your economic analysis. What it comes down to, whats the fed going to do . It does come down to whats going on in the market. The fed is watching the market. Theyre watching the market. To an extent. We hear about data dependence because thats what lets be clear about what youre saying. The fed watches the markets because it wants to bring the market along with it where it thinks policy should go. The market doesnt have a veto, per se, over it, if you have a temper taper tantrum like you have back in june of that year maybe or may, maybe it gives the fed, stops the fed. And dudley has said hell watch the market. But that to the fed becomes a communications challenge. Steve, i would say, its not a veto, they have a strong vote. Im a big believer in reflexivity. The markets affect the fundamentals. Go ez in a vicious or virtues you cycle. Thats whats going on here. When the fed sees china, its there in the minutes, its worrisome, tells them maybe we need to stand still. Lets be clear lets be clear with what the minutes said about china. They said a more severe economic downturn in china could affect the u. S. Are we at the point where there is a severe economic downturn in china . Theyre saying the stock market was pretty much noise is what they said. Well were watching that. Well, it was interesting, guys, lets go back to some of the data. This is data dependent. The Consumer Price index came in a little weak. And there were people saying especially with the drop in gasoline prices, we are still waiting for. It could turn negative in october. Inflation expectations, theyre moving lower, i mean, its getting more complicated for the fed. Especially from an inflation perspective, which the fed has been so focused on. I can trust that, kelly, with some of the retailers reporting. Consumers are using some of this gas savings, so to speak. And actually, spending it at stores. Look at t. J. Maxx, up 6 , American Eagle up 11 . Target, blockbuster numbers. Raising guidance for the Current Quarter. Yeah. I think youre seeing a totally different picture from what retail has reported or at least the standouts in retail have reported. But enough, enough uncertainty in the numbers and enough data conflicting that it would be prudent for us to think about it for a little while longer and make sure its not a blip on the radar. Its a longterm real quick guy, make it actionable for us. What are the guys. What do you do here . It continues to be mastercard and visa. Thats the way to play it. They have no credit risk. Its a transactionbased company. No still work. Mcdonalds we talked about this, two weeks ago, we said something odd is going on in terms of the price action. And i continue to think that the refiners work. They were down tosoro and valero. Theres action for you. I love it. Michael block, a quick last word to you. Yeah, with me still in the lower for longer camp, ive lite the reits here. You want to Start Playing it through the shopping malls, get the retail element in there, as well. I think thats an interesting trade. Its one ive been on. Its still working and its going to work. Thank you so much for joining us. Trying to make everybody, all six of us, thank you so much. Be sure to stick around and catch guy adami coming up at 5 00 p. M. One Big Oil Stock that may have finally found a floor. Cant wait to hear that. Much more on the markets roller coaster ride here and which s p stocks are in correction territory. Thats straight ahead. And oil prices hitting a 6 1 2 year low. Look at that 4051. Will that spark a flurry of deals . Youre watching cnbc, first in business worldwide. No students ever been the king of the campus on day one. But youre armed with a roomy new jansport backpack, a powerful new dell 2in1 laptop, and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats 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. We start here with an earnings alert on net app. Lets get out to dominic. The Data Software and Services Technology and Software Company is reporting earnings coming out here. The shares are up about 7 on 609,000 shares worth of volume. They report earnings per share of 29 cents. That beats the average analyst estimate of 29 cents. Earnings coming in slightly. Revenues coming in slightly better1. 34 billion. Looking for 1. 32 billion. They did also comment their nongaap or adjusted growth margins better than analysts were looking for. Also, theyll see Current Quarter revenues above analyst expectations as well as Current Quarter eps, as well. Thats why those shares were up about 7. 5 . 650,000 shares of volume. We should also point out for context, the yeartodate losses on the stock were 28 . So perhaps a more favorable setup for a bit of a pop given the results and the recent stock slide so far in 2015, kelly. Back over to you guys. Thank you, dom. Stocks are giving investors whiplash today after a post fed minutes rebound. Heres a look at how we finish with mcdonalds and home depot in the green. Slow august day, i dont think so. Lets look at the s p 500. It was a onetwo punch. We were weak at the outset over in europe on concerns about china, what was going on. I put up the s p 500, and then we had the 10 30 crude inventories came. And the market fell apart. We hit the lows after europe closed. And dont tell me it was a low volume day. We had heavy volume today. Look at the two biggest etfs out there. The spider and the russell 2000, very heavy volume. I know they were down. A lot of volume going through there. Commodities, the big concern. Not here, its one of the biggest commodity firms in the