Transcripts For CNBC Closing Bell 20240714

Heated tone from the u. S. And china. Financials, semis and industrials are all lower and full Team Coverage coming up dom chu is tracking it phil lebeau with details of on headache for boeing. Market down 333. The low of the session 425 down. The dow higher this session down 205 and red throughout the session as you can see sharp selling. Lets bring in Rebecca Patterson with us for the full first hour of the show. Good afternoon whats the spark again for the selling . Last week a nice end to what was obviously a negative month of august. I think what it boils down to is its not about the cost of capital. It is not about the level of Interest Rates, the stimulus it is the confidence to spend so we can make Interest Rates as low as you want but if you dont have companies and households to borrow and take that money and buy something with it, whats the point . Thats the conundrum we saw it in the trade rhetoric today. It is eroding confidence thats driving us right now. Can the fed or Central Banks in general save the day pushing rates lower . My view is they wont or they cant. If the world stays as it is right now with unemployment rates low, consumers decently strong it is unlikely that banks meet aggressions and if Central Banks have the catalyst to ease aggressively, then earnings come down a lot so i think either way however this proceeds the upside for equities is getting more limited. Im not bearish. Im underweight equities modestly but this is a squishy place right now. And i prefer just keeping my risk low all right lets dive into the selloff. Dom chu has more morgan, picking up on what rebecca said, the risk on, versus risk off trade, the dow, the s p 500 and nasdaq, theres a general rick aversion trade happening because stocks across the board are selling off. The russell 2000 Small Cap Index is far outperforming all of them there was a school of thought small caps were where you wanted to be with less exposure to china and then in an economic downturn small caps hit worse and perhaps playing out more today. Whats working and whats not . You suspect that in this environment less economically sensitive sectors outperforming and be right there all in the green right now meanwhile technology is taking over the worst performing sector in the s p perhaps a Silver Lining. Looking for a positiveish spin on todays market, yes, treasuries are bid etfs are higher. Whats holding up are Investment Grade Corporate Bonds and what is underperforming by a hair are junk bonds or high yield and by no means selling off like crazy so if you try to figure out if the stock selloff trans lating into higher risk bonds it is not yet for now, well see if that changes, but perhaps a Silver Lining in todays selloff. Thank you very much the latest round of tariffs kicked in over the Holiday Weekend and kayla is in washington with more on the latest trade war. For 112 billion in chinese goods leaving ports over the weekend got 15 more expensive depending on who shoulders the cost here an could have been higher President Trump wanted to double tariffs learning of china retaliating with tariffs in u. S. Goods. That led the treasury secretary and the u. S. Trade representative to get ceos on the line to call the president and explain the dire Market Impact that would have resulted. What happened instead . 5 tariff increase anoupsed by tweet on the evening of august 23rd with the schedule to escalate, theres questions of how and when the tensions can dissipate. Trump says if hes reelected hell be even tougher on china morgan thank you turning to brexit. Wilfred has been tracking this and has more on whats going on in the uk. I do. At least as much as i can say at the moment Parliament Due to vote any minute on a key motion with another set for tomorrow morning. The first would take control of the legislative timetable from the government and hand it to mps. It could block nodeal brexit. The votes will be close but it is execed that with the Prime Minister will lose tonights vote if he does, it is highly likely to then seek an election rather than allow his hand to be tied though that does require a two thirds majority the election does which is by no means guaranteed sterling dipped 1. 20 earlier today. Due to the uncertainty of who might be in power when brexit happens. The vote expected, morgan, very soon indeed. Given the fact of a series of steps over 24 hours, what is the significance of the outcome of that vote tonight and carry over to tomorrow . So the outcome of tonights vote is significant because its likely tomorrows would follow almost exactly the same path both of those tonights first and tomorrows go against the Prime Minister, his hands have been tied. And he would likely then seek an election i think if we do start to head towards an election and by no means guaranteed, markets wouldnt like it on the one hand you would have a prospect of a Boris Johnson led government wishing for no deal or Jeremy Corbyn business government on the other side uncertainty prevails and markets dont like uncertainty. Thank you well continue to watch them well, boeing is a biggest drag on the dow today following a report of another potential set back for the 737 max phil lebeau is live in Niagara Falls with more on that. Phil reporter this report of the wall street journal gets at the heart of something simmering for months, tension between the faa regulators and other countries they all want to have a different view of whats going on with the fixes for the 737 max and this calls into question the timeline that boeing has laid out for bringing the max back into service. Boeing has said by the end of september well expect to efil for certification and said they will approve the recertify the plane shortly after that and then we could see the 737 max back in service by the end of the year take a look at shares of boeing because today a lot of people are saying, are we sure this is going to be back in service by the end of the year . American said over the weekend they bumped it from the schedule until early december united last night bumped it to december 19th. Keep in mind the dates that have been thrown out, those are the best guess estimates from the airline. They have moved them several times. Would not be surprising to move it again back to you. Phil, does this have implications super longterm for how planes are approved in the future reporter yes. Longterm negative impact on boeing and airbus . Reporter absolutely. You can bet that all regulators will be much more strident about making sure that the airplanes as they go through the approval process that they have checked the work of the regulators and those who have been deemed who have authority for certifying the particular part or a part of the program theyre going to be much more scrutinized in the future. Thats just the fall yacht frou 737 and all manufacturers. Live shot of the day right there. Absolutely. We are discussing bioing with an analyst later in the show phil, thank you very much. Now the Broader Markets. The nasdaq and the dow and five of s p 500 sectors all down more than 1 . Lets bring in barry knapp good afternoon to you. Thank you for joining us what do you make of the pmi data this morning does that change how bearish you are in terms of the outlook . No. Confirmation of what we expected really, where the fallout from the trade policy is really manifested itself. If you consider the headline falling below the line of 50 orders falling to 47ish, employment falling to that level and export orders down around 43, this is a really just realization of the big mix shift in growth thats taking place over a year. The thing that most economists and the fed got completely wrong in 2018 was that the tax cuts and jobs act did create a supply side shock consumption barely budged from the last fouryear trend rate of around 2. 75 investment led by almost 6 . Structures bounced for the first time after a 30year down trend and really good news a surge in productivity. Noninflationary wage growth. All these things were really it was an excellent mix of growth its completely reversed, particularly in the second quarter. So growth is still running at 2. 5 but now its driven by consumption rather than investment which is falling back to the last tenyear trend of 3. 5 and it may even be created the inflationary impulse of a pced. And why several of the regional president s dont want to cut rates that threemonth rate of cpi analyzed, 2. 