Transcripts For CNBC Closing Bell 20240714

The bond market flashesing a warning sign for the u. S. Economy. Germany and china both painting a negative picture, and energy financials, semiconductors are leading the declines, which are severe the dow at the low of the session down 782 were down 750 points as we speak. Chris, a crazy day for the markets. Lesss focus on the s p 500. What have been the key levels we have gone through and what are you watching from here i think its striking today feels worse than last week, but the s p trades above, so 2822 was the low, im going to guess theres probably more work to do on the down side. From the lows from may i think we need to put this into some context we need to remember that the s p is up 14 year to date weve entered this period from a position of strength thats different from the summer of 15 or the fall of 18. So i think the temptation is not to get too bearish just yet. If this is the start of a topping process, that will play out over time. Where to see those strengths . We look at things internally you still have about 70 of up s p in an up trend that numbers was 25 , so just to compare what a market looks internally, typically at a top, thats not what we see right now. I want to think about this as a correction in a bull market, not a change in trend. Lets get more on the selloff bob pisani has mork on the bertha comment, and Rick Santelli is watching the yield curve inversion. Wilfred is monitoring how that will impact financials bob, lets start with you. Of course were concerned about the yield curve inversion. Its an effect, not a cause. The immediate cause of all this weakness is Global Economic data thats been weakening. More of that day today german gdp actually down 1. 0 after being up slightly in the prior quarter. The market trend leer, theres a bit more than that theres a couple other issues weighing on the markets. Theres some though nobody doubts that it wont help, but will it help dramatically . And the bigger questioner for the markets to handle. Thank you very much lets get to Bertha Coombs , on pace for the worst day since august 5th, though still above the lows of that monday. Today were seeing a broad decline with biotech down just a bit less than tech among the biggest loser, amd, tesla, apple, all of which have potential. Youll he biggest customers holding back meantime, 280 near lows, most of them to the mid and small caps theyre still about 7 from those july alltime highs, wilf. Bertha, thank you very much it inverted for the first time ricks sister for more on that. Rick this chart goes all the way back to the bicentennial years, 1976 when the curve invertebrae 10s to 2s, bad things usually haven. Will it be the same this time . Not easy to answer but 30year maturity is the only one involved in in the steepness. Finally the dallas index is strong, not something thats normal morgan, back to you. Rick santelli, thank you. Wilf is following that inversion, well yale, the 2s, 10s inverting but the broad move lower and flatter we have seen in yields, and since early august certainly does that flatness may also increase the willingness to cut fed rates. If you look at the movers today. Citi and bank of america are down the most, both down more than 5 . That makes sense since the higher exposure to net interest ink income that plays out s citi and bank of america down about 14 or 15 interestingly wills wells fargo is the best performer. They have high net interest, but theyre also focused on the u. S. , so theyre by European Growth problems. Finally a reminder of how cheap these banks are, trading at 53 of the level of the s p 500 on averagep, very re cheap, but clearly a lot of fears. Thats a good flush. If you look at flowing into the xlf, the financials etf, they have been liquidated over the last 55 days youre thinking about making a very, um, out of you look at them washed out, you have to look at them on the long side here we just mentioned the p four of the big six banks are trading at or below book value you really only have jpmorgan above it thats just again on a longterm basis, highlights how cheap they are. If you think a recession is coming, or you think were going to cut rates, those valuationses makes sense. Its a questions, if the economy can country around just a bit. That last part is almost the better part in the context of a curve inverting, thats not always the bear market signal. Joining us on the phone, mario gabelli. Good afternoon to you. Thanks for joining us. Im glited to be on the program. Suggest youre not concerned, and you they this market selloff is overdone . Clearly the impact, the yields on a global basis, continued are kind of new on the bellshaped curve. So the market will be down you think about Warren Buffett, hes keeping his powder dry, so thats the good news. When you say an opportunity to earn businesses cheaper, what kind of businesses do you see opportunities . We like on companies that are cash generated but a to be thats down four, five points today, i think the combination of cvs and viacom and the pullback in the market, we think that provides a good opportunity. Theyre a director in the z, on a global basis those are the issues independence of that, i think you have a very good opportun y opportunity. Im speaking with how cheap cvs is, im saying direct to the consumer on a global basis 7. 5 billion sets of eyeballs 4 billionplus phones. Netflix has 150, maybe 160 million customers our house december hold plays like 1300 a month, in the case of some other cvs, you give the consumer what they said. Those are simp issues, but you have to focus on them. That they broke apart 13, 14 years ago for different reasons, different world, and we think it would work quite well for the owners, and will they do other things yet. This is just the beginning of a lot of dynamics going on and there are pluses and minuses all the time is media and check, when you see Something Like that no, no, no. We are having our on 26th conference on commercial and military aviation in a week. That area is now were talking. Youre invited. Im going to take you occupy that and then we have the 43rd auto parts markets, where were talking about used cars being hot, like buying used cars through vegging machines there is always interesting things going on on a global base. Mario brack to the broader markets. Do you think its legitimate they are selling off today some of your macro guys tossed out 30 to 40 of the earnings are nonu. S clearly if you have an operation in germany, fen if its 2 more widgets, the impact is negative. That reverses out in a year or two. Use pay much tea dealing in stocks, and less liquidity, so you have to be more nim able in terms of figuring out what a company is worth two years from now, and when a stock drops 15 , youve got to step up. Thats what were san diego doing. Is this trade war the biggest worry, on you do you think its a red herring no, i dont think the United States could allow intellectual property to be stolen. On the other side of the coin, to the degree that china is growing faster, it has a Multiplier Effect on the global economies. To the degree you slow down the effect, im all in favor of fray trade, so somebody has to arm wrestle. Most of my companies will obviously reexamine their logistics, just in time trade, some are already moves to vietnam. You know, this is lapping in a free market system will it be resolved . Yeah the question is when and how s im happy with it. It just creates confusion and uncertainty. Mario gabelli, thank you for joining us. Thank you for clarity have a good day. Appreciate it. Lets check back in. Heres the heat map for you, we are lower by 2. 