world. Very disappointing first half results. Cash flow down 30 yearoveryear. You can see that stock was down about 9 . And that led some of the concerns people had over commodities in china. The energy etf, broke everybodys heart again at 10 30. The levels came out and fell apart. New lows there, and everybody just sold huge volumes again today. This happened, put up the xle yeartodate. Six or seven times people have tried to pick the bottom in this year. And they have failed each time they have capitulated, sold off and then try to buy them back week, two weeks, one month later. And we hit new lows, its groundhog every day. Groundhog day every day. Every day i put these new lows up. A good day on Interest Rate sensitive stocks. The fed did matter for a brief period when yields moved down in the middle of the Interest Rate curve. And that moved up some of the Interest Rate sensitive groups. The bottom line on the fed, kelly, for all of this early and maybe it was dovish and maybe it wasnt. It doesnt matter. The s p moved 14, upside right after that report was released and went essentially down 14 handles. We were back to where we were prior to the fed minutes. And you must be getting quite familiar with the codes and keys for a lot of the names were seeing on the screen. And feels like were not done yet in commodities. Not yet. For more on todays markets, especially the drop in crude oil, Dennis Gartman with the panel. Afternoon to you, dennis. What happens now . Well, its been a bear market, hasnt it . And its going to continue to be a bear market. The problem that wti has at this point, we have a number of refineries simply shut down for maintenance but also for problems. And crude oil, coming out of canada, canadian west or west canadian select as its called is trading at about 23 a barrel. If you have the capability of buying Canadian Crude Oil and have a place to store it, if you can find storage facilities, youre going to buy canadian that wcs Canadian Crude Oil and sell wti futures to hedge it because its a huge spread. That continues to weigh upon the crude market. It continues to get wider. Youve heard me say this forever on my comments that i Pay Attention to the term structure, it continues to wide. They continue to widen their premiums to the nearbys. This problems not going to end and, here, write this down, itll end when it ends. Itll end one day in panic liquidation. Itll end when youve had an announcement of five or six bankruptcies, when mergers and acquisitions step in and take over. Itll end when the hedgers are asked by the banks. Youre the only ones that have been solvent. Can you take these other companies off my hands . Kayla . Thats quite a doomsday scenario, dennis, youre painting even as we have the bear market in oil and commodity names. Were seeing the major averages off 2 and 4. 5 from the recent highs. Im wondering when you think we will see that restructuring or bankruptcies. We saw the news about samson over the weekend. That was a huge deal. Just a few years ago. That was supposed to be the future of how oil and gas deals are done. Of course, 7 billion deal. Im wondering when you think we see more of those, when you think they actually start to spill over to the broader equity markets. I think youre going to see them soon, kayla. I think the banks in the oil patch are looking around right now for people who can take some of these bad investments off their hands. One has to ask ones self, what wither they thinking . Did they not hedge any other production estimates coming out of sampson . The only way the company couldve gone into the dinger as badly as it did into the demise is they must not have hedged. And the only people who are going to survive this are the people who use the wti and Brent Crude Oil futures to hedge, theyre still around, they will be the ones to whom the banks will go to and say can you take the samsons, the others off my hands. Its astonishing to watch kkr and glenn core who shouldve known better absolutely doing the worst of all possible trades. When you look to m a which most think is going to be an important part of this market going forward, who do you think will come out the winner . Do you have a couple of names you think will be the leaders in terms of doing the consolidation and good places, perhaps, to put your money and make that m a bet on . Well, carol, i wish i had that ability to do. I really dont. I think itll be surprisingly smaller groups out in west texas whose names nobody really is quite familiar with who have been sitting around biding their time. I dont think its going to be the chevrons. I doubt its going to be large names. I think names that few of us are aware of. Privately Held Companies who did a good job of hedging forward commitments and are liquid at this point. To be honest, i bet its unknown names that will step to the fore rather than well known names. Well, well keep our eyes out and ears open, dennis, and thanks so much for joining us. A guy who has been through a cycle or two. Dont go anywhere, weve got much more on this wild day on wall street, including a look at the big s p 500 names now in correction territory. Plus the energy names, were just talking about this that could emerge as takeout targets after oils big drop. Stay tuned. E students drop out. E students drop out. But how can you spot whos at risk . The one who lives far from campus . 