8 led by housing. Thats a sector that was exhibiting a phillips curve this cycle so youre getting this deterioration of the mix of growth an its all because Capital Spending plans, Business Confidence, surged in the aftermath of the trump election, pcja, easy for me to say, and have now completely reversed the entire rally since the escalation of the trade war. So to me all of that good that was done on the supply side of the economy is at risk of being completely mitigated by the trade war. Rebecca, i see you nodding your head a little bit. Barry mentioned the indices and the Business Confidence surveys. I think theyre so important to watch not for the headline number but the sub components for a leading indicator. Export orders is an example. The Service Sector data is what im watching the most closely right now because its held up but what we saw for august is if you look at the g3, the three biggest developed economies, Service Sector pmi fell to a threeyear low and the leading indicators are also going down it is still positive, seeing growth and looks light Early Warning signs to get pulled down, as well. If that tips further then the recession fears are more and more justified. Barry, just quickly, if you need protection where do you get it from . If its not bonds, what are the Asset Classes or particular stocks you want . First of all, i mentioned in my preinterview notes, gold and yen. Those are tough trades im an old equity derivative person from the 90s downside skew or the price for out of the money puts is not expensive. To me, if the equity market were down 10 and those measures extremely elevated then we might get to a tradeable bottom but right now you could still trade downside in s p 500 options, buy vix, vix futures, vix options. All of those things are reasonable from here i dont believe that this risk off event will be done until we get the significant extremes of vix at 30, for example. Barry, thank you for joining us much more with rebecca still to come bank of americas sentiment ipd kay or the with a buy signal now may be a good time to buy. Up next, mike santoli looking at a hidden benefit of plunging treasury yields and as we head to break, heres a check on thedata tracker ism manufacturing tracker missing expectations and contracting. First time in three years. And Construction Spending below estimates up just. 1 in july. Closing bell will be right back after this break. I can. The two words whispered at the start of every race. Every new job. And attempt to parallel park. electrical current buzzing each new draft of every novel. typing clicks the finishing touch on every masterpiece. newborn cries it is humanitys official twoword war cry. Words that move us all forward. The same two words that Capital Group believes have the power to improve lives. And that, for over 85 years, have inspired us to help people achieve their financial goals. Talk to your advisor or consultant for investment risks and information. Welcome back we have got 43 minutes left to trade. Down 315 points on the dow its been red throughout the session. Down 1. 2 on the dow over to mike santoli for the market dashboard. Heres what we have ahead here money for nothing. Thats what some corporate borrowers enjoying right now play for today not a lot of investors paying up too much for future growth thats a valuation measure to hit. Hold on loosely. Thats what the stock market seems to be doing. At least for now and then dont dream its over that being the economic expansion. So first, money for nothing. We talk about the collapse in treasury yields as a potentially bearish sign for Global Growth and for risk appetites look at Investment Grade corporate yields we are close to the lows for the cycle right now. This is as of thursday at 2. 8 so that is the index of Investment Grade corporate debt. It is at a lowest of the segment. Theres been a rush. Companies are hitting the bid on the market right now 40 billion in corporate debt on ear effort for this week the markets reopen after the august holiday, that refreshes a Balance Sheet and a net positive for Corporate Cash flows however, ill say that the market is discerning because you look at the lowest of junk bond rated bonds and those spreads are gapping out like c and ccc and getting more selective the market is just throwing money at you and companies are taking advantage of that,. I want my mtv i know where the theme is going today. I mean, i love a bit of with all the volatility, could have gone for sultans for swing, too. Thats pretty good. Thank you very much. Rebecca, the chart that mike just showed, we were having a conversation to start the hour, right . The fact that companies are issuing debt does not make me feel good right now. What i wish mike said instead was companies are taking the low rates and refinancing and pushing out maturities and getting the Balance Sheets stronger rather than leveraging more i know both go on but corporate debt levels going up right to me is not a comforting thing. The credit spread aspect is not flashing a warning sign. With the chase for yield. Once you get the u. S. 10year below 1. 5 , we are seeing foreign and domestic investors buying corporate debt, Investment Grade just to pick up the little extra yield theyre taking the credit risk and the Duration Risk for a better return. To your point if you need an indication of thats playing out, the uk 10year hit a record alltime low today. Right a perfect example. Italian 10year bonds, greek 10year bonds. They dont reflect political realities in the country. After the break, apple trading lower with the Broader Market today one firm i should say just laid out how much the latest round of tariffs to cost the company. Well speak with the analyst behind that call tell him were flexible. Dont worry. My dutch is ok. Just ok . in dutch tell him we need this merger. in dutch its happening. just ok is not ok. Especially when it comes to your network. At t is americas best Wireless Network according to americas biggest test. Now with 5g evolution. The first step to 5g. More for your thing. Thats our thing. Servicenow put our this changes everything. Youre right sir. Everything. No not everything, i mean youre still blatantly sucking up to me gary. Brilliantly observed, sir. Always three steps ahead. Six steps ahead. Sixteen. So many steps. You done . A million steps ahead. Servicenow. Works for you. Love it. Love it. Keep it plays, guys. Welcome back to the closing bell. We are selling off little bit of impetus in the last ten minutes low of the session down 425. Word of the street a bullish note on semis. Outperform they say that lam research is too quality, too cheap and too prime for a snapback to ignore and sees trends at kla the stocks up over a percent. Bernstein upgrading pvh execing them to meet or exceed expectations after the company lowered the 2019 guidance and the tariff guidance in the guidance the stock down 2 today. Longbow Research Without a note on apple seeing a potential 20per share impact from china tariffs. The Firm Maintains a neutral rating on the stock. Apple down today joining us is the analyst from the note here at post nine thank you for joining us how did you get to those numbers . Based on tariffs that just went into effect this weekend. So that is those products, the airpods, the watch, the beats, the other home products, lower gross margin product backing into kind of what the impact would be is 19 to 20 cents. So apple, you know, 12, 13 of earnings power can eat that up but with the iphone in the falll thats the bigger problem. Your estimate are higher than some and people suggest the components from china are very low cost relative to the price how have you got to the estimate there is it was a blended average. Some higher and lower priced models but if were looking at a 750 price point and going to sell 185 to 195 million units, 35 in the u. S. , thats disconnect also a 15 tariff initially. So if that 15 comes into effect in the fall it is about 80 cents of earnings power. And thats just something that apple cant stomach. It has to pass it along to the consumer. We can talk about tariff impact and u. S. china trade impacts with apple but the tech sector, a worst performing in the s p again today, a lot of semi names that are leading lower, as well. We were just talking about it during the commercial break and enjoying the dire straits. With semis theres a great longterm story. In the years to come well have more and more con tept in everything from consumer goods to autos but in the short term between the trade war, between the slowdown that seems to be spreading, its hard to catch that falling knife in the short term you see that longterm opportunity there. It is the question of when do youget in . Just to wrap this up. Where do you stand on apple right now . Do you have a price target we dont. Okay. Well leave it there great to see you. Still cotom here, we have your last chance trade. Bioing with a hit today on serps of the 737 chance and an analyst said that the company is still taking steps in the right direction. Hell lay out the bull case coming up. Heres a check on commodities. Trading lower today and nat gas with a pop gold and silver higher as traders look for safety. Closing bell will be right back we have 30 minutes left of trade. The dow down 300 points. Weak manufacturing data here in the u. S. Fuels recession concerns once again and hit stocks hard. Trade pessimism as a more heated tone comes from the u. S. And china on tariffs and chips, industrials, financials weaker time for a cnbc news update with sue. Hello, everyone heres whats happening at this hour residents of freeport in the bahamas ventured out for the First Time Since Hurricane Dorian battered that region. At least five deaths have been reported it is the most powerful hurricane ever to hit the bahamas. Wcau meteorologist crystal clyde is here to talk about dorians path up the east coast yeah, sue hard to look at the pictures of the bahamas. Talk about the track now it is moving away from the bahamas and the latest track forecast keeps the intensity at category 2. Tropical Storm Force Winds following it up the florida and georgia coastline and closer to charleston and east and they have the