Transcripts For CNBC Closing Bell 20240713

I sawed this loud and clear to everybody. Rob portman back immediate up. Theres nobody more honorable than rob portman of ohio he called up, please let the money go i said rob i hate being the country thats always giving money when ukraine helps europe and the European Countries far more than they help us theyre like a wall between russia and europe. Theyre like a wall. Theyre a big, wide, beautiful wall and he said, you know what but its important in fact, he came out and he said that this was my only reason. Because i dont like being the sucker country we were the sucker country for years and years. Were not the sucker country anymore. But i gave the money because rob portman and others called me and asked. But i dont like to be the sucker and European Countries are helped far more than we are. And those countries should pay more to help ukraine ask a question. Thank you, sir. What did you want on biden . Biden and his son are stonecold crooked you know it. His son walks out with millions of dollars the kid knows nothing. You know it and so do we go ahead ask a question. The question, sir, was what did you want president zel sensyky to do about Vice President bideen and his son, hunter are you talking to me yeah. It was a followup of what i just asked you. Are you ready we have the president of finland. Ask him a question. I have one for him. I wanted to follow up on the one i asked you. Did you hear me did you hear me . Ask him a question. I will. Ive given you a long answer. Ask this gentleman a question. Dont be rude. No, sir, i dont want to be rude i wanted you to have a chance to answer the question i asked you. I answered everything its a whole hoax. Do you know who is playing into the hoax people like you and the Fake News Media that we have in this country. I say, in many cases the corrupt media because youre corrupt much of the media in this country is not just fake its corrupt and you have some very fine people, too. Great journalists, great reporters. But to a large extent, its corrupt and its fake. Ask the president of finland a question, please. Okay. Ill move on now mr. President , in your opening remarks, you said to President Trump that you had been to some museums today and that you respected the u. S. Democracy and encouraged him to continue it. Are you concerned that thats not happening . My second question to you, sir, is the wto rule to you today in favor of the United States saying that the United States can now impose tariffs on european goods because of illegal subsidies against airbus. That was a big win for the United States. Right . Never had wins with other president s, did you . But were having a lot of wins at the this was a case that started 10 or 15 years ago. Excuse me the wins are now because they think i dont like the wto and they want to make sure im happy. Because all of those countries were ripping off the United States for many years. They know that im wise to it. Weve had a lot of wins. This was a 7 billion win. Not bad. But i think the question is for me. The question, sir, is are you concerned that the president will impose those tariffs and the effect that may have on the country . Yes, first of all, when i refer to your democracy i just want to tell i am impressed, the American People have gained during these decades, hundreds of years, building up a very impressive democracy so, keep it going on to wto, i have a lot of respect to multilateralism and to International Institutions so wto has given now the decision which is, well, quite tough with europe. But ill just say that the wto has said its opinion, and thats that. And i just want to finish by saying its an honor to be with the president of finland he has done a fantastic job. Very popular, beloved over in finland. The wto has been much better to us since ive been president , because they understand they cant get away with what theyve been getting away with for so many years, which is ripping off the United States. And please remember the president s last remarks, that we are a great democracy we are a great the United States is a great democracy. And im airing what im airing because we are, in fact, a democracy. And if the press were straight and honest and forthright, and tough, we would be a far greater nation we would be far greater when we dont have the cnns of the world who are corrupt people thank you very much, everybody welcome to the closing bell. That was President Trump finishing up a press conference with the president of finland, president niinisto a lot of the questions having to do with the telephone call with the president of ukraine the markets are down sharply at this moment, down 482 points on the dow alone. Session was down 599 the high was down 135. We didnt really get any questions on that topic. Although, of course, earlier we did hear from the president to say all this impeachment nonsense is driving the stock market down. Lets get to eamon javers. This was an astonishing press conference the president of finland turned to the president and said you have a great democracy keep it going. Jeff mason of reuters asking whether he was sending any subtexts to the president about the state of the United States now. We saw the president of finland say simply no, hes impressed by the history of the United States you can bet there will be a lot read into that moment in that exchange there we also saw the president in an extremely aggressive mode here toward the press, something weve seen throughout this presidency but again today. This is a president who feels besieged on a lot of fronts, particularly by democrats on capitol hill, who have fired off subpoenas, who he says destroyed the lives of longtime republicans. And, guys, if you think about it, were only a week into the impeachment process. You can see his reaction is a very angry, firedup reaction, who feels that his agenda is blocked by democrats on capitol hill. Saying im airing what i am airing because we are a great democracy. A number of factors are being pointed to in this market selloff today one of them is the wto ruling that will allow the u. S. Slap tariffs on european nations. You saw both president s talking about investment bilaterally in a number of business deals both president s stressing economic ties here between these two countries at a time when this president is eager to generate some economic progress. The dow is off just under 500 points, analysts are saying its more to do with the president s trade war than his impeachment the president tweeting out its because of his impeachment proce process. Eamon javers, thank you for wrapping that up for us. Lets look at whats driving the action in the market today hangover of weak data, private payroll coming in, essentially in line,but august was revised sharply lower and treasury yields are sinking once again, dipping below 1. 