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Stocks actually stage a huge comeback today. Remember, the Federal Reserve minutes hit. They hit early. The dow down about 150 points, then it went green. Briefly after that as we headed into the close there. And just about two hours time. Gave it all up again. And then some. S p 500 companies sank into territory on that one today. Well, we obviously know theres certain weakness in the market from certain members. Only about 2. 5 away from record highs. We have had a decent pullback on volatility. But its not like the total index is in correction territory. However, if you take a look at the index members, out of the 500 stocks, 252 of them, about half are down 10 or more below their recent highs over the past 52 weeks. So in correction territory, 120 of those are actually down 20 or more below those recent highs. Bear market territory and 19 stocks in the s p 500 have lost three half of their value over the course of their past 52week highs to this point. Among some of the notables in those 19 of them, its a broad swath of them. Down by about 56 over the course of the past year, and then you take a look at another part of the market that had been hot before, keurig, Green Mountain shares also down big, down by almost about 60 , and the single worst performing stock as measured from its recent 52week high until now is on the metals and mining side. Freeport mcmoran over 3 . Among the worst performers, those are some of the individual examples, but oil and gas, the Energy Sector as a whole, 85 of stocks in that particular sector, kelly, are now, again, in correction territory or worse. So, again, that sector overall getting hit, perhaps, harder than many others. Dom, thank you, thats the discussion we were just having. How many people have come up to you or others and said, is it time for me to be playing around with the energy names . What do you think . Its interesting. I interact with more of the mainstream investor and people looking longterm. And the question that i keep getting asked over and over again, should i be buying oil . Should i be investing in energy names . And its a difficult question. You called it a falling knife. But its also a question if you have a longterm perspective, what do you think oils going to be 10 or 15 years from now. I think its a difficult time to make that call. Ive had a little bit of a different spin on that, which is consumers who are in the texas, oklahoma and denver, colorado, area ask when it will be easier for them to get a mortgage. Mortgage standards have been harder for people who are employed at these companies that are cutting back. The banks dont want to be leveraged to some of these Companies Cutting capex and potentially see some of these jobs. And this was the first time in the United States history that weve ever had this issue before. Before, if the price of oil was falling, it would probably be a good thing for everyone. Now its been a boon to our economy over the last, you know, five, six, seven years. This is the first time were seeing the effects on both sides. And as you said, makes it a little bit harder to play it this time around. Time for a cnbc news update. Lets get back out to sue. Heres whats happening at this hour. And unfortunately, we start with grim news. 81yearold al assad was beheaded. The brutal killing stunning syrias archaeological community, and it underscores the fears there that the extremists will destroy or loot the 2000yearold city. A grandson of Nelson Mandela has been arrested for allegedly raping a 15yearold girl. Ambuso mandela will appear in court on friday for a bail hearing. The incident allegedly took place in a restaurant in a suburb of that city. Russian president Vladimir Putin and Dmitry Medvedev visiting memorials to two conflicts in crimea. They laid flowers at monuments at the crimean war and world war ii. Putin met with officials and commanders. On a lighter note, the canadian couple here had the surprise of their lives when they found, that guy, a black bear in their backyard swimming pool. The region has been in a recordbreaking heat wave. The bear after he had a little dip in the cooler water made his way to the hot tub. Which, right there you can see is attached to the pool. So there you go. Not your average bear, kel. Hes adorable. He is cute, right . I dont know if i want him in my backyard, but he is cute. A small smile for that one. Thank you so much. Sure. Oil prices falling to a 6 1 2year low. Our next guest says the Energy Industry better brace itself because there is going to be a huge wave of consolidation. His top takeover targets straight ahead. And why are military veterans up in arms over something former fed chair ben bernanke just said. Retired fourstar general joins us later on the closing bell. Welcome back. Heres a look at how we finished the day on wall street. The dow down 162 points, nearly 1 . We had a lot to digest. The fed minutes pushed markets positive briefly when they came out. We were down about 220 points at the lows of the session. Tracking oil. The nasdaq down 40, the s p down 17 today. An earnings alert now. The numbers coming in. What do they say . Hi there, kelly. Reporting its Second Quarter earnings per share, 68 cents, that is in line with what analysts have been looking for as well as the highend of the companys given range. We already knew the revenue and samestore sales when the Company Released it. To review 2. 77 billion for the Second Quarter on samestore sales increase of 4 . And when it comes to guidance, l brands giving light Third Quarter guidance of 40 to 45 cents. Thats below what the street is looking for. Although the company is raising its fullyear guidance to 3. 58 to 3. 