biggest concern for Hurricane Force wind potential and storm surge. Those are the areas to watch thursday into friday thats the latest. Sue . Thank you so much in fact, North Carolinas governor royce cooper is taking no chances with dorian he says shelters are in place along the coast but keeping people safe is his main responsibility. Later on today ill be issuing a mandatory evacuation of all Barrier Islands in North Carolina we know it takes time to get people off of these Barrier Islands so we want to begin the process now. We are watching dorian. That is the news update this hour morgan, back downtown to you. Sue, thank you for bringing us the latest on the storm. We have 28 minutes left to go the dow is down 300 points dom chu has a check on the biggest movers at the New York Stock Exchange all right you mentioned the 300point drop in the Dow Jones Industrial average. I want to show you four stocks because think tier ones that are dragging the most in terms of points off the dow boeing, Goldman Sachs, home depot and United Health. Boeing dragging about 65 points. Goldman sachs 35 and home depot and United Health dropping by maybe 25 points a piece. So from a kind of fast back in the envelope math stand point the four stocks represent half of the losses in the Dow Jones Industrial average right now there are two market winners, Procter Gamble and pfizer. Seven to eight stocks collectively adding 20 points. Four stocks taking 150 points off. Eight stocks adding 20 points. Decidedly down day like wilfred said, we are down 425 at the lows. We are down 300 now. See if that sticks to the closing bell. Thank you very much lets get to seema for industrials trading today. Stocks in the industrial sector hitting new intraday lows after the ism data showed the u. S. Manufacturing sector contracted the first time in three years and it adds to the concerns about the health of the u. S. Economy which so far has been a source of strength for a lot of these construction related names. While september is historically a back month for the stocks, the concern is that this month is particularly challenging as u. S. chinese officials struggle to confirm a date for the trade talks and those with exposure to china are trading lower. As are the defensive names and in recent days trading better than the Broader Market. Guys broad based selling thank you. Lets send it over to mike santoli for the second dashboard. Calling this one play for today. Trying to get a glimpse of how much of todays stock market value requires future earnings groe growth this is a calculation of those at citigroup to find out how much of todays value is supported just by current level of earnings. If earnings are flat, how much of todays value justified this is the blue line. Basically showing you 75 of the value of todays market is really just about todays reported current level of earnings about average. Basically means the market with average longterm Earnings Growth and what you see here is the Forward Return of the stock market when you have had the valuations at this level its positive in general so its not so much saying that the market is cheap right here but essentially it doesnt take demanding future estimates to really justify where we trade here late 90s, really expensive. That means the market was very, very cheap we are right in the middle there in the neutral zone. The course of on the way to the recession determined by if this is too expensive or relatively inexpensive. Thank you well discuss whether equities with a buy right now despite the selloff today, bank of america bull and bear indicators is showing a buy signal lets bring in the sat gitrateg behind that note jared, this is a sort of contrarian buy signal and its suggesting clients should be putting money into equities. Thats right. It is a contrarian indicator, broadest measure composed of 18 different inputs from large and small investors and what it tells us is that investors are bearish right now. This is a low we havent seen since the start of the year. The indicators has fallen over the last weeks and tells us that when investors are this bearish, it is a great time to buy risky assets like stocks and commodities. Great time to buy those risky assets on what a tenyear time horizon . Tendaytime horizon . We are looking at a one to threemonth time horizon we are working that into the outlook. For the rest of 2019 with this much policy support well get the ecb move this month and then investors are so bearishly positioned as i say historically, significant upside, around average 6 returns. You know, when sentiment is this bearish. Jared, one of the risks you actually identify in the note if the bond bubble bursts causing rise in yield. We are in a bond bubble . Well, i mean, look. This is one of the most hated rallies in history up 15 or so in the s p 500 year to date. Were within a few Percentage Points of record highs at the same time that prices have rallied so sharply you have seen 200 billion of outflows out of equity funds this year and huge inflows into bond funds. People are bearishly positioned. They hate the rally. Theyre not ready for upside the riskier move for investors is upside and beyond that point. If you see continued inflows into bond funds theres the risk that some exogenous shock could cause pain on wall street to affect the broader economy as theres so much crowding into treasuries, especially the longer dated part of the yield curve. Im going to simplify what you just argued for there but buying the short term and as a longterm investor, is it worth playing in the short term . We are trying to take in Capital Gains to encur in and out of the market so i tend the look at things more long term but i think the point jared is making and the point mike made earlier, earnings expectations have come down so thats good news right . People arent euphoric or over the skis in terms of what they expect the downside without new bad news or catalyst is limited. But the question is even if you have the valuations of positioning whats the catalyst to take us higher . The fed may cut. The ecb probably cuts but is that already priced in is confirmation enough to be the catalyst to get us higher . Jared, thank you for joining us. Thank you. New delays could get the boeing 737 max planes grounded throughout the busy Holiday Season but thats not worrying an analyst hell join us on closing bell next to break down his call on thstk adg wne octrindo today keeping the night interesting, is all about setting the right tone. Lower carbs. Lower calories. Higher expectations. 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Josh tech is one of the worst performing sectors in todays trade. Check out apple in the red popular wearables targeted in the latest round of tariffs. The Consumer Technology association saying the tariffs are going to impact 52 billion of Consumer Tech product so thats everything from speakers to drones to cameras the semis also trading lower in addition, analyst point to recent data from the Semiconductor Production association showing sales dropped 15 in july. Back to you. Josh, thank you lets bring in Contessa Brewer for more on the drop in casinos stocks. August gross gaming revenues declined 8. 6 . It was against tough comps from the Previous Year and continuing softness in the vip segment and the hong kong protests didnt help take a look at wynn suffering the most on the day down 4. 5 . Mgm following suit and Las Vegas Sands and melco resorts. Consumer discretionary stocks getting hit with recession worries. Look at el dorado down now 7. 5 on the day penn, boyd and red rock in the red. Morgan thank you boeing shares are down nearly 3 , worst performer in the dow right now. The wall street journal reporting that new delays in the 737 max could keep the planes grounded through the Holiday Season lets bring in jim corridor. Jim, thank you for joining us today. When you see reports like this, we know boeing has continued to sort of maintain beginning of the fourth quarter, the architect back online, are the companys estimates too ambitious right now . They gave an estimate that the bestcase scenario at the time they said it. I think most recently august 7th expecting the plane to come back at the beginning of the fourth quarter. May see pushback on that time line but the fact of the matter is hearing that regulators are pushing back against bioing thiss a healthy give and take to have the flying public more confident that when the planes are recertified that theyre safe. Is that the reason you have a buy rating on the stock . Well, our target prices are based on 12month time horizons and a year from now youll see a different picture. Coming back december or early january . Were not certain. The plane will come back, deliveries will start flowing again, start to clear up the 4,400plane backlog for the 737 and start to fix their financial position so when we look at the company a year from now it will be a better picture. These incremental delays, does that hurt boeings stock price more or Certain Airlines stock price more i think its a death by a thousand cuts for boeing boeing is hiring in anticipation of the stock coming back stock pops theres a constant news flow where the stock moved up and down on each positive and neative news item and a continue wa continuation of that we think theres more traction to the