5 , just off the lows for the markets not many in the green there. Theres some shape declines every single sector lower. All of that down more than 3 . Shares of macys trading down lower Courtney Reagan has the results. It was a big earnings miss after the retailer had inventory issues international tourism, that also weakened further from the First Quarter for macys thats a group that typically buys at fuller prices with little to no returns even with new tariffs. That theyre still frankly working through, figuring out what theyre going to do back over to you courtney, one question how much read across for the other retailers coming, the first in focus we went through some of the problems with the quarter than internal. Those are just macysspecific they had merchandise that customers didnt want to buy they called it a fashion miss. But they also said warm weather sales were slow. The International Tourist strength is not something that will affect every retailer, but for those it does impact, a tiffany, perhaps, that could be something to watch Courtney Reagan, thank you. Chris is with us hes he telestrator. What is this chart telling us . Despite the macys news, other pockets of the consumers work really well Home Developers are the best example of that. Were looking at both in absolute price terms and relative terms compared to oregon segments of the market, most importantly for us, in different environments, you have to own leadership when we look at Home Builders, these are about 16month relative price highs so youre getting paid to be here even in a tough market. If we look at internals, i want to make the point this is not just one or two, this is the whole group you have 100 of the stocks trading above their hoermz what really strikes us about the Home Builders from a macro perspective is how familiar they behaved over the last 17 months with how they traded in 9495 the onk line against a very similar macro backdrop with a very aggressive fed, surprise cuts in 95, Home Builders traded nearly identical. They were down about 40 in 94. The fed back off they emerged as leadership coming out of 95. Thats precisely what we have seen here. I they they have turned here names trade very well. In a different market backdrop, we need leadership and chris, 100 above their 200day moving average, is that something that can persist for a long time . Or does it suggest a top in group theyre above the 200day. You so the constituents are participating in that group. I think when you look at it, good, durable leadership trends are about participation. We like the fact that 100 of the names in the group are working. And theyre seeing this Mortgage Market working, and the impact thats having on consumers. I think it speaks to the idea, for the last number of years, low rates were regarded as bullish suddenly that narrative has changed. Particularly for a group like the Home Builders, when you look at the catalyst for the limp, lower bond yields probably dont hurt here. All right chris, thank you. Thank you all right. We have 40 minutes before the bell right now the dow is down 721 points the s p is also down 2. 6 , nasdaq 2. 8 . Up next firmer treasury secretary Larry Summers has his outlook for the economy. Retail stocks are getting rapped how many more pain could be ahead for that sector. Welcome back we have around 37 minutes to trade, down 763 points on the down, 2. 9 , the low of the session was 782. It was just before the start of the show to 3 00 p. M. , and we are getting close to the lows once again s p is down 2. 8 , nasdaq down 3 , red across the screen. As the bond market flashes a potential warning, lets bring in Larry Summers thanks for joining us today. Not a cause, but an effect, if you look back at recessions weve had in the past, how do you think about this today i think youve got to be concerned looking a the this this is suggesting market view thats been forming for quite some time now that rates driven by the fed, one presumes, are going to be coming down if the economy is slowing, and if the economy is going into recession. We dont where he see recessionlike numbers in the real Economic Activity statistics, but we do see in the statistics that lead more more, some of the sentiment statistics, some of the business expect a expectations signs of possible softness Alan Greenspan warned a long time ago that its hard for the u. S. To be an oways of prosperity when the rest of the world isnt. You see the chinese still with growth rates that ears would envy, but slowing significantly. You see some grounds for concern in japan, and as illustrated whats happening in argentina this week, theres always risk in emerging marge are markets. As i said a week or two ago, i dont think theres been a moment of greater Recession Risk looking out a year since the financial crisis i think there are real grounds for concern. We had a fresh session low as you were speaking its spooked investors, thats a huge topic of discussion so, therefore, the fed just cut Interest Rates by 50 basis points to take that out of the discussion i dont think a 50base point cut has been yet established as necessary at the feds next meeting. There have been very few of tho those in history i think it would suggest a high degree of alarm and high degree of responsiveness to markets of a kind that might add to the apprehension and concern i think certainly a cut in rates is very, very likely to be appropriate on current facts, but i think that the economic debate is largely missing the major issue. The major issue is that the fed doesnt have that much fuel in the tank at a moment my apologies for one moment please stay with us. We have some breaking news on President Trump, and eamon javers has the details. Reporter thats right, the president tweeting a burst of economic optimism, just within the past couple seconds, the tweeting out this message we are winning big time against china, companies and jobsare fleeing. Prices to us have not gone up. In some cases they have gone down china is not our problem, though hong kong is not helping of our problem is with the fed. Raise too much and too fast, now too slow to cut, as other countries say thank you to clue his jay powell and the Federal Reserve. Crazy inverted yield curve we should easily be reaping big rewards and gains. The fed is holding us pavement we will win. Ultimately saying that china is not the countrys problem, and interesting note on hong kong. Prunelleably what he means is hong kong is making it more different to get to a trade deal not entirely clear from the context here, though Larry Summers is still with us well get his Immediate Reaction larry, in particular, two subquotes from that, were winning big time against china, and the fed is whats holding us back your tay i have to say even by some of standards of his past statements, this one seems inherently coherent. Why one would say on the day when a yield curve is inverting, and the stock market was crashing, that the evidence was coming in that we were winning, i cant really begin to imagine. Maybe the president has some idea of economic theory as sado ma mass ocame, that somehow that means were winning . I dont think thats the theory that most americans have, who just warrant to see their lot get better off most of your viewers and investors want to see, so i dont relate so what he is saying at all. I think the effect of this kind of fedbashing, thats the only word you with use for it, that the president has engaged in, has to create a sense of a politicization of Economic Policy we dont see it very often in Major Industrial countries, but we see it all the time in emerging markets, where the head of state makes all kinds of comments, gives all kinds of directives to the central bank, and the result in terms of Economic Performance is usually pretty dis mall. I dont understand at all the logic of the president s bashing the dallas i think thats going to makes it more expensive for americans to buy imported goods, i think its going to make it more expensive to borrow money. Larry summers, thank you for joining us today the dow is till down more than 700 points. Back to bob pisani for a check on whats moving. A very brief blip up about 100 points, but just as quickly coming to the down side. The itt, it doesnt matter retail, weve talked about macys, but they retailer, forget about mas macys said, j. C. Penney, by the way, is not far from being potential delisted theyve been notified by new york stock exchange. Thats looking weak there. Those are clearly in response to the bad china numbers. And finally weve been noeling im calling it a depression in the oil and gas business i notice thats an extreme on term to use, but many stocks are sitting at tenyear lows, when you have oil down yes, sir, knowingly better than ten years ago. Thats a very, very different situation. The only thing i would note finally wire off this is not even a garden variety correction down 10 in the s p, which is what matters i nodes there are some small groups, but what Still Matters only 7 off of the highs. Bob, thank you bertha, whats moving at the nasdaq its been a volatile two weeks. The big caps are the big drag today. Microsoft, facebook, amazon and apple are responsible for about 40 of the decline, all of them but microsoft are in correction. When you look at the chip space, thats where we keep sees a lot of damage. Three quarters are in correction or worse and thats where we see a lot of the damage thats going to be very different to make up for these stocks to come back up that said, we do have a couple stocks bucking the trend netease is near the highs of the session. Grocery outlet butt in great earnings, change health care and fireeye turned around, but very few green stocks to find. Berth tla, thank you. Less than a half hour to go. Here are the things driving fears. The bond market flashing a warning sign for the