Brian sullivan is reporting live for us from hong kong today. He will join us in a few moments. Behind me you can see the dows action from yesterday shedding more than 800 points for its fourth worst point drop on record, closing down by 3 or so after yesterdays historic move, here is how your money and the Global Markets are setting their day up today stock futures indicating the dow will open higher some stability brought to the markets. Interest rates are a huge part of that market story the dow jones up by 136 points we lost 0800 yesterday. Yesterday we saw the socalled inversion of the yield curve the twoyear treasury note and the tenyear treasury note yields, this means shortterm bond rates are now paying more than longterm bonds, historically this is considered a possible recession warning sign and new overnight, the yield on the 30year treasury, the long bond in the United States, dropped below 2 for the first time ever. You can see right now currently 2. 016 that move lower, all the way here to a historic level we have breaking news from hong kong and Brian Sullivan is all over it. He joins us now with that news brian . Yeah, dom, thank you very much this is unexpected this is breaking right now it came out of the Hong Kong Development and the Chinese Government theyre implementing wideranging and sizable economic stimulus measures to try to undo some of the damage caused by the trade war, by the unrest they also name brexit in here as well some of the issues that are in the middle east. Either way, breaking news right now. Well see if this impacts our markets. Its 5 00 p. M. Here. The hong kong markets are closed its a long document this just crossing from the government of china. As part of the economic stimulus measures, theyre going to be doing things like cutting individual salary tax level, basically taxes on individuals will be cut. Theyll provide Social Security allowances, free rent for lower income residents free kindergarten. The possibility of a Public Works Program as well. Cutting 27 different fees and taxes on various Government Programs they estimate this will be a multibillion dollar stimulus package as well. Heres what theyre saying the hong kong economy faced significant downward pressure in the Second Quarter the situation has turned more austere in recent months Global Economic outlook is darkened by high uncertainties including the escalation of china u. S. Tensions, imminent risk of brexit, geo tensions in the middle east. As part of the rational for the stimulus theyre cutting the growth forecast to 0 to 0. 5 for the remainder of the year. For the First Quarter the hong kong economy came in at 0. 5 it was 3. 5 in recent years. The hong kong authorities are suggesting that hong kongs economy may grow at zero, the goose egg, for the rest of the year thus theyre implementing wideranging stimulus measures the markets here are closed. We dont have a way to see if it helps here it might help our futures it could also be done the futures are dropping right now from what i understand this could also be done not just purely as an economic measure, but also perhaps to placate some of the protesters. The protesters have been wanting a number of Different Things freedom and guarantees on that 50year plan going out to the year 2047. Thats their primary demand. They had a press conference earlier today, the protesters did, in english, where they referenced the economy and some of the slowdowns outside of the unrest caused by the protests and how its impacting everyday hong kongers so this may be done to play say the placate some of those protesters it is 5 00 p. M. Here well see if it impacts our market wide ranging economic stimulus from tax cuts to free rent to free kindergarten and a possible infrastructure plan to boost jobs as hong kong authorities have cut their growth forecast to zero spent growth hong kong, only 3 of the chinese economy, as you well know, its the keyhole to the western Financial Markets. Certainly punches above the weight economically. Well have more as the day goes on for you and the night goes on for us in hong kong. The government building over our shoulder Brian Sullivan, thank you very much for that well hear from you all morning. We want to call your attention to whats happening. As brian pointed out weve seen a deterioration in the futures market in the United States. Now the news out of hong kong probably plays a little bit into that among multiple factors. When we walked in early this morning we saw the dow jones implied open to be just up about 120 to 160 points in that range. And now were implied to open up by just around maybe 30 points or 40 points we did dip negative at one point as well. Well keep a close eye on the futures. There was a move lower, fairly sharply over the course of the past five or six minutes well keep a close eye on that well have Team Coverage from around the world this morning as we look to cover the biggest stories having an impact on your money. Joumanna bercetche is watching the early trading action from europe shes live in london matt taylor is tracking the overnight aslan mian market act. Matt, we start with you. Thank you very much for that. A number of markets are ending the session firmer here in asia. As we saw u. S. Futures rebound you were just telling us about the story now with futures winding back a bit i want to focus on the japanese bond market. Were talking about what happened in the u. S. Bond markets. Safe haven flows into jgbs pushing yield theres to multiyear lows, the 10 and 20year jgbs yielding the weakest level since july of 2016 the japanese market, one market closing