upside. Jim, just to shift gears a little bit, ginn the fact of the industrials sell off and sell off pretty across the board on the latest with u. S. china trade talks, are there buying opportunities here yeah. There are. The economys not coming a stand still. Investors have reacted to worries about the recession and Consumer Confidence coming down. Theres a bear case but a good time to buy stocks certainly not a strategist but in terms of industrial coverage i think theres names undervalued, particularly aero space and defense. We think that ecommerce to drive Companies Like fedex and u. P. S. To do well and stock pickers can do well and stocks that are still going up despite the Overall Economic climate. Where do you stand on industrial space at the moment we havent been locking at the space very much for quite a while. Because of the trade fears . Partly but the point is so spot on that you get dispersion. Im so glad you asked that question there are Companies Even within sectors beat up that if you can take a slightly longer horizon you get great value. Jim, a final boeing question. You mentioned the back and forth might help the consumer image of the plane. Are there surveys of whether the consumers are familiar of the planes name and make to get back on to it . I think the perception is that customers are on edge with feelings of safety of the plane and recertified by the faa, global regulators, there will be a push to reassure the flying public that the planes are safe, certainly hours and hours of flight time with the planes back in the air to gradually convince the public that theyre safe and fact of the matter is flying united airlines, american or southwest, you dont have much choice in what plane they fly an theyll want to travel and will fly the planes again. Jim, thank you very much for joining us. Thank you. We have had a decreent mini rally. The dow down 1 . S p down only. 60 we have your last chance trade. Later, a former walmart u. S. Ceo about the decision to scale back sales of ammunition , etfs n follow an index, but which ones target your goals . Its not about quantity. Its about quality. No trendy stuff. I want etfs backed by research. Is it built for the longterm . My reputation depends on it. Flexshares etfs are designed and managed around investor objectives. So you can advise with confidence. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Stand up if you are first generat crowd cheering ent. Stand up if youre a mother. If you are actively deployed, a veteran, or youre in a military family, please stand. The world in which we live equally distributes talent, but it doesnt equally distribute opportunity, and paths are not always the same. Im so proud of you dad. [man] i will tell you this, Southern New Hampshire university can change the whole trajectory of your life. uplifting music you should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. Welcome back we are down 270 points on the dow. Rebecca, what is your last chance trade im going to stick with u. S. Large cap and tech find the tech names less exposed to the trade war the clouds, payment, enterprise software. Not overvalued . Clearly they have had a wind in the sails for a while. Not cheap by any means. But you might get an opportunity because the trade war for the whole sector to go on sale and get the companies at a better valuation. To that point, the fact we havent seen fang really sort of lead the rally for the market this year more broadly, what do you make of that do they need to get in the rally Mode Technology is a big part of the overall market so its very helpful if theyre doing well to lead but i dont think you want to focus just on the fang and more to tech than the specific names. Again, if we break it down to things like payments, things like enterprise software, theres really Good Companies less exposed and maybe less loved and might have more opportunity. Lets get to the trade closing countdown. Excuse me. We have 6 30 left in todays session. Joining us now to trade the close is bill borak. Thank you very much for joining us you have been having a look today at the manufacturing pmi and how that played out in the markets. You cant ignore this number, worst one since february 2016. New orders, those continue to slip so it doesnt give clues to turn a corner. Im wopderring how to trade this looking at copper, the charts not pretty but down 245. Bounced off 248. Looking at this, last time that the manufacturing data was this bad february 2016 copper was just above and trading around 2 so you have an ugly chart pattern. Copper out of the november election 2016 consolidated in a big rally. Thats a shoulder and then the right shoulder being built around the First Quarter of this year thats a bearish pattern i think this thing can go 15 lower. And again this manufacturing data is alluding to copper going lower. How can i trade this with the equity market . Looking at the s p, theres support back to the august 28th close in the s p at 2890 going through there with decisive volume theres 2 copper could drag the s p down those are the two levels as the week unfolds to watch. All right in terms of china u. S. Trade, i imagine thats a big part of whats driving copper prices how much is china specifically and the fact that it could be another one of the early signals about slowing Economic Growth more broadly around the world . The deteriorating Global Growth is nothing new. We have seen the data of china to germany and now the u. S. Lower and lower so im looking at new orders. We need to see that stuff show a light at the end of the tunnel but we are not seeing it the u. S. And china trade getting worse day by day getting the surprise news, it is just jawboning and i dont think theyve reached any progress on the real substance of the issues. What is your take looking at that commodity sort of moves whether its oil and copper down is that a sign of bearishness for you . Yes, it would but just remember that august is an illiquid time keep in mind that some of the degrees of the moves in recent weeks and this week and next week are exacerbated by hat. You should Pay Attention to that but keep in mind that the liquidity plays an Important Role right now, too. Moves in both directions. Gold and silver, particularly silver, rally over a past month. Silver is a fraction of the gold market. It can send you an unintended signal if you dont take that in mind. Bill, joining us. Lets send it over to mike for the third installment of the dashboard. Market is able to hold on loosely but not let go its got some traction in the last hour. Even earlier today at the lows we didnt get that much Downside Movement New York Stock Exchange. It is not all that negative given the fact that the s p was down more than 1 . Look at the one year of the s p 500. You cant notice todays drop. It looks like the same kind of sloppy choppy trading range we have been in for a little while now and almost exactly at the levels of a year ago and i think the fact to held in the s p a couple to 3 above the august lows in the index even as treasury yields made a new low and the dollar is also rising probably says the market is trying to get the traction and also more new highs than new lows and many defensive groups like utilities and staples lets get out to chicago with rick santelli. Thank you, mike a twoyear note chart, see its hovering at 146. Look at a june start of 2012 for 10year note yields. See the bottom we are flirting with that. We got down in the low 140s. The curve not inverted but they are flirting with a new low close. Finally, making fresh 28month highs. Now bertha at the nasdaq a double whammy. Yeah. The tariff selloff, the usual suspects, are leading us lower apple and a number of its chapmakers as they face the prospect of 15 increases for this month meantime, amazon among the fang names is bucking the trend, up in terms of the price target to 2,600 meantime, kla and led them to a new alltime high along with pepsi and roku dom, if you take out xl or take out kla you have a home trade here people hunkering down. Yeah. Bertha, that whole theme that you are talking about is playing out here at the New York Stock Exchange certainly, for many of the listed stocks here but overall, look at the s p 500 versus the s p 500 mid cap index and russell 2000 and you will see that the outperformance remains with the large cap stocks in the s p 500 performance. Kind of places the themes you have been talking about. Also check out one of the real winners in todays trade overall and that is the gold miners. Etf right now certainly heading higher up. I will say this before i let you go watch whens happening with oil and Gas Exploration production companies. Trading higher all day catching some traders attention. That does it thats the closing bell. If you are just joining us, good afternoon very warm welcome to closing bell. Im wilfred frost. Im Morgan Brennan in for sara eisen with mike santoli first trading day of september, finishing in the red though off the lows of the session. The dow finishing down about 283 or 1 . The s p finishing down about. 7 . 