73 a share from the previous range, it is still below what analysts had been looking for. We understand shares under slight pressure bouncing back just a bit, but light in the afterhours. Collapsing to the lowest level since march of 2009 today. Thats leading to a Major Economic problem for our neighbor to the north. Deidra with more on this oil problem. Hi. Hey, thats right. The Canadian Energy industry has been ravaged by the global kmod i th kmodties route. But it has hit record lows versus the u. S. Dollar. An investment has taken a hit. All of this ahead of a federal election this fall. Now, some areas of the country, like alberta, which is the heart of the oil industry in canada are feeling the slowdown a lot more acutely. But a recent National Survey shows that most canadians believe the country is entering a recession. We found a similar sentiment when we hit the streets. Have a listen. Its showing all the signs of a recession. Like were probably headed that way if were not already in a little bit of a recession. Were on the verge of a recession. And its right on that borderline. Now, the bank of canada has cut Interest Rates twice this year highlighting how badly the Oil Price Collapse is hurting the economy. Now on top of that, kelly, you have china slowdown, which not only hurts demand for commodities, but could put the brakes on canadas red hot real estate market. All in all, a perfect storm for the canadian economy. And we will see on september 1st if officially we have entered a recession. Back over to you. All right, deidra, thank you so much for now. Will a continued collapse in oil prices lead to consolidation, at least, throughout the Energy Industry . Joining us now is kyle cooper from iaf advisers. What do you expect to happen here . Well, certainly this price level is going to cause a major adjustment toward the end of the year regarding credit lines and other kinds of things. Although companies have done a tremendous job of cutting costs, the price levels are hurting. You take a look at some of the midsize companies, and theyre probably looking three different ways, actually. Looking down below into the microcaps where some of these guys are really stressed. And look at possibly acquiring things. Possibly looking across the aisle at some of their counterparts and saying, hey, weve already done a good job of cutting cost, but could we cut more by combining and possibly looking overhead. And is one of the big boys going to come in . Good assets and Strong Operational teams. Maybe a real big boy is looking down to acquire some of these companies at what are pretty distressed prices. Yeah, i was talking to Dennis Gartman in a previous segment. And he thought maybe it wasnt the bigger names that would be the winners in this potentially coming m a palooza. But some maybe privately Held Companies that have a lot of liquidity. Seemed like liquidity was the key take away there. Are there any unusual names, nonusual suspects you think may be winners in the m a game . Yeah, i dont look across those smaller outside companies, but i think dennis is exactly right. This is a long time. And hes very acute. I think thats very true. I think liquidity is going to rein supreme here in the coming months. If you have good Balance Sheets, strong assets and low debt, youre going to be in a great position across the aisle, look up, look down, look all around for the possibility of acquiringing a sets on the cheap. You mind naming some names of who you think is likely to be a takeover target here . I think those mid range ones. Devon, range, eog. Theyve got Strong Operational performance over the last few quarters and last years, they could look sideways, up and down as an acquiring target or as one to be acquired. There is still one big deal out in the distance. Theres some expectation that there could maybe be a higher antitrust hurdle than maybe earlier expected. Im wondering how much antitrust will be a consideration in these deals. Yes, theyll want to be opportunistic in consolidating some of these costs. But then after the fact, the authorities might want to take a look later on. Yeah, but in the its much, much different. For instance, the top, i just did a recent survey of companies. And top 32 companies represent about 40 of natural gas production. Only a little over 50 of u. S. Oil production. So the market is so fragmented that even the big boys have a relatively small share of the u. S. Market, and so, personally, i dont see that on the production side. Now, Halliburton Baker hughes are much different situation as they will control a much larger percentage of the service side of the industry. And that could be a concern. But in the enps, the production is so spread out about across so many companies, i really think thats not going to be a major antitrust issue. All right, kyle, thank you so much. Do you have any stakes or partnerships . Say that again, please. Do you have a stake in any of these companies you mentioned as takeout targets . No. I do not. All right. Always want to make sure were fully disclosing here. Absolutely. Appreciate it. Its kyle cooper. Absolutely. Appreciate it. Much more on this session on wall street still to come. Plus, former fed chair ben bernanke questioning whether being in the military really can pay off in the private sector. Your skills and wages are probably not going to be quite as high on average as the private sector person. Retired fourstar general Barry Mccaffrey couldnt disagree with more. He weighs in when we come back. Ben bernanke causing a stir while speaking at a panel earlier this