u. S. Economy. Two disappointing pieces of data from germany and china, both painting a negative picture. Energy, financials semiconductoring all leading the declines right moe a. Michelle maya and tony rodriguez, good afternoon. Michelle, have the chances of recession been rising of late . And have they risen specifically today because of that 2s 10s reversion. Thifb on the rise, we have a pretty big externality trust i think thats why it was revealed today with a very weak data from china, very weak data from germany, really being driven by the fact that trade flows are down so it speaks to the name of the shock. The Global Economy is weakening. The u. S. Is going to soften as well were seeing the data. Its been softening. Its not in recession territory. Theres a discrete risk out there, though. In general, when you look at whether its treasuries or whether its Government Debt globally, how much lower can rates go we certainly have room to go lower. Obviously germany is setting the low level for a large liquid sovereign market i think it shows the market that the fed is going to have to be more aggressive than what the fed has been tell graphing theyre going to do. I think you can see lower rates from here, but i dont think were necessarily anticipating in the second half of this year seeing the tenyear drop below is , for example, but theres certainly room for it to go lower. Tony, one further question on the shape of the yield curve the uk yield curve also inverted today, but its at lower levels does that mean its more bearish than it is in the u. S. Sdp. I think its more bearish from a hard brexit, and number two, they do have greater exposure to the european economy than the u. S. Does, and the european economy so i think it makes sense the the u. S. As michelle mentioned, the fundamentals are still okay, and everyones recession radar needs to be on a higher alert as a result of the continued uncertainty on the trade front and the data that came out of germany and china, which shows Global Manufacturing recession, the intensity is certainly not abating, its picking up in fact chris, u. S. Verb the rest of the world, certainty seen some softening data here. Is it still the best house on the block . The interesting the answer is yes, that has not changed. A question i mikes Corporate Credit hasnt really is that a missing link what are west missing there . You look at models. When you use a Corporate Credit card, theyre below 50 , so just like the equity market, the credit markets in the u. S. Are certainly not sending a recession as an some winding and spreads, and i think the rear certainly forecasting the lower secondhalf growth, and that puts you in a position to where youre more be it geopolitical shock, the election risk out of the argentina, and then, of course youre certainly vulnerable to continue volatility certainly on he trade policy how closely correlated does it tend to be to europes on gdp. In this world where we have linked markets, and we are relying in global trades were very closely correlated. I think thats or okay the nature of the shock on, therein with us bin shock thats hitting all the big economies together i think that threatens to be fairly potent. So do we think a recession is going to show up tomorrow . No, we dont think its around the corner we do think the risks are elevated theres concern over how the u. S. Economy is able to withstand some of these risks, especially given were in the later stage of the cycle we dont have easy girth anymore. Theyre and the risk is were seeing such a shock. Thanks for joining us today lets get a check on some of the key factors that we have been focusing on today meg tirrell is having a look at health care. Seema mody following energy. Meg, lets start with you. Health care is doing better than most sectors. Thing tos are down, but still among the best performing. Drug stocks in the dow are holding up better than the average. Also contributing there is am ren, which is actually up. Its not so much you can find safety in the smaller and mid size biotechs. The etf which is more influenced by the small and mid biotech names is more than the ibb the Energy Sector having the worst day of the year, dropping to alltime lows, seema mody has more. Oil has been stage agonize rue bound over the past week, but today it got caught in the broader selloff wti settles at 56, its weak Economic Data from germany and china overnight coupled with the eia data commodity experts wait to see if the saudis will cut production to boost prices especially if they want the valuation to stay at 2 trillion nearly all the stocks are in bear market territory. But its worth noting the big oil giants like chevron are faring better than their fears in fact chevron, hess are higher for the year. Oils been in a bear market the best market of the the last decade its the one spot where we see Corporate Credit weakness as well just put it in odes month ago, iran was in the headlines, oil went up, thats a very different story than on you holy would have responded ten years ago lets get a check on transports and how those are trading with frank trucking stocks are under a lot of pressure e seeing the biggest declines the federal rules for trucker adding more uncertainty. Land star along with knight swift and j. B. Hunt, all underperforming the broader market, avis budget shares the worst performer. Back over to you. Frank collins, thank you. We have just over 15 minute minutes is Helene Becker great to have you. The fact that we have Oil Moving Lower and every uponen in the do you transports, which should technically be benefiting from lower Energy Prices, what is that signaling we, you know obviously the transports are signaling recession. I would say for the airline were heading into the fall, which is norm a time when demands falls off. Things dont pick up against until thank giving and christmas, so as of now were seeing very good bookings. Sure, on the recent flights youve seen how crowded the airlines are our conference is coming up in a couple weeks, we expect them to talk about a good third quarter, and a good fourth quarter. With the grounding of the max weve seen an artificially low compassion on growth year. When we forecast up 3 to 4 , and now its up plus or minus, were seeing a decline rather than an increase, demand is strong in part because airlines having razz so we should see pretty about earning here, i dont think the first normal year well see in terms of growth listen un202 is its interesting to hear you say that houses would you compare, and also cover some of the parcel carriers, and cargo side of the air crate business as well are those stocks attractive right now . So on the cargo side, trade is down, capacity in the market is down, i think with the exception of march, every month since november, weve had cargo volumes decline, even while in some points weve seen capacity increase rates have come down at the present time after several years of seeing cost increases, as we head into we dont think well have a good peak people will order online and ecommerce will protect by strong, but the growth rate is likely to slow we think when the dust settles on everything, a lot of really Good Companies are on sale, and especially with the selloff, and so were taking a look and probably want to own some of them were pretty optimistic on the out you could have a good economy without a good Airline Industry thank you for joining us, elaine. A check in on semis. Josh lip ton has more from san francisco. Obviously its taking it on the chin now in correction, meaning its dropped more than 10 from the recent high in july. A couple big works on chip names. One is renewed concerns about the u. S. Economy also continued trade tensions, a lot of these chick companies depend on china, and its a critical part of the supply chain. If youre a chip investor, what do you do now . I checked in with mitch sneeze he does he thinks thats a defensive name it sells Software Tools to design chips me argued even in an economic downturn, that should hold its own. Back to you guys josh, as always, thank you very much. We have 12 1 2 minutes left in the session, were down 735 points on the dow. Lets bring ins bring in art cashing cashin. What are they expecting, a bit of softness . The bulls will be on defense going into the close about ten minutes ago the indications were over for a billion on sale for balance. Normally that would be Strong Enough to move the dow down 20 points or so, so theyll have to be on defense. The dow haz it moves lower than that. It has stayed above the august lows, which are 25, 440. And s p lows which are 2822. So its going to be a defensive final ten minuteses. Just in terms of factors, the shape of the yield curve, anything else youre hearing absolutely. The faceoff between pakistan and india, two Nuclear Weapons nations that are going nose to nose, and the hong kong democrat stragsz, and some demonstrations russia, so the geopolitical back drop is not healthy at all. Randy, lets stalk about the levels we have seen in the market what are the key levels you are watching i am keeping it on the s p 500. Thats a better gauge of the overall market were only down about 6 , and still 13 year to date thats not too bad what im looking at from a technical perspective is that 10 correction level thats where i would remind people to keep an eye on it sort of converges with lows of the march and june pullback theyre boll one i the on only stopping point is around 27 5. Were talk talking about the potentially for eat 50 points. Chris, is that how youre thinking about it . Im thinking about it from a are we seeing the type of stress and fear that shows up near market lows its a start. The data can be early. 