2906 nasdaq also finishing down 1 . Small caps and transports were the big underperformers. Joining us is Rebecca Patterson is still with us along with maddy dezner at jpmorgan wilf, to sum up Market Action . Bearish day three senior citizctors on the. But just going back to ricks report and the intraday charts on the yields, such a bearish negative open to the trade with some record alltime lows for various european nations dragging u. S. Yields down and where we ended up could have been a lot worse mike, yourtake on exactly that where we did end up . Still down a lot but off the lows. Not down tremendously in terms of where we have traded in the range. We closed above wednesdays close in the s p 500 and actually not much of a net loss after 10 00 a. M. When we did get that ism report so i think the market the big story is the market after august which was so kind of exhausting and choppy and volatile and so yurrounded y so Much Negative anticipation that we have almost braced for what were getting in terms of data so far and a fact that september tends to be a bad month. Is it enough to have negative september. And say that its probably not enough we have managed to hold up here even treasury yields made new lows. The fact to see utilities, real estate, Consumer Staples, safe haven sectors finish positive, make sense to you . Yeah. S p overall we are rich but not excessively rich but going under the hood and look at the sectors, some do feel incredibly rich to me we have the big brexit stuff, wilf, that you have been talking about affecting sentiment globally including the u. S. And i would keep a close eye on sterling because it affect it is euro and the dollar. Chinese y you yuan is not helping, either. When the euro and sterling goes down, it drags down china also and all of those things together push up the dollar like a toost paste tube being squeezed. Theres head winds for market and the month might see monetary stimulus again is that enough to help stocks once again no. I dont think its enough. I think three key things supporting equity markets here number one, Monetary Policy and fiscal policy. Also lower bond yields which can support higher multiples and then the third thing is the u. S. Consumer which continues to be strong here, 70 of u. S. Gdp we continue to see the growth even with releases last week thats supports for the u. S. Equity markets here. The fact we saw another multiyear high here from the dollar index, the strong dollar, are we hearing about this from companies in terms of earn wings the Third Quarter null berhes . We will see it impact earnings and the key thing is the yield curve so we see more buyers coming into the long end of the yield curve and dont need to worry about hedging the currency and the cause of the anchoring effect of the yield curve more so than concern of recession their fears. More corporate i was just curious on the fiscal policy. Theres hope germany will do something. China at the margin. Where are you seeing fiscal stimulus coming through . I think its mostly china that we expect to see major fiscal policy coming through not so much on the property sector but other areas of their economy and i think thats the key thing thats going to lean against the trade rhetoric so china sees some support here from that. On the outlook, more Corporate Executives sounding off. Stephen scherr with an interview saying that the Market Sentiment suggests a recession despite underlying data saying it may thwart the strong data and bring about a slowdown well worth reading the translation of the full original article and headlines initially suggested a bearish outlook and i dont think it was a positive outlook but more about if this continues then confidence can start to be a self fulfilling negative to markets but we are not there that. The read of clients and corporates and pretty accurate people have hunkered down. Can it become self fulfilling . Probably takes Something Else besides people not being all that excited about the outlook. To that point, we have had bad manufacturing data today slipping into contraction territory here in the u. S. How likely is it to hit consumers here or are they protected . They have been doing pretty well and whens troubling to me is august pmi Business Confidence surveys we did see the g3 biggest economies declining to a threeyear low in the Service Sector still positive and growing but its slowing and if that were to continue that would be manager that would be quite concerning i think what could go the other way . To the point on stimulus what could turn it around what could be a catalyst big china stimulus, i dont think likely but maybe, german stimulus, they arent likely to do it but if they change their mind, if theres a recession, pull trigger, that turns europe around like that brexit, you tell us what will happen there. I dont think you get a positive catalyst in the immediate term, maybe six months out possibly the thing on germany, though, is, does it turn the eurozone around you wont get the politicians of germany approving spending to help the Southern States but only to help domestic germany. The problem for germany is its not bad enough. Zero growth or minus. 5 wont spur fiscal stimulus that would have a trickle through effect to the rest of europe. Ginn all of this uncertainty, given all of the discussions that we can have about the Macro Economic outlook, whats an investor to do for us its about maintaining exposure to equity markets and preserving the upside capabilities we buy options to preserve that upside and limit the downside rick we think its a little too cute to try to call individual sectors. We like broad balanced exposure and buying call options to rally on the upside well continue our exposure there and mitigate our draw down risk. Mike, where did the vix setting today . Under 20. We built more premium in there after a long weekend i think its an in between zone and not showing panic but tells you that the market is trapped in this macro vortex and focused on macro and stocks moving in one direction and has an affect of bolstering the vix levels to the upside. To the degree we get williams or powell this week getting a little more dovish in the rhetoric thats another thing to keep a lid on the vix all else equal. Thank you both very much for joining us. Still to come here on closing bell, pressure points, center stage in the recent roll ti volatile markets well discuss in 90 second can i get some help. Watch his head. S. Im so happy. Whatever they went through, they went through together. Welcome guys. Life well planned. See what a Raymond James Financial Advisor can do for you. Tell him were flexible. Dont worry. My dutch is ok. Just ok . in dutch tell him we need this merger. in dutch its happening. just ok is not ok. Especially when it comes to your network. At t is americas best Wireless Network according to americas biggest test. Now with 5g evolution. The first step to 5g. More for your thing. Thats our thing. So servicenow put your workflows immhm. Cloud, huh . Your employees must love you. Thank you. Ah, you could say that. So how are things with you guys . Great. Thank you. Thank you, sir. Lunch next week . Terrific. Say hi to the team. Will do. Call my office, i will. Sounds good. Alrighty. Servicenow. Works for you. Hello, morgan. Stocks starting september on a down note as traders fear about the trade dispute and that weak ism data sending the down as much as 429 and did close off the lows down 289. Biggest percentage losers on the dow, boeing, Goldman Sachs and 3m an then there were a number of stocks hitting new lows and cbs and l brands with yields moving lower theres now 60 of stocks on the s p 500 that have a dividend yield higher than the yield on the 10year. No surprise the defensive sectors that offer healthy dividends ending the day higher. Real estate is the Top Performing sector for the year and closely watch purchasing Managers Index that will be watched closely germany, spain and the Services Sector on the china front. Back to you. Seema, thank you very much for that. We have a market flash on box and Frank Hall Dand holland story for us. They gained a 7. 5 stake in the company. It could lead to a merger or sale between the company and the hedge fund again, taking a 7. 5 stake in box, inc. Shares up about 1. 5 back over to you. Frank, thank you. Controlled by jeff smith interesting timing on this one for box in this space. It is for sure. Its been an underperformer relative to the Overall Group to look at software, cloud storage. However you want to slice it i think thats the kind of thing starboard looks for. They often, not always but often work with management if management is willing to come up with plan and not as if this has five different divisions it is really kind of somehow rationalize Current Operations or look for a potential sale for a big transactional move here. Up 7. 