in negative territory, off by 1 . Safe haven money going into the yen. Thats always negative for the japanese market. Look at the australian market. It was the worst performer around the region today. Having its worst day in three years strong jobs numbers there perhaps dashing hopes of a nearterm Interest Rate cut from the central bank in that country. China markets is where all the action was the shanghai composite closing higher the fix on the yuan was above the 7 handle relative calm restored to the china market the hang seng was up by close to 1 back to you. Thank you very much for that. Joumanna bercetche now tracking the price action in european trading joumanna, we have seen a bit of negativity there now whats happening thats correct. Its happened in the last ten minutes or so. Some headlines flashing that china are considering counter responses to the u. S. If they do go ahead with those tariffs in december that has actually sent all of these indices lower, just in the last ten minutes or so earlier the theme was one of stabilization. We were trading around the flat line things have turned negative in the last few minutes ftse 100 down 0. 8 this is an index that is oil and gas heavy. Some of the major underperforming names are in that basket. Xetra dax down 0. 6 . A lot of focus yesterday on that weak gdp number. We saw the contraction for the Second Quarter gdp as well as some weakness in some banks because of the move in fixed income also worth mentioning the spanish index is down 0. 6 the italian index is closed for holiday. That gives you an idea for system of the pressure on periphery indices. Lets go to the yield action similar to the u. S. , all the focus was on what was happening with european fixed income the german bund, minus 67 now. This is another new record low anyone watching this, if you track the european banks index versus the tenyear bunds, you will see the two are closely correlated the more this Interest Rate moves lower, the more you see the european Banking Sector get hit. Also worth bearing in mind, we have the gilts at the end at 44 basis points we talked about u. S. Yield curve inversion. The uk market is also inverted, twos and tens is at minus 3 basis points some other things to think about. Spain is within 14 basis points of turn noing into negative territory. The bid for fixed income in europe continues to persist as we see negative sentiment take over equities. Back to you guys Joumanna Bercetche live in london, thank you for that. Lets bring in gina sanchez, a cnbc contributor, and bill zox from diamond Hill Capital Management gina, hong kong has cut its growth forecast. Its taking stimulus measures. Now were getting headlines saying there could be Counter Measures to counter the u. S. Trade tariffs of 10 on chinese goods coming out is this an environment still where you want to be long u. S. Stocks and buying dips as they occur . If you look at how this market has been setting up, a lot of people have compared the selloff to december. A lot of things are different. The tax stimulus has not only happened but it is fading into the distance second you have valuations that even though theyve come off obviously in the last couple of days, theyre still high relative to where they should be you have a fed that essentially with this mid cycle correction has communicated to the world that the recovery wasnt Strong Enough to even get higher than 275. None of that stacks up for it being positive its hard to bring momentum back into the market and get positive now, do we think theres a recession happening . Probably not i think its hard to continue to buy this market right now. Bill, if a recession is not happening, then there should be a reason that we can continue to see risk assets go higher. One thing weve been noticing now throughout the turmoil over the past few days is that high yield fixed income markets have held up well compared to other parts of the market. Is that a sign credit markets dont fear as much as the stock markets do you do have this divergence between what the Government Bond markets are telling us and what risk assets like stock and highyield bonds are telling us. My concern is that that divergence will be resolved in favor of the Government Bond markets which are saying theres an elevated risk of recession over the next 12, 18 months. Bill, to follow up on that, is there anything that you see there that indicates any kind of a duration or perhaps how long it will take for that recession to actually play out given the view on the fixed income the markets and rates . Typically you need to see this inversion the twos to tens i think is the right place on the yield curve to focus you need to see that inverted for about three months gina, if the risk of recession is elevated, you dont think it will happen, but if it does what should you be doing to position for that . Its very rich in the Government Bond market right now. Were already seeing the haven trades play out in gold. Are there places within the equity markets or emerging markets or elsewhere that seem to be attractive to buy on sale . You know whats been fascinating about a lot of this and while i do say that were not expecting a recession there are catalysts out there that could cause a recession dont want to underplay those. There are things that could happen the trade war certainly among them quite frankly a crisis of confidence in the dollar is another. When you take that sort of where do you hide . We have seen gold get bid up we have seen, you know, crazy places like bitcoin getting bid up thats the ultimate bid against currency however, you know, we