25 billion of flowing there. So theres a flush going on here in the sentiment world that i think is notable we actually had good news yesterday on trade does the market now say it doesnt care about that good news the good news was somewhat short terms, and much more of a relief rally it was not the start of a new upward move trade will be important, but youll need to see something more constructive than a temporary delay the feeling was it was less about trade so it might have been a gift from President Trump. Thats why it has not helped how does this compare to what we have seen in august past many people are on vacation, therefore marks are thinner. So youre selling into a kind of vacuum do you think its specifically a factor thats let people to sell today. To some extent yes, and were not inverted at the moment as the day went on, we got away from it, but this inversion is a one of a number of signals, and the typically lead time is about 12 months and during that time it needs to stay inverted, so yes its something to be aware of and well probably see a phi things tied to it, but if it levels off from here, and keep in mind we had another fed meeting in just a few weeks frankly. A 36 chance of that cut could be 50 basis points what do you expect to happen tomorrow. I want to see what the premarket futures are doing. The futures will trade all night long sow get a sense the selling has flushed out. Theres the possibility that its a big overdone. It tends to overshoot the market and then you get relief in the other direction. Usages it will be enough to offset what assuming there is no other news out there. I think we need to flush this a little deeper even the june lows, i think ultimately theyll have to be seen here. A lot of the secondary groups have already broken those lows weve is it with the semis, with the banks. Pullbacks, corrections, healthy part of a market, right . The fact that weve seen these moves so fast and so furious, is there mission to be gleaned from that its really reminiscent of 2012 think about what we had in 11, a shakeout in the fall and 12 was a riskoff year, two 10 drawdowns, one in the spring, one in the summer, and the rate was higher this feels similar i would ask, where are the excesses i think thats an important question to ask. Lets check in with the markets. Heres the sector heat map, red across the street. Utilities the bestperforming sector and the bottom energy down 4 . Financials down over 3 as well. Lastchance trade when you look at the action out of the oil markets today, i think it is confirmation crude remains . At a bare market. Right now we have less than five minutes to go its time now for the closing countdown, lets trade the close. Herb, what are you watching . Like everybody, were watching to see the volume into the close, but right now were focused like a lot of people on this yield curve inversion ius four inversions in the last 40 years have preceded recessions, but we think this one is incredibly different. Back in 78, high inflation, fed hiking rates, they continued hiking rates in 88, high inflation, fed hiking continued hiking. In 2000 you had an asset bubble that they were worried could lead to inflation, obviously in stocks, 27 times earnings. In 200506, you had the real estate bubble. This time we dont have that with the fed cutting once, likely to cut again, we think this selling pressure will pass andst and its a great time to accumulate equity. You just laid out how its different from times previous. Does that mean the veracity as a recession indicator can be called into yes . Well, i think you have 4 for 4, i dont think thats a high veracity indicator of anything its statistics, we need 100 data points to make a conclusion we we have to look at the flash and say what do they have in common then we can make that conclusion i dont think we can draw a recession conclusion from this inremembered yield curve slowdown, yes, but think about the main fiscal reforms, significant deregulation, now thinks ultralow Interest Rates stimulate the consumer, business demand they help with cap ex, 7 million openings for 6 million unemployed its lard to see a recession. So we had a oversold today . I think were close the market trend still looks up. I think you can get further down and youll get to the oversold indicator, but thats timing the market im an investor, were in for the long haul. Lets get over to Rick Santelli for the bond report. Rick yes if you look at an intraday of tenyear note yields, we dropped about a dozen basis points, though it was quite orderly. Finally year to day, 30year bonds making history today, lowest closing yield ever, keep this in some independence, were down 100 basis points. Bertha, nasdaq doesnt look really as good in rid as a sports car. Definitely not. Were seeing it all across tech today. Were watching as some of the sectors that held up the best are starting to get near where where chips are in terms of being in correction. It is still more than 10 above what it saw, which is where were start to look at whether well test here. Apple is still up for the week by about 1 . In fact as of this afternoon, it looks like the russell 2000 will close below mondays low. Bertha, we are closing essential at the lows of the day, and were starting to look like september and may theres the closing bell the Dow Jones Industrial average looks like it closes down close to 800 points, right near the close of the day good afternoon, if youre just joining us, we closed at the session lows, down 800 points on the dow. There is the worth day since september 4th, 2840 over 3 , a massive decline for the do you we have four sector, five sectors, massive sill down the board. Witch a panel of experts. Plus Mohamed Elerian will join us. Plus bob has a breakdown of how we got here. Ive sectors outperforming, a look at the major groups, retail down 4 . Industrials, banks, this has been the pattern gold, for example, up today. Thats a standard pattern. Utilities only down fractionally reits down 1. 5 . Stip moves down here, much better, half the decline i want to point out even though we have a lot of concern, were still only 6 off the recent highs of the s p 500 this is not even a garden variety correction down 10 . Nasdaq is down only 6 from recent highs russell 2000 down about 15 many , key levels to watch we closed about 2840 in the s p 500, the last closing low 2844 so we are essential breaking through that recent low here the 200days moving average, 2795 thats so were a good 45 points away from that correction shun territory 10 for the s p. That would be 2723, and guys, still a ways from that 10 territory. Back to you. Bob, thank you. Joining us to talk about this, chief marketist at capital wealth planning. Chris varone is still here good afternoon to you all. Jeff, i will start with you. For folks who are retail investor, for those who dont participate or check on a daily basis, to see 800point drop in the dow, that certainty haz to be scary if you were tuning what wall i think wilbur ross said it this morning an inversion of the 2 and 10, being that negative is a bit aggressive our shortterm model flashed a cautionary signal three weeks ago, but i certainly didnt expect anything like this. Receive, your stake . I think its important we dont overreact on any one particular day, especially in august having said all that, when you have the s p 500 up over 20 in just the first, six, seven months to a years and earnings and the economy are slowing down, you have to approach this market with a bit of skepticism. Chris, the fact we closed at lows of the session, what does that tell you. Shows how insdrim nat the on selling was day. It was broadbased across the board. That is the flush you tend to see, just the response and the sentiments we have heard thereon throws how francis many behavior is its