7 for box shares. The Global Economy facing head winds. Not just increasing trade tensions with china that have roiled marks all summer, but also, hong kong protests escalating over the weekend. The brexit deadline looms in the uk argentina restricting currency lets bring in Christopher Smart and leon levy. Leon, lets kick off with china and trade which clearly has a huge impact on u. S. Equity markets. Do you feel like the sentiment of china over the summer moving towards or away from a deal . Well, i think its pretty apparent theyre getting frustrated with the way that donald trump is approaching the trade war, which is he escalates and then he uses conciliatory rhetoric and increasingly starting to realize its less likely to reach a comprehensive deal ahead of the 2020 elections just because of the u. S. Domestic Political Drama thats left to go. Christopher, we can talk about u. S. china trade and the tension but theres so many other scenarios that are currently playing out right now, as well, whether its brexit, whats going on in argentina, erg between japan and south korea. I mean, the list just goes on. How would even if we were to get a china trade deal here, how would you assess all the other potential risks and the impact to have to Global Growth just on china itself, i think we are spending far too much time looking at the ins and outs of a trade deal, even if a deal is struck, i think investors have to see through it and say, look, tariffs are part of the world right now. Threats an counter threats, no matter who the next president is, we are dealing with a very bumpy relationship with china over the next year or two years. As you point out, we are headed for a whopper of a month of october. It will start out with a 70th anniversary of the Chinese Communist party where things heat up in hong kong there will be perhaps sort of general election in the uk or at least the deadline for brexit is looming the end of the month and going into elections in argentina the end of the month and if the red sox dont clinch the playoffs for the world series it is a lot to talk about. Does the situation in hong kong influence the u. S. china trade deal well, not directly, no. But there are obvious knockon effects on one on the other. In particular, usually you see the u. S. Pushing back more in terms of human rights. Now the Trump Administration is taking a more hands off approach, letting the chinese handle beijing handle the hong kong situation because it is worried about throwing the progress made with the trade war up in the air over an issue which donald trump quite frankly is not that invested in. Leon, also wanted to ask about brexit given there in london, theres votes taking place this evening if the government does lose today and tomorrows vote and the Prime Minister sort of has his hands tied as it were on brexit, how do you expect things to play out from there well, there is a lot that is still up in the air but Boris Johnson said that he was going to be gunning for october 14th elections should his hands be tied by parliament the difficulty with that is that the labor or its leader Jeremy Corbyn who wants an election is very worried if parliament gets dissolved then Boris Johnson can move elections past november and so he needs concrete assurances that the election will be held on october 14th or before brexit timetable. But that really doesnt solve a lot of the issues. In fact, that could just trigger a new phase of uncertainty because it is very clear what everybody is going to be running for. Some people are voting in the election as if its effectively a second referendum and it is not. Different parties will have different stake that is theyre going to lay out labor party is most likely going to run on a campaign for a second referendum and argue to give people the option of either remain or softer brexit. Boris johnson will try to use the same campaign to strengthen his mandate to go back and renegotiate with the eu and say that a better deal is still on offer so long as they prove as the british can prove theyre willing to go the hard exit route and then you have the others who are on the opposite sides and plenty still up in the air. Thank you very much, chris and leon. Thank you. Still ahead, we are all over todays selloff. Biggest movers in the nasdaq ahead. Later, walmart is planning to dramatically step back from ammunition sales well discuss with bill simon. Stay with us from the couldnt be prouders to the wait did we just winners. 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Tyson foods up 75 on the year they have been facing some regulator probes, as well. A name hard hit lately thank you. Lets head to the nasdaq for todays biggest movers where Bertha Coombs has that information for us. Tech, of course, was the big drag here. If you take apple and broadcomm and qualcomm, nearly 25 of the losses and the full impact of those 15 tariffs start to take effect here. Also, we did have, though, a few tech names ducking the trend kla and lam research both up. They were higher today kla to a new alltime high and the Consumer Staples really the standouts on the day with pepsi up for a sixth straight day after gaining nearly 7 last month to a new alltime high back over to you guys. Bertha, thank you very much for that. Up next, tracking Hurricane Dorian, the storm making the way up the atlantic coast. Expanding in size and increasing its risk to florida and the carolinas. The latest when we return. Name. If you are under attack, i recommend calling reputation defender. Vo theres more negativity online than ever. Reputation defender ensures that when people check you out, theyll find more of the truth, not trash. If you have search results that are wrong or unfair, visit reputationdefender. Com or call 18778668555. On a scale of one to five . One to five . Its more like five million. Theres everything from happy to extremely happy. Theres also angry. Im really angry clive actually, really angry. Thank you. But what if your business could understand what your customers are feeling. And then do something about it. Turn problems into opportunities. Thanks drone. Customers into fanatics change the whole experience. Alright who wants to go again . I do i do i have a really good feeling about this. Welcome back to closing bell. Time for a news update with sue. Hello, everyone hers whats happening at this hour the Trump Administration imposing sanctions on irans space agency for the very first time accusing it of developing Ballistic Missiles under the cover of a civilian Program Designed to launch satellites into orbit the sanctions follow the explosion thursday of a rocket at irans space center. The Chinese Office responsible for hong kong slammed the escalating violence and warned that china would not sit idly by if that situation worsens. In beijing, a spokesperson said the Central Committee will not allow the chaos in hong kong to continue indefinitely. Here at home, cuba gooding jr. s trial on groping chargess s lawyer argued against the the delay. And new york citys mayor bill deblasio with Health Officials announcing the end of the measles joutd break. The city seen 654 cases of measles, the most in 30 cases since the outbreak began nearly a year ago you are up to date back downtown to you, morgan. I hoepe it is the end, sue. Thank you. Absolutely. Hurricane dorian starting the march up the southeast coast today. The storms wind intensity has backed off its now currently a category 2 hurricane and will have a damaging impact on floridas coast, georgia and carolinas we have the story covered from all angles Contessa Brewer is here with the impact on insurers diana looking at housing and frank on the transports. Contessa dorian could cost the Insurance Industry 25 billion and though reinsurers built up 30 billion in capital reserves, dorian could wipe that out loading companies to raise prices renaissance and everest have the most notable exposure. You can see renaissance up 3 . Everest up 3 and swiss re up 2 still the early damage predictions vary widely and turning we have no concrete sense of how much damage the bahamas sustained. Wilf in. Thank you lets check how the storm impacts construction and housing. Die yeah ins here with that angle. With the track now headed to the north and South Carolina as a category 2, this is the real estate in its path according to core logic in North Carolina, 157,819 homes at risk with a combined reconstruction value of about 32 billion. In South Carolina, 143,239 homes at risk with reconstruction costs of about 37 billion with storm surge risk if the damage is severe, we could also see risk to the already severe labor shortage. That happened after hurricanes harvey and irma two years ago, mass reconstruction in houston and florida slowed production in other areas especially the Roofing Industry morgan something we know you covered closely, thank you dorian impacting the transports. Frank holland has that story. Performing well below the Broader Market today and waiting for Hurricane Dorian to make landfall that trend could likely continue for the sector trading negatively 85 of the time losing just about 2 on average in the first 5 days after a hurricane. Thats according to kenshaw data and because theyre depend ept on good weather and roads. Carriers, those stocks seeing the biggest drops. Looking over three moths this sector completely reverses and then outperforms the market. Improving by 6 . J. B. Hunt shares up by more than 3 back over to you. Thank you very much for that. Lets check in on how markets did close earlier today. They were lower but off the session lows s p down 0. 