actually i want to start first on the riskiest parts of the market i think highyield has some resolution that needs to happen. Thats very risky. One place that you can potentially hide in these markets oddly is going to be value. It is so undervalued right now if you look at the value side granted it will still get hit and it will still hurt, in the equity trade we have not seen the kind of divergence weve seen growth to value in a very long time. I think theres a lot of unlocked value in the value side of the market. Bill, before we let you go, what happens to tenyear note yields do we continue to see down side . If so, how far could it go i think over a long period of time the tenyear offers no value. In the nearterm, until the trade issues are resolved to some extent, i think the most likely move is for the tenyear yield to keep coming down. Thank you very much for those market thoughts. Appreciate them. When we come back, much more ahead on the markets and your money, stocks look to recover from the worst day of the year we dig into the forgotten sector, some consider it the life blood of the u. S. Economy plus well head to hong kong and Brian Sullivan yeah, we have some big breaking news here the Hong Kong Government basically saying there will be no growth in its economy this year and they are ins tutituting masv economic stimulus. The futures dropped on that output cut will those stimulus measures, once the market has a chance to dig in, will that turn things around well give you up to date notice on what those measures are, what they hope to accomplish and maybe a change of tone from President Trump about what is happening here in hong kong with regard to the trade war. A lot happening on this side of the pacific ocean. Well bring it to you as Worldwide Exchange retns ghafr isur dear tech, lets talk. We have a pretty good relationship. Youve done a lot of good for the world. But i feel like you have the potential to do so much more. Can we build ai without bias . How do we bake security into everything we do . We need tech that helps people understand each other. That understands my business. Weve got some work to do. And we need your help. We need your support. Lets expect more from technology. Lets put smart to work. Welcome back in. Good morning heres how you and your money are shaping up stock futures now pointing to modest gains nasdaq futures briefly turning negative on that news out of hong kong and headlines regarding china and possible retaliation for u. S. Tariffs right now the dow jones would open up about 28 points. Lets go to Frank Holland with a closer look at one beaten down Industry Group and ask what the transportation stocks tell us about the Global Economy and the Global Markets at large. We know the trucking stocks in general have been feeling the pinch of the trade showdown with china. Yesterday facing more uncertainty as a proposal for new federal regulations for truckers was released. Jb hunt having the worst day of the sector falling more than 3. 5 land star, old dominion also underperforming. Schneider fell 2 . They have lored fu lowered full earnings guidance. Norfolk southern seeing the biggest impact during the selloff, down more than 3. 5 all 20 of the dow transports finishing in the red, including fedex, down 3. 75 . Avis having the worst day, down 7 back to the trucks and the rails. These companies will be looking to the Holiday Shipping rush to boost volumes and rates. Since january rates for truckers have fallen nearly 7 for contract hauls, nearly 8 in the spot market. Deep declines there. A true indicator of the economy and whats going on right now. Still on the deck for the show, President Trump looking to link china trade talks with the unrest in hong kong. Brian sullivan reports live from the region coming up next. First, as we head to break, check out the worst performing sectors yesterday. Financials, energy, materials, Consumer Discretionary well be right back. Take prilosec otc and take control of heartburn. So you dont have to stash antacids here. Here. Or, here. Kick your antacid habit with prilosec otc. One pill a day, 24 hours, zero heartburn. Think you need to pay prestige prices for better skin results . Try Olay Regenerist. The rich, hydrating cream is formulated with vitamin b3 and peptides to plump skin cells, brighten, and visibly smooth wrinkles. In fact, just 1 jar has the hydrating power of 5 jars of the prestige cream. For visible results without prestige prices, try Olay Regenerist with a money back guarantee. And complete your routine with the olay eye collection. Brand power. Helping you buy better. Welcome back to Worldwide Exchange. We want to call your attention to a developing set of stories coming out of the east asia region futures now are indicating modest gains the dow jones would open up by 23 points if these gains hold into cash trading. The reason why is they were up about 150 to 160 points at the top of this 5 00 a. M. Eastern time hour until a pair of headlines came out one, that china has vowed necessary countermeasures to the u. S. Tariffs on 3 300 billion worth of chinese goods that go into effect september 1st. And also, as Brian Sullivan pointed out, that hong kong has now lowered its Economic Growth targets for the rest of the year both of those headlines causing that decline on the righthand side of the chart on your futures screen still to come, buckle up why our next guest says yesterdays dramatic move lower is just the start of more pain to come. But that does not mean there are not bright spots flashing a buy signal hell name names that you need to watch coming up next. First, check out this big number 481. Thats the dowses da daily ave range this month its double the average range logged in the rest of 2019 Worldwide Exchange will be back after this. [beep] you should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. But youre not mad, because you have e trade which isnt complicated. Their tools make trading quicker and simpler. So you can take on the markets with confidence. Dont get mad. Get e trade and start trading today. Dont get mad. Applebees handcrafted burgers now with endless fries starting at 7. 