difficult to find backtoback 20 drawdowns in consecutive years. I get the point youre not concerned 13e68 about the inverting, but what about theb about the factors that caused it to invert . Theres a lot of moving parts over there the russia is blowing up their own weapons, china eels troops on the hong kong border india and pakistan that my friend art cashin mentioned, you have a lot of moving pardons le yield curve has always been the the onday tbill and 30day bond thats nowhere near inversion. What do you think the transports are telling us here. Were close on the transcripts. The Dow Jones Industrial average is not i looked at it in the greenroom before i came in here. Right now you dont have a dow theory sell signal joe, which sector would you want to be buying in in todays selloff i think broadly speaking, its important you think about the regional allocation. I think one step further, you want to be in a position to from the healthier parts. I look at the u. S. Consumer, the balance sheet, take a look at whats happening in the labor market but going just bejoined yond that and thinking about sectors, its also important to be positioned in a way so you can understand, so i look at other low volatility exit strategies lets bring in Steve Liesman given that massive macro move in the yield market today steve, whats youric youve been looking at the other past experiences. When it goes negative, it tend to stay, the calfance are whether the low being so lieu, so so much of of the stroest and we just dont floe we do know the Global Economy is weakening. I think the bond yields correctly reflect the outlook for growth globally. Along with the outlook that is muted. I think the fed will respond i think the market is somewhat thinking about a 50base can you see in september, but i think sorry if they yields were to remain where they are, and the storm westbound to remain down, the fed maid consider a 50 basis points cut. Steve, have the stakes just got even higher for jackson hole i think it has. It would be to see how hear how the chairman responds. Hes never pushed back on the president. The president continuing to blame the economy on whats happening at theFederal Reserve. I dont expect the chairman to change his tune there, but perhaps other officers will say, you know what . We were planning for a modest slowdown, onethats gotten much, much worse joe, steve just mentioned the chances of a 50 basis point cut are increasing clearly we just had a rate cut, and it doesnt lead to much of a prolongle rally. But would it be indefinite would it support the markets from here on out i just dont think so. You know, the yield curve inversion is yet just another flashing signal, another warning sign reinforcing what we already know, which is the Business Cycle is nearing the ends. Earnings are decelerateding. The oort that the federal research, you know, its not long cal, now rational i would see a rad are really, just not sustainable 0. 00 , so the idea every reinverting is not in its scherr sfant or volume vanity at this point clearly in jumped theres so much less ammunition, and to flex the muscles the economy again. Yes, the data is slowing down, but theres ammunition that can be delivered. There is ammunition you could spin this story both ways, wilf the Federal Reserve has eight quarterpoint cuts remaining they could bee even more bonds at an ease more negative rate, but i think theres consternation out there for what end if its really the trade policies, and the trade issues are manifesting themself first in global weakness, what is a rate cut going to do i think thats part of the conversation i think joe was asking that question, yeah it might help the stock market, but the question becomes, do you go and make investments because rates are a quarter point lower. Jeff, is that something that would happen the fid did do anything i think the whole inversion is capital flows. I talked to accounts, insurance companied in jenny, and you have to match off your the u. S. Is probably the business to be, so i think its more about cap flow, in a it is incertains is it is necessarily a new sinus. Biff a any set of tools. Sfloimp but i think han inverted for a while this may not be new information, but i think its the same bad information. I wouldnt disagree with that, steve. Chris, i just want to come to you in terms of which sectors you think are worth buying i think you have to look for what was leadership going into this we talked about Home Building and construction, those are areas to use weakness in your favorite Tech Software semis are notable here when you look at some of the names in the group, they have held up okay here. Even, look it, like are like intel quietly under are hundred dollars in there what doesnt jivey an inverted curve. The data has not been that bought over the last four, five weeks. So there are three things here that dont say the message is the curve is one thats to prescient at this time. I saw the great arthur cashing walk by, and coupe oohs to limb. The streets was looking for 82 cents on revenue. The forecast had called for 13. 38 billion. The q1 guidance is light, relative to exports each looking for a florida to up to 2 growth turning to the segments, infrastructure platforms, so cord float working, 7. 9 billion in the quarter, security 714 sfloimp bill yoismt. You dont want to miss the ceo of cisco tomorrow morning at 9 00 just continuing this final market that the, will you about he buys anything in the market we just sitting on our hands. I think one of your fests thought about no opening before tonight. Warren buffett says when they go up sharply, they become riskier. Going down, they bim more reasonable. Another wild day on weight we have all the angels bertha took is lookingty birthers there the nasdaq is Still Holding above those monday lows, the big caps that sent us down were not unpredictably, chip makers, facebook today was one of the big drags, along with apple as well taking a look at where we are, the nasdaq is only about 6. 8 from lows, so its not a correction, but hardware, off 13 . Chips closed right near the lows we saw a week ago monday, still above the june lows, however software getting near corrections, xlun indications are holding up bur but this is the maul chaps, which you this would not by nonetheless they are one of the worst performers down, taking out last mondays low, back over to you bertha, thank you very much. Seema has a look at the industrial caterpillar, boeing down among thers, in total accounting for roughly one third of the losses today. Analysts say its data from overnight which highlights the down side, especially in a market like china where a lot of these industrial giants are seeing rising competitive pressures. The other concern is ongoing trade uncertainly will incentivize local chinese firms to find local providers. That seems to be a big factor. Morgan certainly does switching gears to the banks wilfred has a look at financials lets so what they banks have done, since the sharp playoff in the yield curve started to pick up pace. S p 500 since the start of august, down 4. 7 most of which are down double digits as you see banking have clearly born the brunt of this recent twoweek selloff . Sup warrantsed in yeses since then, we have seen expectations rise for probably a third, but also the yield curve move lower. No doubt guidance will come down the question then is which one of these are moving most of all. Its the Money Centers more than the investment banks, but clearly pretty broad based not to mention the fact urn tuning being this yesterday on the air, with all these geopolitical angst, and many of these financial names are exposed to that. For sure, but wells starro 95 earnings in the u. S. , but clearly still suffering as well. Lets discuss the broad selloff moment elerian, chief economic adviser, thank you for joining us thank you, wilfred. So whats your take for todays move specifically and the relevance of the 2s 10s inverting. If you take the markets as a whole, stocks, oil, commodities e. Very rational reaction to concerns about Global Growth after the numbers we have gotten this week, about policy infectiveness by central bank, about liquidity and also a sense you have entered a defloblization phase so you think youre seeing a very norm at reaction. I think thats a key point. Really were in uncharted territory. How does this ballet out play out we know that the system is build and for globalization, so when you start deglobalizing, there will be many more losers than winner. Ironically the u. S. Is a relative winner in this environment, because its economy if relying lels on the rest of the world. Also expect that certain darlings of the market will look less attractive, and finally economists grow up with the notion