7 . Dow and nasdaq down more than 1 on the dow, it closed down by 285 points the low of the session was down 425. Three sectors were positive but they were the defensive sectors of utilities, real estate and starp ls, the industrials and tech sectors were most disappointing. As we saw equities move lower, we saw treasury yields move lower, as well. Up next, stocks falling today on the back of weak ism manufacturing data but it may not be the recession i coundica annual i analysts are fearing. Tariffs in effect over the week inw the latest changes weighg on farmers and industrials when it comes to your customers expectations, theres one thing you can be sure of. Theyre changing by the nanosecond. Thats why cognizant created a unique engineering approach to design and build new digital products. Learn how cognizant softvision designs experiences and engineers outcomes. Cool. Cool. What do you look for i want free access to research. Yep, td ameritrades got that. Free access to every platform. Yeah, that too. I dont want any trade minimums. Yeah, i totally agree, they dont have any of those. I want to know what im paying upfront. Yes, absolutely. Do you just say yes to everything . Hm. Well i say no to kale. Mm. Yeah, they say if you blanch it its better, but that seems like a lot of work. No hidden fees. No platform fees. No trade minimums. And yes, its all at one low price. Td ameritrade. Our 80s music theme continues here welcome back to closing bell. Well send it over to mike santoli. Dont dream its over why are we talking about that . Because people have been sitting vigil waiting to see if theres signals of the expansion is over ism manufacturing dipping below 50 showing that Manufacturing Sector in the contraction zone the shaded areas are recessions. This is way back to just a post world war ii period showing you do get a down trend before you get a recession. However 2016 we were below the 50 mark for sometime there and the other notable instance would be in the mid90s,this scenario everyones hoping for, a soft landing, fed eases. So this is the debate we are having right now look at the city economic surprise indicators for the g10 developed economies. See it struggling to bottom. Part is because forecasts have come down so much and easier for the actual numbers to beat them but that shows you that again the market is trying to suggest that things could be turning slightly for the better. We are going to have to wait and see if that continues, guys. Thank you. For more lets bring in tristan slock here at post nine. Great to see you want to get your thoughts on the s pm manufacturing number today and where you fall in this debate it is an important fact the big question is, has so much damage been done that this is going to continue to go down is this drich more by if theres a change unfortunately at this point below 50 it is recession for the Manufacturing Sector and watching very carefully fitif i spilling over. When you talk about watching the signs, what are the signs you are watching most closely . What would change from it being purely manufacturing recession to one thats more broad based it is employment. Well see adp tomorrow that becomes very critical for signs that this is spreading out to not only being an issue in terms of manufacturing but we also have already seen new export orders coming down and an important leading indicators so thats pointing to more slowdown. To what extent is Monetary Policy the cure . So the problem is that if you ask how do we deal with trade policy Interest Rates is not the most obvious answer so in that sense lowering Interest Rates a few times there are a lot of question marks about what can that do to stem the slowdown were seeing it is two very different forces set in motion here and we are getting more and more worried of the downside ricks and the risks that the fed may have to cut more. We can talk about exports here but compared to the other economies that have been showing signs of weakening and slowing, not as export drib ven of an economy and even if you see the markets slow even more markedly . Germany is at a brink of a recession. Japan with a sharp slowdown. So the question is will the risk of the world slowing so much can the u. S. Stand its own as you say, so far u. S. Being a closed economy is helpful but we are worried also in the employment report and watching on friday nor fears that the Service Sector is also beginning to slow and we are seeing some signs of that making us somewhat worried about the broader economic picture. Is there a sense that lets say a rollback of the tariffs and some gestures to turn and could reverse or no . May help in markets here but i think the problem is that sentiment among businesses is really most important issue in terms of do they believe this is the end of the trade war or come back is this just versus china . What about with europe and japan . A lot of issues around that specific question and maybe markets like it in the short term and worried that this is not something you just can brush aside very quickly from a Business Sentiment perspective. Great to see you. Thank you for having me jix still to come, walmart planning to step back from the ammunition sales. Well hear from bill simon, the former walmart u. S. Ceo ahead. Coming up, investors slamming the brakes on uber and lyft, why they could be flashing the hazards for the entire ipo market through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Val, vern. Im off to college and im not gonna be around. Im worried about my parents retirement. Oh, dont worry. Voya helps them to and through retirement. Dealing with todays expenses. Like college. While helping plan, invest and protect for the future. So theyll be okay. Without me . Um. And when we knock out this wall imagine the closet space . Yes oh hey, son. Yeah, i think theyll be fine. Voya. Helping you to and through retirement. Servicenow put our this changes everything. Youre right sir. Everything. No not everything, i mean youre still blatantly sucking up to me gary. Brilliantly observed, sir. Always three steps ahead. Six steps ahead. Sixteen. So many steps. You done . A million steps ahead. Servicenow. Works for you. Welcome back following deadly shootings in the store this is summer, walmart saying it will discontinue gun ammunition sales. That could be used with militarystyle weapons retailer will also stop all handgun sales in alaska completing the exit from handgun sales and asking customers to no longer carry guns in the stores in open carry states. In a memo to employees, Doug Mcmillon saying we have been listening to a lot of people inside and outside of our company as we think about the role to play to make the country safer. It is clear to us that the status quo is unacceptable former walmart u. S. Ceo bill simon joins us now on the phone. Bill, thanks very much for joining us quite a significant retailer particularly of ammunition that walmart is do you think that ammunition sales in the u. S. Will fall as a result of this or those ammunition sales move elsewhere . No. Unfortunately i think walmart has to do what they think is the right thing to do. They have had horrible tragedies in the stores and needed to take some sort of action. Unfortunately, its kind of unreasonable to ask to solve a problem that washington cant seem to solve. While i would hope that this would make things safer, unfortunately, theres plenty of places to buy ammunition. Bill, when you see a major retailer like walmart take a move like this, though, do you think it adds pressure to lawmakers to try tocome to the table for discussions . I think thats the only thing thats going to solve the problem. We have a crisis that has to be dealt with and by sitting down, petitions to retailers, gosh, maybe they make people feel good because they need to feel like they took action theres hundreds of millions of guns in this country and somewhere between 3 million and 5 million artype weapons already in circulation and you can stop selling them or ammunition theres plenty of them. What do you think, bill, overall of the action that Doug Mcmillon has taken here and whether or not its going to hurt the retailer . Well, you know, first of all, i think doug and the team at walmart had to take some sort of action and this was thoughtful whether it will be impactful on the overall issue in the country is difficult to say. Its such a decisive issue a good portion will not. Its tough as a retailer to have to take a position on those things but when action happens like happened in el paso, i think theyre left with no choice. Bill, to that point, i realize you dont work for the company now, but that you did oversee those u. S. Operations in the past what do you think went into making the decision today and the specifics around it . You know, the company and every company but walmart in particular doesnt get a lot of credit for having a lot of thoughtfulness and heart, and first and foremost every decision at walmart is made with the focus on the customer. And so, i think this shooting in el paso really, really jarred them from a customer safety perspective. It was always the disaster scenario that we always worried about and trained for and i think they feltlike they neede to do something. It was a difficult decision, im sure im sure it was but one they felt like they felt like they needed to take, im sure. Thank you for joining us. You bet. Coming up, agriculture of the future, u. S. china tariffs y. Ighing on industrials in a big well hear from a ceo. Stick with us. Just slip them right on and off. Skechers slipons, with aircooled memory foam. You should be mad at leaf blowers. [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. Welcome back to closing bell. Cnh industrial had its investor day here today to announce a fiveyear plan to