99. And get more bites for your buck with late night halfpriced apps. Now thats eatin good in the neighborhood. All right. Big market morning here. Welcome back futures right now pointing to some modest gains. The dow jones would open up by 28 points. The s p up by 7. The nasdaq up by 3 to 4 points a pair of big headlines coming up here in the last half hour. China saying it may take necessary measures to counter u. S. Tariffs that go into effect on september 1st as Brian Sullivan pointed out, hong kong saying its lowered its Economic Growth target for the rest of the year both of those headlines taking icel out of the market stk here with cnbc well be back after the break. Breaking news. China threatening retaliation if wa washington goes ahead with planned september 1st tariff hikes. Futures dropped on that news its thursday, august 15th youre watching Worldwide Exchange on cnbc. Welcome back to Worldwide Exchange. Thanks for being with us im dominic chu. Brian sullivan is reporting live from hong kong right now here is how your money and investments are shaping up right now as we are halfway through the 5 00 a. M. Hour in new york stock futures are slipping over the course of the past half hour the dow jones would open up by just about 1 point now its slipped into negative territory. The s p 500 is up by 3 points. The nasdaq off by 13 remember, the dow jones closed down by 800 points yesterday the Interest Rate complex, a big driver of that story yesterday as well. Twoyear note yields, 1. 56 , just a hair below that now tenyear note yields, 1. 57 . A hair below that right now. Two basis points separates the yield between the tenyear and the twoyear note. Lets get to that breaking news out of asia two major stories crossing in the last half hour lets get out to Brian Sullivan live in hong kong with the latest over to you. Thank you very much there are, as you noted two pieces of news that are impacting the Financial Markets. Theyre impacting the futures. One is coming out of beijing the other one out of that Government Office building number one, from beijing, china saying that it vows to retaliate against the additional 10 tariffs that President Trump promised to implement on october 1st. He delayed those to september 151 december 15th, but china saying they will retaliate not saying how the second headline that broke is twofold. Number one, the hong kong authorities cutting their growth forecast to possible growth of zero percent for the rest of the year it was 0. 5 . So not a big cut but they acknowledge there may be no more growth for the rest of the year. So theyre implementing a number of wide ranging economic stimulus plans number one, they are changing basically cutting personal income taxes they are waiving or cutting 27 different fees on businesses theyre instituting a fund to help small and midsized enterprises, so mom and pop shops. Then theyre doing things directly to help the poor. Onemonth free rent for some tenants. Onemonth free kindergarten and an additional stimulus to Social Security so theyre instituting a wideranging economic stimulus plan the other rational behind this, they did not say this in the press release, it may be written underneath the headlines, they could be giving this as a playcation to the protesters if you will the protesters had a press conference earlier today in english, i might add, where they referenced a slowing hong kong economy. Hong kong cutting its growth forecast, implementing wide stimulus measures, and beijing saying they vow to retaliate against the additional 10 tariffs. That moving future is down as well a lot of breaking news its very fluid in hong kong its been a quiet day on the protest front. Its not been a quiet day on the diplomatic front well find out if it will be a quiet day on the Financial Markets front in the United States as the hours go on. Well be right here for you. Youre at the center of it. Brian sullivan, thank you very much for that well come to you later on this hour and throughout the course of the day. In the face of all of this volatility, three major factors affecting the markets and your money. A flight to safety, the 30year u. S. Long bond, the treasury yield falling to the lowest level ever, breaking below 2 . Theres trade turmoil. President trump suggesting personal meetings with President Trump xi jinping in china amid the ongoing trade war in hong kong and then theres the fed. Jeffrey gundlach said the fed is too late to stop the next recession. Lets break this down. Joining me now is Christina Hooper from invesco. Craig johnson from Piper Jaffray is joining us as well. Christina, theres been a good amount of breaking news this morning. We had an 800 poinpoint drop ie dow yes, siterday just when you thought things would stabilize, all the gains have been taken out of the market because of these headlines. Is this an environment where you feel constructive about buying stocks as they fall . Absolutely. We have a Proactive Central Bank the fed is doing all that it can. Its made it very clear its taking a dovish stance it stands ready to cut rates more this