that you want to be a small open economy, well, solidly the smarter economies will be doing berne. How significant is the move in the argentinine peso this week is that something through Technical Analysis will spook risk assets . It should ic in investors that have gone into this class thinking its liquid this is an understandable reaction of you have tourist investors who go in and dont understand those markets when volatile comes, they tend to do the wrong thing this is the rye minder of a bigger issue, that the system has overpromised liquidity to its end users. When you hit any sort of pothole, the liquidity disappears on you complete lid, you guess this mass gap in pricing. Mohammed, i wonder what you these about this notion that they have being politicized. Im not even talking about President Trump tweeting, which he was doing earlier today i mean the fact you have these trade policies, fiscal policies, here in the u. S. , but really abroad, this rise in populism, is it Holding Central banks hostage . I think its the markets holding the Central Banks hostage. No doubt theyre under growing political pressure in the u. S. So far its been words, not action also elsewhere its been actions, but thats the reality thats out there but your point that had dried cal is information banks are being held hostage, but by markets. Look at the nair tiff. The markets will push the fed to do 50 basis points, some are saying why not an emergency call the fed sees no reasons to move, busy yet it would have no point. Why . If it doesnt, it will disrupt markets. The more it cuts, the less impact it has on the economy and the less impacts on markets. One central bank that doesnt have much ammunition is the ecb. Do you think the euro zone is head for a recession later this year yes, and ive said it over and over again people underestimate how weak europe is. The german number shouldnt have come as a surprise people think of germany as a stable economy, finding out that its not that predictable anymore. Yes, we are going to see sub1 growth, you this you approach stalled speed and bad things extort to happen the ecb will respond by cutting rates. That would push yields even lower. Its going to not do much to the economy. Its going to damage the Financial Markets move, wilfred, you know this, the answer is to deploy other progrowth policies they just dont have the political will to implement them. To that point, though, i think its worth dwelling on this, germany has the financial firepower to deliver its own fiscal stimulus, but italy, if it plays by the political rules, does not we have a vote of no coacheding much in a weeks time. Yeah, absolutely. Mac ear fielding it for both, and you have five main players are completely distractsed politically. The uk is distracted by brexit spain and italy distracted by elections. Germany distracted by an ongoing Political Leadership change. France is distracted by opposition through reform measures when you have that amount of distractions among your main player, your team will not do well plus you have no teamworks going on in europe it is a problem, politics is increasingly influencing economic and outcomes, and Central Banks can no longer shields markets from the messier politics. Lime going to ask you the same question ive asked other guests on the air today. Looking at the u. S. Specifically, the fact that the consumer has so strong, so much does hinge or consume he sentiment, with the dow do you 800 points, for make the investor who is tuning in now, seeing these numbers, what would you tell them . First off, i would tell them be careful of a selffulfilling expectation cycle. People tuning in, if they look at only the dow 800, but theyre welling, this is the first inversion, its a great predictor of recession and those dont realize its inverted because of diagnose proportions. They become more cautious, they spend less as they spend less, businesses invest lest. Next thing you know, we have talked ourselves into a recession. I think that risk is going up. We have to remember that the fundamentals of this economy, remain solid, so theres no reason to slip into recession unless you get selffulfilling expectations great to see you, as always. Thank you for a good soccer analogy. Always welcome. Thank you so much now, transports got hit hard along. Phil lebeau is having a look at the, and Frank Collins is covering the trainings phil, lets start with you. Lets start with auto general motors, all under pressure, by the way for Fiat Chrysler the parts suppliers, you want to talk about really ugly charges are charts, its not hard to find them. American axle, this is a oneyear chart, but it is not only at a 52week low, but its the lowest since 2009. You have to go backs to the recession. In terms of the airlines under pressure by the way american, that is a 52week low there. But for the airline following proposed changes adding more uncertainly. Avis budget shares down nearly 7 . Closing down more than 3 . Closing down more than 2 . They have turned positive in afterhours trading, back officer to you frank, thank you very much an ugly day in stocks was sparked in part by the move in bonds market rick, clearly weve had extreme volatility over the last week. Im not surprised at all as a matter of fact, this is what ive been watching. On fed day, i want the Biggest Issue is dollarant when it comes to Central Banks, because the u. S. Greenback has a lot of turnstiles many of them are parked with buyers think about emerging markets equities are squeamish, inflation is high. Much of their debt may be structured in dollars. The central bank sighle of trying to outdo the others, get in front of the it, is creating a dynamic that has many back chutes right back into the strength of the dallas we had a really smart guest on earlier today, maybe it was pimco. We import inflation, textbook it sounds great, but in the real word, its not whats happening. It seems that thats the notion or the strategy or scheme to try to keep the dollar from getting strong, theyre going to be wasting some of not eight quarterpoint tightenings think probably should be hotting on to. Rick, how much does that speak to distortion in the market right now well, for me, first of all, after seeing a lot of crazy markets in the last 40 years, especially with Interest Rates, theres a couple things i would like to point out. After the initial shock, it was trading positive five, as it started to slip negative, we saw yields come down were you go 50 basis points of a a after the initial shock before lunch, new york time, they had been unbelievably steady this is a completely different type of market ill tell you what think about it this way. If you look at the dollar versus yield curves and Interest Rates, what you would notice is everything changed after the kriltz, okay whether it was quaint at a time ink easing or the fact we sold our souls for bailouts to give up future growth so we didnt have a big ugly chapter, were going to pay the price for that. Equities have been firm. The dollars has been firm as well i think Interest Rates going dont gives you a berne fit to equities, but its going to take growth away for a long time. Japan is the madle for this. Their stock market in 1989 walls 39,000 plus. In the end, they have trimmed off growth to have all these policies to manipulate markets, to take after the rip off the bandaid pain and theyre paying a longterm price for that. Rick, thank you over to ari. Hes over at the telestrator. One, i think it does suggest the clock is ticking from when the curve first invertebrae, that recession may not come 18 to 24 months later this is the part of the cycle where selection has become much more important the relative ratio between the russell values, thats the its been been very correlated action it is curve has flattened, theres a premium placed on these highergrowth companies. Tech become the growth part of it, aside from being readily broadly strong across capitalizations, what i really like, the zero correlation to Interest Rates, as much as rates have come down falling here, tech has held up relatively well, still above the breakout levels, still above the 200day. If you give its get a backup in rates on the flip side, you have the Energy Sector. Heres a Group Whether oil rises it does okay, when oil falls, it gets absolutely slammed. It shows up in the chart sector. We see that as a resumption of the down trend if youre worried about yield curve inversion, that is the sector you want to stay away from, but as it stands here, deck continues to do well. Thanks so much for that analysis time for a news update sue . Heres whats happening at this hour. Hundreds gathered an antivaccine rally in albany, as lawmakers consider a bill that would eliminate nonmedical exemptions