invest 13 billion in new products. Joining us now to discuss that and much more is their ceo herbertis morehouser thank you for inviting me. Lets talk about what you announced. Spinning off this part of the business not really. Actually that part is going to stay we basically have an off Highway Company today which is comprised of tractors, new holland and case see that tractor here. And constructionequipment. Thats the remaining core and spinning off the on highway activities, the trucks on the other side and that engine business thats the spinoff to do and create two leaders, one in off and on highway. Why do it now i think its the mega trends we are seeing and looking at the investment plans Going Forward and saw very little synergies between the business its all dislocated by the same thing. The investment needs for the segments are very different and led us to the conclusion to create a purr play on both sides. How much is your business suffering because of the and offhighway side. How much has your business been suffering because of the trade war . All of our businesses have been suffering with he would see a boom in north america right now, we dont see this because of the trade war. Still we were able to increase our earnings quarter after quarter and we hope that were going to have the trade war behind us soon thats the hope. We also hope that were going to have a ratification of usmca, but, you know, im not the president , i hope thats going to come soon. Theres a lot of focus on manufacturing, particularly here in the u. S. Given the ism number we got this morning that showed contraction. Your take given the fact that you do operate, you do sell these heavy machines in so many different markets around the world, your take on global Economic Growth more broadly. I think global Economic Growth is going to take a stop if the trade war continues i mean, we are a manufacturer around the world, we have plenty of facilities in north america, we are producing in south america, europe and asia and we see a drag because of the trade war in all of the world regions. Interestingly enough right now the south American Farmer is benefitting from the trade war a little bit so our sales is up there, which is not in the interest of the united states. I also saw some numbers today that the trade deficit of the u. S. Has increased in the last year despite the tariffs i think that was also an interesting thing to read this morning. Hubert, this tractor, theres nowhere to sit how close are we to totally automated. We have this in the fields today. We can pivot across oh, we are on that already. This is a fully Autonomous Tractor that we have today in operation in farms its right now in a test stage, but youre going to see those tractors very, very soon coming in life applications what you do have already is high degree of automation you can sit a child on a combine today which is a highly complex machine and basically you need to have four different knobs and the whole thing goes automatic. Looks like something out of transformers. We are transforming our company which is kind of our theme, transform to inn with were creating two Global Leaders and also transforming our individual businesses. Youre head quartered in the uk how much are you focused on whats happening with brexit. Truly we are a u. S. Company but we are registered in amsterdam, paying our taxes in london and we have our operational headquarters here in the u. S. In chicago. A big part of our sales are also here in the u. S. , followed by europe. Hes going to test out the machinery for us there we go looks good on you blue is your color. Big, plenty of room up here and very comfortable guys, lots more closing bell to come after this short break what do advisors look for in an etf . Dont just track an index, help me meet a clients need. Is the fund built to sell or built to last . Etfs are only part of a portfolio. So make it easy to explain. Give me a quality fund that helps me get clients closer to their goals. Flexshares etfs are designed and managed around investor objectives. So you can advise with confidence. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Its how we bring hope to our patients like viola. Her team treated her cancer and strengthened her spirit. So viola could focus on their future. Cancer Treatment Centers of america. Appointments available now. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Take a look at this. Here are the first aerial pictures out of the bahamas, specifically these are the aabaco islands after dorian battered the region over the past two days. The footage shows the total devastation of the communities there. Dorian first made landfall in aabaco on sunday, the images we are just starting to get now are gut wrenching. We can expect we will get more updates on conditions there as rescue operations continue we will bring you those as we get them. Lets have a look in Parliament Uk lawmakers just started voting on a measure to seize control of the parliamentary agenda to try to then hold a second vote tomorrow to block a no deal brexit we are expecting the results in about 10 to 15 minutes time. The government Prime Minister Boris Johnson is looking likely to lose that vote, we will keep you posted as of when the results do come in. Slack is set to report results tomorrow after the bell and Weekly Mortgage applications also hitting the tape tomorrow morning. Lets start a preview of slack remember this is slacks First Quarterly results as a Public Company and it has a lot to prove here. One of the hottest ipos this years, shares have tumbled since the june listing and company will need to convince investors it can justify its price evaluatiev evaluation which jorgen stanley put it at 20 on a growth adjusted basis key will be progress attracting enterprise customers as Microsoft Teams overtakes it in daily users and big corporate customers. The competition will be in focus, especially since slack has run up so much since that ipo. Deirdre, thank you. Weekly Mortgage Apps on deck as well. Diana olick has a preview. We saw a pull back in refinances in the last report because Mortgage Rates flattened the week before. We could see renice resurge. The average rate moved lower last week starting at 3. 65 and ending at 3. 55 . That may not seem huge but the rate friday was 111 basis points lower than it was a year ago and that is a lot. Mortgage applications to purchase a home have not seen much of a boost all summer from lower rates. So im not expecting to see much in those numbers back to you guys diana, thank you very much. We have about two minutes left of the broader show mike, some key things take a ways from today, we finished off the lows, but definitely a sort of risk off tilt to the performer. Without a doubt i think that still bond yields give permission to the market to rally or deny that permission, i think today kind of denied the permission to rally, although i have to say its clear investors were braced for weak mac troe data the number was more or less taken in stride even though it was below 50 i do think were hashing out in this zone of figuring out if were still in a 2 u. S. Economy with all that he is going on in the rest of the world in trade or not we have no real verdict just yet. Of course, august we know is season alley very volatile, you tend to see big pull backs or corrections but september tends to match it at least for the first half of the month. In september the worst month in general although i have to say in the last ten years its less the case that its an outright negative month. Its more of a coin flip and i think the context matters a lot. Weve been weak, we have had bond yields kind of dragging to new lows that have predominated right now. I think thats probably overriding Everything Else including seasonal factors. Particularly of course in europe a factor that kicked things off so keeping an eye on that. The dollar ending the day flat again, its had moments where its jumped on weakness of other currencies but that didnt hold by the end of the session by given a strong run up in the last couple months. Yesterday while u. S. Stocks were closed the dollar did have a little bit of a run. Pull back from there i did note that bullard, st. Louis fed president bullard is out there today in the last half hour saying it should be a 50 basis point cut by the fed this month, thats a reiteration for him. Hes saying you have to get out in front of the trade issues and all the rest of it i think were fixated over the next two weeks over what the fed is going to do and say. More fed speak throughout the week including if he had chair powell on friday and that key jobs report as well. Facebook, i think, too. Thats right. Were also awaiting result in parliament any minute. Were out of time here thanks for watching closing bell. Fast money begins right now. Live on the Nasdaq Market site this is fast money. Im melissa lee. Tim see more, karen if i hadder man, guy dommy a tuesday tumble stocks kicking off september in the red and one start shows we could be headed for a point of no return. Also ahead investors slamming the brakes on uber and lyft, why these two stocks could signal a rough road ahead for ipos. Brexit drama heating up and the currency market is taking notice. We begin with todays selloff, stocks taking a nose dive as the new round of tariffs kick