may not stop an economic slowdown or a recession, but it should be supporti ivive for rik assets do you believe were due for a recession . Credit suisse says the last five times we had this i versinversi its led to recession, so the question is when we are never due for a recession. We create events that cause a recession. Were in the midst of a slow motion accident which is our trade policy but at some point it can be averted it can still be stopped before we see maximum damage so i dont believe that it is certainty that we will see a recession. So much of it will be dictated by what washington and beijing do craig, has there been maximum damage sustained at this point is this 6 pull back in the s p and the dow enough to say its safe to get back in there or are the charts telling you Something Different . Dom, so when i go back and i paint by the numbers with the holistic work we do at Piper Jaffray, looking at relative strength and 4,000 plus stock quhart charts, i looked at the numbers this morning, i have less than 30 of all the stocks in the marketplace in any form of an uptrend. Ive got about 41 of the Industry Groups that we look at that are now at this point in time making a 26week absolute new low. So at this point in time, ill be watching some critical levels on the s p 500 2722 the may june lows of this year, you break below that, it will retest the december cllows were still sitting at a price objective and we have not wavered from that, but from my perspective theres still things that can be done are we going to be getting a recession at this point in time . History says that when you do have the inversion of the yield curve, you do tend to see that happen so if youre painting by the numbers, the odds have gone up i wouldnt say its 100 at this point in time, but you have to be over 50 at this point in time just based upon history christina, craig brings up some interesting points about the total breadth of the market and now there is a shift only 5 , 6 away from record highs, but theres a shift in momentum and sentiment in the marketplace. Is that something that can be corrected relatively easily . Or is this something that takes a while to play out, the negative sentiment weve seen roll over. Weve seen examples in the past year we saw a december selloff. We saw a selloff in june there was a correction that occurred in terms of sentiment fairly rapidly i think we need to recognize what the fed is doing may not help in terms of the economy, but it could very much help in terms of markets thats where weve seen that shift in sentiment to a more positive sentiment the fed engineers the Market Recovery we saw in june. Lets say this, craig lets say the fed can engineer a recovery are there places if youre waking thank you morning saying what just happened yesterday, where should you be looking for some opportunitopportunities . Are there stocks, sectors, groups, markets where you think are better opportunities than others dom, at this point in time, if the fed can come back in, step up and cut rates again, but keep in mind the fed wont have another meeting until september 18th thats a lot of time between now and then to see that happen if we see the fed come in and say cut 25 or 50 pay sis poibasis py or later this week, you will look at technology stocks, Semiconductor Stocks as a beta play at this point in time dom, i have to stress, this is not a solution coming from the fed alone. There needs to be fiscal policy changes and stimulus that gets put in place christina, whats your favorite sector now . Technology. I believe that there are opportunities in secular growth in this kind of slowing growth environment. All right thank you both very much for those thoughts key to this morning, craig mentioned it will be a bank stock issue as well. Getting hit hardest of any other sector yesterday, financials are now in correction mode some technicians say thats more than 10 falling from the havent 52week highs. Joining me now on the cnbc news line is Gerard Cassidy banking analyst from rbc capital markets. Always a pleasure to have you on can you take us through as an analyst how the price action yesterday made you feel . Are the bank now in a situation where theyre generally weaker than the rest of the market . Thank you i would say the banks certainly have underperformed since august 1st which of course is when the president came out with the 10 tariff announcement. When you look at the bank stocks, theyre down from 11 to 12 , versus a general market decline of about 4. 5 to 5 . The flattening of the yield curve is the primary culprit in our opinion of this underperformance. The long end of the curve has come down, that has certainly weighed on the banks profitability, but also affected the stock prices they have clearly underperformed the markets since the first of 1st. Gerard, the point has been brought up, theres a debate out there about how important the yield curve is in any capacity, the difference between long and shortterm rates to bank profitability. Are yield curves important for banks . They certainly are. Actual nominal levels of interest, of course, are important. But as important is the steepness of the yield curve as it flattens, the industrys profitabilities are affected the baindustries have a way of avoiding the flatness. When they drive revenue growth, they are not as susceptible to the flattening one other real importance about this yield curve is that i know everybody is concerned about a recession, and weve seen the evidence that when the two ten inverts, recessions can follow from 11 months to 24 months after the inversion. In the past downturns