amid the worst Measles Outbreak in 20 years, Robert Kennedy jr. Suppose at the really along with leaders of the antivaccination unit. The vape Industry Group is suing the government to delay a review of electronic cigarettes, the Association Says the deadline of next may could wipe out many of the smaumer companies in that growing industry firefighters backed up by planes and helicopters battled a fire on the greek island for a second day its burning through a protected nature reserve here at home, the Ohio State University wants to trademark the word the. The University Filed for the trade mark last week, stating that it wants to protect its use of that word as part of the schools name on clothing and merchandise. You are up to day. Thats the update this hour. Guys, back to you. See you tomorrow. Thank you, sue herera the dow closing down 800 points were covering the selloff from all angles, but first how we got here. Bob pisani has the breakdown for us here we go, in stocks industrials, all of these herpes also weak in august. Theyre down half as much as the overall market is it still really that bad. Remember, were not even in a gardenvariety correction yet. That has very heavy exposure to smallcap financial stocks which are getting clobbered by the higher rates that was last monday, wait a minute, we closed at 2840, so now a 200day moving average were 45 points. So thats a good one to look at. Down for the s p 500, 2723, and again were talking about 120 points for a 10 correction, back to you. Bob, thank you diana has a check on the Home Builders the Home Builders got nailed along with everyone else despite falling Mortgage Rates all major builders were lower on the day. The reits also a lower nothing was spared builders stocks have been juiced by lower rates, but perhaps fears of a recession are stating to outweigh older rates she said the market swings were seeing now will fact more about their stock port follow i donts retail getting hit heart with the broader market. Le ate bring in lorraine hutchison. The call this morning said the u. S. Consumer has for appetite for price increases remember a lot of the tariffing that have not been delayed are on aparity thats why we see continued down side risk, and also to the stock. But that accounts for a 13 decline, or were there other macysspecific factors we learned about today . They missed pretty badly the they lowered their guidance for the year by 20 cents if you look at what will happen in the back half we see problems mounting, not Getting Better when you look across the retail sector, theres different pockets, right macy specifically Department Stores weve been talking about, with some of the big head did not birchds. What do you like and why sure, we are still rimmeding like burlington, t. J. Maxf we think the u. S. Consumer is becoming more and more value oriented, but we still want brands so this is where you go. When you think Something Like tariffs kiting the consumers very quickly, we you this no cant about they be looking, but i think the fundamentals will continue to be very strong where does walmart stand in your rankings . Its covered by one of my colleagues, who covers it more from the grossly standpoint. Our focus is more on the Department Stories ologye okay. Lorrai lorraine, thank you investment todays selloff ing the parks. So what does it mean for wework just filing its ipo today . Leslie picker is here to discuss. Its probably not a suspicious sign, because investors under water less less likesly to pay for the upcoming ones uber and lyft plummeting day, even down more than 6 , 25 from the respective ipos. Luckin coffee also plummeting. So its against this back dropped, wework disclosed its. Ipo and questions about viability during an economy downturn, guys we have seen a pretty robust pipeline this year, and we heard up until recently how ideals conditioning were. The dow down 800 points in a single session, could that have the potential of putting some of they will names and plans on ice . These are certainly Market Conditions that would spook the average ipo, the reason being the perfect ingredients that you were talking about are on which times higher valuations, because the higher valuation in the public market, the high irfor the ed bigger the price swings are on a daytoday basis, the harter it mao makes to on price an ipo so maybe you are a smaller could get, you may look at the markets today and say, you know what im going to take a couple months, take it from there, see how it shapes up. Leslie, wework aside, what is the pipeline looking at . Are they going to see a continued Strong Equity Capital Markets very strong will be . Can that continue . Its expected to be strong. August is a very illiquid month for the markets, so its not too uncommon to see more volatility than in other months of the year most of the ipos thats why they start september through november, just because they do do more liquidity in the market, but as you mentioned, there are certainly significant deals, one it are is peloton. Mime drengt club, cnbc said they were looking for a september debut as well. So the conditions dont improve, it would mean delaying, though i dont know if theyll do that, or taking a valuation cut as a result of visitors leslie, thank you. The dow having the worst day of the year. Joining us is peter tuckman, and alec young what do you think of the strayeding action . And do you think it will continue its hard to say. I think we sort of had a perfect storm. The story about the recession. Its interesting if you look at recession just basically its a prolonged industrial slow down or Global Growth slowdown. We basically have not seen that yet. The inverted yield curve is not predictive unless it lasts for a longer period of time. The story that one was spinning that suddenly because its been inverted for a day or week or so, this is predictive of a recession in the future. That plus, you now, ar they are talk about what was going on around the world or span stack or the Commission News off ejipt are gyp or china will it for you through tomorrow im not sure weve had up and down beck are we could by up is,000 or down is,000. So i think we have ainge zeile so for today it was sort of a perfect storm. We did close on the lows its definitely worrisome, definitely room for concern, but its hard to know what tomorrow will bring. Alec, whats user text as to if we see the leave are bearshes in dodds you this expectations have come dun down a month . No, i think were likely to see further negative revisions despite the weakness from global his, the irony is that the consensus on wall street is expecting an in this in the fourth quarter, and into next year its supportsed to be 11 in 2020. Right now theres no cad list that would late to this agency celebrate and profit growth. Its clear that the consensus is too optimistic thats why one we so some sign of make are mac look stability, whether its end takes or intereconomic decide are data,ent we seed those things, i think the path of least leasesance listen lower. Investors have been very pashlt, and i think the bears are slowly gaining momentum its just not possible to be optimistic when youre seeing the kind of unpressed collapse in bond yields across the globe. Thats not normally basic. You trae the reek today, and i think this notion is i think overly optimistic. I think now youll see momentum building on the down side. The closer the session slow yous, the cart of the do yoush it shows appropriate typically building. I jay with this gentlemans did not. I think its and so i think what were seeing is that anxiety caused by all of that, but the s p chart, you know im a trader, so we lee at the balance it is. We were almost 97 to sell so we saw that today thats one of the first daze ive really seen that. When you see the chart that closes at the low of the day, its a cause for anxiety. Peter tuckman, alec young, great to see you. We have a quick programming note markets in turmoil tonight at 7 00 p. M. Eastern. The dow transports were crushed today along with everything, down more than 3 . Lets look at the sector Don Broughton joins us from broughton capital. What is your take when it is thrown in 24 hours after good trade news, is the dow transports wrong to sell off today . Not at all. It is something weve been talking about now for six, going on nine months where first a little bit, we saw weakness in the International Air freight numbers in europe, then that bled over into the asiapacific, particularly inbound into shanghai and it has just continued to bleed into the u. S. Economy as we get into trade dispute after trade dispute. It has negative implications for the philosophy and the volume of goods that gets shipped around the world, and thats just a bad, bad news story for our economy and everyone elses. Yes, donald, to that point i mean you certainly looked very closely at this interaction between these freight flows, these freight data points and the broader economy. What is the latest round of data telling you right now and how does it compare to, i guess, previous times, especially as we are talking about the yield curve inversion and whether it is flashing a recession signal or not oh, yes, absolutely you know, morgan, you and i have talked about air freight, the asian air freight in particular quite a bit over the last few months yes. The preliminary index on air freight in asia for july is just out, and weve got the overall volume beat down 7. 