week. Though, the panel was focused on the defense economy, the comment that raised eyebrows is when he said enlisting in the military wont necessarily help you in the real world. The evidence appears to be, though, that there really is not an advantage. I mean, if you are if you go into the military at age 18 versus identical person who stays in the private sector and takes the private sector job, ten years later, if you leave the military, your skills and wages are probably not going to be quite as high on average. Wow. Joining us with his reaction is Barry Mccaffrey. I imagine you disagree. Well, kelly, i thought it was a disappointing performance by this, you know, brilliant economist. See, i think his facts are wrong. When you look at 77 of our veterans are honorably discharged, the Unemployment Rates are exactly the same. Vets and nonvets. During their lifetime, according to 2012 data, the veterans earn considerably more than the nonveteran counterpart. Women earning even more than men. More than half of the civilian population. I think hes got his facts wrong. You wonder, whats his purpose to persuade americas moms and dads. Dont let your boys and girls come defend us. 60,000 killed and wounded in iraq and afghanistan. Not a good day for the doctor. I think he was calling out the u. S. Army, general, for using misleading advertising. Have an Unemployment Rate above 7 , which a couple of Percentage Points higher than the national average. Is it true that for the post 9 11 cohort, the success is somewhat worse, relative to the general population . Obviously they encounter greater periods of unemployment than they do years later. So, again, i think his facts are wrong. Were recruiting the enlisted soldiers out of the top 20 american youths. Were competing with collegebound kids, no felony arrest records. Meet all the filters. End up in Harvard Business schools, young captains, sergeants going to work in industry. 1 out of 10 Small Business is owned by somebody in the military generating more than a trillion in revenue which goes to show other ways, too, of illustrating the success. I wondered, though, you brought up the point about who the young people are. Recently in the wall street journal, benjamin, a First Lieutenant in the marines said, you know, why should there be a retirement for these guys and women to have a College Degree in the first place before they enlist . Why does there seem to be a little bit of soul searching right now about the training eded to go into our armed forces and then the quality of the people coming out . Well, i read his oped, it was a great piece of work. Its very provocative and interesting. But at the end of the day, we know if our young troops or high school graduates, if our officers are college graduates, were going to get a better product. And some of it may not be the educational content so much as an indication of their commitment to carrying out a course of action. Thats what we want in the armed forces, bright young dedicated women and men. And i might add now, kelly, weve got to remind ourselves, 14 of the armed forces are women with over 1,000 killed and wounded in combat. And thats what weve put in uniform. Thank you, general, for joining us. This afternoon. Saying bernankes flat out wrong here. Appreciate it. Its the race to rebuild our nations infrastructure of the airline edition. If a plane disappears, how quickly does the airline know it . Im phil lebeau with a look of the new technology thats letting airlines know within minutes if a flight goes off of the flight path. That story coming up. But utilities can now predict where the power will go out, within a few city blocks. Working with ibm, theyre combining micro weather forecasts with detailed data from local sensors. To predict where outages are likely to occur. And send crews exactly where theyre needed, when theyre needed. Ibm analytics from the internet of things is making energy smarter every day. The headlines were chilling. From an airasia flight losing contact over the java sea to malaysia air flight 370 losing contact somewhere over the indian ocean. These tragedies have many wondering how in this age of technology we can lose contact and not be able to track a planes exact location. Phil lebeau joins us now from the tarmac at Denver International airport with a solution thats about to come to market, phil, and could ensure this will never happen again. Kelly, a lot of this Technology Already exists. Its taken one company at a center in baltimore to put it all together. Every day more than 93,000 commercial flights are taking off and landing around the world. The vast majority are tracked almost constantly by groundbased radar. But what happens over large stretches of oceans or when flights cross the polar region . At Rockwell Collins in annapo s annapolis, maryland a new system called multilink ensures planes can always be monitored. Any aircraft thats flying anywhere in the world, if it deviates from its course the systems going to report that to the airline back office. Reporter heres how multilink works. Depending on the flight and its location, separate radar and satellite systems are sending and receiving signals from that plane. But those systems dont always communicate with each other. Multilink takes all of those signals to track where a particular plane is flying, and if it is on its designated flight path. If its not, multilink alerts an airline that something has changed. A very important attribute of this system that we have is an aircraft monitoring function. So in the event that aircraft