the inversion comes from the front end of the curve going up, not the long end of the curve going down so you hate to say that this time its different, but i trulyis. Gerard cassidy. Thank you very much for that appreciate it. Coming up, u. S. Futures taking a leg lower in the past hour after China Threatens retaliation if the u. S. Moves ahead with more tariffs on september 1st. Check out how european markets are reacting to this news you can see the dow yesterday moved lower, the cac, dax, moving to the worst ve olelsf the day so far Worldwide Exchange is back after this we might die with. And most of that debt is actually from credit cards. Its just not right. But with sofi, you can get your credit cards right by consolidating your Credit Card Debt into one monthly payment. You can get your Interest Rate right by locking in a fixed low rate today. And you can get your money right. With sofi. Check your rate in 2 minutes or less. Get a nofee personal loan up to 100k. All right. Welcome back to Worldwide Exchange. Futures now indicating what could be a lower open. You may recall if youve been with us for the past 45 minutes the dow was opening up by 160 points at just around 5 00 a. M. Eastern time were showing a decline of about 66 or so points on the overall dow. Big headlines driving that action so far today. That righthand side of the chart shows you just that futures deterioration since about 5 00 a. M. Eastern time lets get out to Brian Sullivan. Hes on the ground in hong kong which Just Announced its cutting its growth target for the rest of the year and that big news out of china saying they could look to counter any of those tariffs happening on september 1st. All that breaking at 5 00 a. M. Eastern time, 5 00 p. M. Here twin headlines from beijing and from the hong kong authorities i want to bring in a guest who knows about protests hes a lawyer here he lived here for 20 years he wrote a book called city of protests about hong kong and the protests do you believe the stimulus measures that were Just Announced by the hong kong authorities were designed in part to try to placate some of the protesters absolutely. Yeah even though they wouldnt say that out loud. The timing, the nature of the measures, theyre aiming to try to settle down the community and win over the population here im not sure that will be successful they did in their 11page release, they did note that 29 countries have issued travel warnings, basically saying to citizens be careful if you travel to hong kong. Do you think they will placate the protesters i dont think they will at the end of the day these protests are about politics, not about the economy. Beijing likes to see things in monetary terms they would like to think early hong kongers were better off financially, and happy with the government but the demands are about politics at the end of the day without a political solution theyll keep coming out. What would you classify the primary demand the guarantee of the extension of that pseudo autonomy until 2027 they would like to be able to elect the chief executive, they would like not have it appointed by beijing like carrie lam was. Thats right. They would like more openness and they are unhappy with how the government handled the last few months of protests they tra transparency from the go men government how do you see this playing out . Xi jinping knows what kind of impact the crackdown here would have on the hong kong economy and the status of hong kong as an International Financial center we could be stuck for a muddling through for the next several weeks or months to come. We saw this in 2014, you had protests just like now, pretty much on a daily or weekly basis from september to december yeah. Can you see this stretching out for months could it be longer than it was in 2014 . In a way i see these protests as a reincarnation of 2014 at the end of 2014 it seemed to go quiet, everyone seemed to have gone away it was just taking another trigger for it to come out again. We might see that happen again the government manages to put a lid on things for now, thing also quiet down. Whether its one year or five years down the track there will be another issue and theyll come out again until the underlying political issues are resolved you expect the protests to continue even with the economic stimulus measures released 45 minutes ago . Yeah, i think so. Dom, at least one expert here who wrote a book on the history of protesting in hong kong says he doesnt think it will quell it the markets are reading it a different way. The beijing headlines about the retaliation on the 10 tariffs are moving the futures as well protesters here have moved markets as well. Lots of factors at play, Brian Sullivan, thank you very much amid this market turmoil and volatility were hearing some of the worlds biggest investors and Hedge Fund Managers speak out or tell us what theyre doing. Leslie picker joins us now to break down that action leslie, the markets have deteriorated you figure Hedge Fund Managers right now, y they hashgs yes, t holdings, but how do they feel about the performance in the Second Quarter its a remarkable phenomenon. In the first half of the year, hedge funds were doing quite well they were higher for the year. Up about 8 on average those are returns a lot of them have not seen in quite some time in speaking with prime brokerage desks across wall street who transact with these head funds, they were seeing hedge funds were deleveraging they wanted to preserve those gains. They wanted to make sure they werent overly exposed to equities in case Something Like this happened. And there was