9 . Hong kong, volume was down 7. 7 . Given the civil unrest thats going on right now, theres no way i can project that that number is not going to be down 10plus percent in the month of august thats just detrimental to the world economy, bottom line lets talk a little bit about the fact that every component of the dow transports is lower today, even as crude continues to crater here i mean the fact that we have seen Energy Prices come off as dramatically as they have and we have not seen it give lift to the transports, does that surprise you no, no, not at all. The reason for that is really simple you know, the Largest Consumer of diesel in the United States, as an example, is union pacific. If the transports burn a lot of diesel, they burn a lot of jet fuel, they burn a lot of fuel, and i see what is going on right now in the commodity market in general but oil specifically, is demand is weakening. So guess what . If the demand goes down and supply stays constant, the price of that commodity will drop. You see that again and again what is happening in debt, you know people are going there because thats safety, and as they go there to get away from the risk that equities present they bid up the price and the yield falls. Lastly, donald, how important is all of this unrest, these protests in hong kong, to the freight picture globally right now . Well, it could end up being very temporary the bottom line is that is a one of the largest cargo airports in the world. It is where we ship tech, parts and pieces coming in as well as finished product thats been assembled out, and it can be highly detrimental to not only their economy for obvious reasons but ours as well you look at, what is it, 17 of the trade deficit we run with china is smartphones alone well, were not shipping any smartphones out of there today or yesterday donald broughton, thank you for joining us. Always a pleasure we will continue to stick with that theme of hong kong, looking ahead to tomorrow. Investors could be looking to see what happens with the protests there flights resumed at the hong kong airport today after violent clashes between riot police and protesters overnight the demonstrations have continued for ten straight weeks and show no sign of letting up Javier Hernandez is the china correspondent at the norm times on the ground there, joins us by phone for the New York Times he has been covering the hong kong flashes between protesters and the government and i guess Law Enforcement there. Javier, what is your sense on the ground of where were at in terms of the recent escalation and whether that will continue to sustain itself and feed upon itself reporter well, i think it is likely that it is going to continue at least for another couple of weeks and even beyond that there seems to be no middle ground here between the protesters and the government. They seem to be driving each other towards increasingly polarized positions. For a lot of these protesters, while they have used extreme tactics, they feel that it is necessary to continue this kind of violent, aggressive streak in order to gain the worlds attention. So, javier, have you seen any signs of in the last very short term, 24 to 36 hours, of things settling down, particularly with the airport opening up again, or is that Wishful Thinking reporter the airport has reopened and flights seem to be running normally but i think were still likely to see some sense of tension and violence outside of the airport for the next couple of days. Protesters have mass protests planned, and it seems that these sort of smallscale confrontations between police and protesters are continuing. There was another incident yesterday outside, you know, farther away from the airport but where protesters clashed with the police and tear gas was fired. And so it is likely to continue this kind of trend of the smallscale confrontations, and i think were likely to see that kind of activity in the foreseeable future china has accused the u. S. And other countries of supporting the protesters. I know yesterday, for example, chinese officials said no to two u. S. Navy ships calling to port in hong kong in the coming weeks. Is that actually whats happening, what is playing out on the ground there . What is your sense from the discussions you have been having with protesters . Reporter well, theres certainly a sense within the mainland this is all being orchestrated by foreign governments, although they havent provided any evidence of that thats a narrative that theyve driven with beijings very finelytuned propaganda machine. So theres this disinformation war i would say going on within china to make the public there feel that this is all the work of the United States, which many people see as an enemy now, especially in the midst of these trade tensions so thats likely to continue and drive, i think, the mainland toward this sort of nationalistic surge that might put more pressure on the government in beijing to take a more aggressive approach javier, thanks for joining us we appreciate it stay safe there. Thank you another big day of earnings tomorrow walmart and alibaba on the docket lets start with a preview of walmart. Courtney reagan has that for us. Hey, court. Reporter walmarts u. S. Comparable sales is the key metric to watch. The street expects it to grow 2. 4 , which would mark the 20th straight quarter of growth earnings expect to fall to 1. 22 per share on 130,110,000,000 in revenue, a slight increase over last year. A third of walmarts u. S. Sold merchandise is imported, china only a part of that. The ceo told me increased tariffs will raise prices though the goal is to be the low price leader and manage margins, keeping shoppers and shareholders in mind when making tariff mitigation plans. Courtney, i know you bring us those numbers tomorrow thank you. Alibaba is set to report tomorrow morning as well deidre bosa has a look at that hey, deidre. Reporter last quarter alibaba vicechairman addressed trade tensions, what he called the elephant in the room he said that trade talks put alibaba on the right side of the issues on the table and it would actually benefit from Consumer Spending by chinas middle class even as the economy slowed investors will want to know if his tune has changed this quarter, especially as alibaba shares tumbled 15 since may wall street is bullish on the company. All but one analysts on fact set rated a buy or overrate. The stock though tends to trade as a proxy to china. Back to you. Deidre, thanks very much for that we have a news alert on some big investors trading in some stocks the effect it has on the headlines. Hess lee. Reporter hey, wolf, the filings were as of the end of the Second Quarter but interesting findings from app loo appaloosa, upping his stake by about 12 but paring back facebook they were worth about 350 million a piece also upping his stake in googles Parent Company alphabet by 48 , making that position worth about 230 million at the end of the quarter also interesting, Berkshire Hathaway upping its amazon stake by 11. 2 to about a billion dollars, but worth noting Warren Buffett was not the one making that decision. It was another one of his associates guys, back over to you leslie, thank you very much for that crazy day here, morgan down 800 points on the dow. Yes. Thats the fourth worst points decline ever, down about 3 for all of the major indices as the yield curve inverted. There will be so much more on the massive sell off tonight on cnbcs special report markets in turmoil. It starts at 7 00 p. M. As for today on the closing bell were out of time. Thank you for watching. Fast money begins right now. Stocks slammed as the bond markets flashes a major recession warning. The dow handing in one of its worst days of the year as fear grips wall street. So what should you be doing with your money following a day like today . Our team of traders are standing by to break it all down. A special edition of fast money starts right now. And we are live from the Nasdaq Market site overlooking new york citys time squares im melissa lee. Traders on the desk are m