were to go off course, off its intended path, we could immediately alert the airline that thats occurred and they can contact the aircraft to try and understand whats happened. Reporter right now Nine Airlines are testing out the multilink system. It will probably go operational and be offered to airlines around the world sometimes later this year. Kelly, its a very cool operation that we checked out in annapolis. What theyre doing at Rockwell Collins, solving i problem a lot of people probably didnt expect ever to arise in the Airline Industry, but its a real one and theyre addressing it. Oh, sure. Especially with flights increasingly over a lot of these wide oceans. Phil, thank you. Carol, you fly all the time. What do you think . First of all, im a bit shocked that this doesnt exist already. To think that we have planes that are losing contact at different points is staggering to me, thinking about all the other achievements weve made in other arenas. The second thing that pops to mind, and maybe phil can answer this question, is how much is this going to cost us, whether its through tax dollars or some charge on my ticket because i know the airlines are not going to absorb this. Well, the airlines will subscribe ultimately to this service. Its one of those things, its hard to say how much will this ultimately cost you as a flyer. Its like all technology. Its all part of the package of whats happening as airlines increase the sophistication of the technology and those planes. Theres no dollar figure you can put on this, but certainly almost anybody in the Airline Industry will tell you this is technology that needs to be implemented. Kayla would it make you feel better for your next crossoceanic trip coming up . Perhaps. Perhaps. I did just get back from china last week. I dont know. It is stunning that this technology was not broadly in place before. But then again, it does take a need to fill a need. Exactly. And the fact that were having this conversation is a good one. Moving in the right direction. And we have so many infrastructure problems. Certainly its probably at the very top of the list. But when it comes to airports and our infrastructure in general there are so many problems that need to be solved. One at a time. Baby steps. Thank you, phil. Great stuff all day from phil lebeau in denver. Will we see more turmoil in the market tomorrow and what should investors expect from another big batch of earnings including hewlettpackard, salesforce. Com . Well get those right here on closing bell. Stay tuned. Were back in a moment. Visibility into your business, it can quickly become the only thing you think about. Thats where at t can help. At ts Innovative Solutions connect machines and people. To keep your internet of things insync, in realtime. Leaving you free to focus on what matters most. Market seeing some big swings today. What should investors look out for . Tomorrow lets ask the panel here. We have earnings. We have the fed minutes were still digesting. Obviously were going to be watching crude. Carol, what are you watching . I think not just tomorrow but in the coming days and weeks one of the things im watching that guy and michael sort avenue lewded to at the top of the show is the momentum names versus some of the higher dividend yield, more boring kinds of stocks that investors have not really loved as much. It seems a lot of air has come out of the momentum names and given the Macro Economic backdrop i think if youre going to be in the market and again, guy and michael alluded to this as well, you may want to be looking at some of these names that are more steady state that are the high dividend payouts as a place to be in. Kayla . I think theres going to be some more digestion of the minutes, a little more handing kapg of when that hike comes. Carol didnt think it was ever going to happen in september. Rbs is saying those expectations fell to 36 . December had been at 100 . And now that is down as well. Weve got a couple of sxhourz weve got to watch china too because we know one of these days its going to be Something Else that jumps in the frying pan. For now well leave it right there, though. Thank you very much. Does it for us here on closing bell. Of course tomorrow were also going to git those earnings. We have hewlettpackard, salesforce. Com. So the signals from Corporate America will be closely watched and well bring that all to you right here on the show tomorrow. Fast money is coming up in just a few seconds now. Lets get out to melissa lee and the gang. I dont know if i can tell you, kelly. I dont want to break any embarringembar embargo embargoes. I can draw this out for 15 seconds. The chairman of microsoft is going to be here. Hell tell bus the company hes personally investing in because he thinks its going to be the next big thing in silicon valley. With that kind of tease there we go. Straight over to you guys. Thank you, kelly. Fast money starts right now. Live from the nasdaq marketsite overlooking new york citys times square im melissa lee. Our traders on the desk bricems seymour, brian kelly, Karen Finerman and guy adami. Another rough day for Big Oil Stocks as crude makes a new multiyear low. One big oil name in the dow may have found a bottom and well tell you what it is. But first to the story of the night, will they or wont they . Confusion about when the fed will raise rates leading to an extremely volatile session for both stocks and bonds. The dow down 229 points at its low, then reversing only to end the day low wrer while the tenyear yield hit session lows right