more volatility. As you mentioned, we did get through the 13f filings, those are filings that show long positions for managers as of the Second Quarter, they have likely changed in the six weeks since then, but we wanted to share with you what activists were doing it speaks to the broader trend you mentioned. Activists as a strategy is long and livereevered in the Second Quarter they wer selling shares that they were activists. Third point decreasing stakes in baxter, campbell soup, trian led by nelson peltz paired back holdings in Ppg Industries and General Electric appalossa sold its stake in allergan after voting down David Teppers proposal to split the roles of chairman and ceo. And Pershing Square announced it dissolved ownership in adp and united technologies. That firm disclosed a new stake in Berkshire Hathaway b shares that holding is a passive one, im told ackman is not planning nor could he successfully launch did you to the structure of the b shares a problexy fight against Warren Buffett any time soon. Its not even 6 00 a. M. And we are seeing wild swings. The markets are down right now well keep you up to speed and be right back after this break applebees handcrafted burgers now with endless fries starting at 7. 99. And get more bites for your buck with late night halfpriced apps. Now thats eatin good in the neighborhood. Not even 6 00 a. M. , but were seeing wild swings in the market china threatening retaliation if washington goes ahead with planned tariffs on september 1st. Were in front of the telestrator, well look at some charts Walter Zimmerman joins us now. The s p lost 3 yesterday. Is this the end . Can we buy the dip now no way. If this is a bullish expanding triangle starting here, a, b, c, d, the final e leg down targets 2100 2100 . 2100. Were at 2840 take us through the rational here youre pointing out levels here, here yes why are you looking at those . Why does that mean were going to 2100 . If you draw a line like this, a line like this, you have an expanding triangle this is a bullish this is a bull market correction, if it holds this line. And depending upon how fast this final leg down goes, depending on the trajectory, youre talking plus or minus 2100 this larger pattern is textbook perfect. Each one of these legs is perfect. So this is an astonishingly surgical precise pattern but if its not an expanding triangle, then its a broadening top. One, two, three, four, five. The measured move of that is 1200 so either its going to be bad or its going to be really bad so, lets point this out. If it goes down that far, thats a massive move lower is there any indication it would go down that low how long could it take to get there. I think theres three background points here one, china is done being bullied and humiliated on the world stage. Those days are long gone number two, youre talking a bambi versus a godzilla fight. The fed will be outgunned. Number three, the last trade war designed to protect american jobs turned out to be a cornucopia of unintended consequences like the global trade war, the fall of germany and everything that followed from that. So the background issues here are not small, theyre not minor, theyre not easily repaired so, walter, weve got a little bit of time left. Well watch what happens in the markets here for the stock side of things. Lets bring up the dollar and currencies the pound is also a huge focus because of whats happening with brexit take us through what you think will happen with dollar versus the sterling i look at it in terms of dollars per pound. That targets parody. Wow that is 0. 95, a little worse than parity. If you look at pounds per euro were at 1. 21 in essence now. Right youre saying we can get down to one yes should i book my scottish golf vacation or wait i would wait. Your money will buy more i think the background story to this is this illusion thats been perpetrated that a Nodeal Brexit will have no consequences the chart patterns tell a different story. The chart patterns tell a story of severe consequences ive had this parity to 96 target for years i was wondering what the heck kind of problem is the yield getting itself into that would justify that kind of trashing of the pound. I think we have that now in the Nodeal BrexitWalter Zimmerman, thank you very much for those thoughts on stocks and the pound that does it for Worldwide Exchange. Lots of market moving news squawk box picks things up it begins right now. Good morning looked better earlier, now the market is back in turmoil. The dow dropping 800 points. The fourth largest drop of all time in points about 3 , not up there but well show you how global stocks are responding. The bond market signals a recession could be around the corner well tell you what it means for the feds next move. And beijing threatening to retaliate if the u. S. Hikes tariffs on september 1st that caused this mornings 200point swing in the dow futures a live report from beijing. Its thursday, august 15, 2019 the ides of august squawk box begins rite now live from new york where business never sleeps, this is squawk box. Good morning welcome to squawk box on cnbc. We are live from the Nasdaq Market site in times square. Im becky quick along with joe kernen and andrew ross sorkin. Our top story is reaction to yesterdays 800point selloff for the dow. Throughout the hour well show you the hardest hit sectors, everything from retail to the banks. Financials were down more than 4 lets check out the u. S. Equity put ch features things were looking like they would improve earlier this morning but that changed were back in negative sentiment again. The dow down about