6 much more on this market selloff and renewed concerns about this economy plus how you should be protecting your portfolio amid all of this uncertainty when we hear more from Mohammed El Erian, david rosenberg, tony dwyer, Stephen Roach but first josh brown. We are now through the seventh straight quarter of zero progress on the dow jones. Seven straight quarter were into the eighth quarter now since the trade war started january of 2018. This is literally almost two full years with no progress in the dow jones. I remember a year ago, being on the air for cnbc you have the tenyear. Everyone has to shorten up diversified portfolio. Think of what that did for you the long bond this year, year to date, is up 22 total return 22 . So if you threw your fixed income out last september because you thought oh, no, rates are going to scream higher and we own too many bonds. S p 500 is not even up that much this year. You want to make sure you have enough humility to own the Asset Classes and respect the fact that on any given day, some will be down. Stocks right now, symptom will be up. Gold and bonds are up. Tactically speaking its not a great time ugly mis print, transports rolling over you dont want to see that russell 2000 rolling even harder you dont want to see that whats holding up the market has held up the market buy backs. Well have a lot this year, finish the year strong with buybacks other than that, theres no corporate capex that peaked in the quarter of 2018 nothing exciting going on. Cfos are pulling back. Its a tough time. Diversified portfolio is looking pretty good. Youre doing okay. Well talk to you more on this market selloff the next hour or so, covering all the angles today Courtney Reagan is tracking the nasdaq and deeper dive on the economic datea. Bob to you first. It was rough right from the outset, 51. Same now here. We saw transports week all day, energy retail. Lenar had fantastic numbers overall. Thats a new high for lennar and pulte even though its down late in the day even though General Motors numbers were better thats found as well. Housing strong, auto is not so strong difficult parts in the state of the consumer right now guys, back to you. Bob, thank you very much. Nasdaq on pace for its lowest close since august Courtney Reagan is watching the movers there hey, court. Hi there, wilf. Thats right if you look, technology has been fighting for the biggest loser spot at loost for the nasdaq composite. Were still down 1. 5 . If you take a look at that 2 hyundai moving average, though, for the nasdaq composite, at least were relatively down, far from breeching that right now at 7789 or so for the nasdaq composite. Semi conductors as a group, if you look at the etf, smh, that is weaker on the session only 10 or 11 names in the nasdaq 100 as bob was talking about that previously have been holding us up for the last several months lastly, of course, it makes sense that theres widely held tech names shaving the biggest points off the nasdaq 100. Youve got apple and nasdaq responsible for 20 points and 15 points to the downside on the nasdaq 100 back to you at the new york stock exchange. Courtney, thank you selling isnt just contained to here in the u. S. Weve seen big moves elsewhere. Ftse 100 had its worst day, falling 3. 2 , broader stocks europe fell 2. 7 uk construction pmi came in at 43. 3 versus an expectation of 45 it follows weak eurozone and chinese data earlier in the week also imposing tariffs on European Countries 0. 5 , europe down 3. 5 , s p 500 at the moment, morgan, 2. 8 down for the week. And were only into wednesday. Lets bring in our economic reporter Steve Liesman what spark this had selloff, second straight month of contraction. How dire was this reading . You know, you could kind of tell the manufacturing story by the spoke issues that were out there. You had a decline in the Oil Manufacturing sektder there. The trouble is, you know, this ism manufacturing number comes along yesterday and tells us only three of 18 sectors were growing. That means 15 were not growing or were actually contracting look, morgan, were not quite there yet when it comes to signaling a broader recession. When were actually in recession, so not a foregone conclusion right now hard data is suggesting were running 2 the concern is real, whats happening in manufacturing and what wilf just reported spread morse broadly to the u. S. Economy. Steve, last time we saw socalled industrial recession, last time manufacturing data contracting like this was in 2015, 2016. Right. It didnt roll out to the broader economy. Right. It spreads into the confidence figures if it spreads to the stock market well be watching for that and thats a good graphic you have up there, folks if you just look at that, off to your left, to the left of the current number is that dip right there. A lot of that, morgan, accompanied a recession in the oil patch when Oil Prices Fell thats a big part of what caused it to decline. A couple of months in a row below 50 to the left of that is when it really plunged doesnt give you a whole lot of warning theyre going to be watching closely that Services Number whats happening in manufacturing spreads to services, the bulk of u. S. Economic activity. Then there will be a reason for real concern. Hi, steve its josh brown. Aim curious what your thoughts are on the bull case, whats happening with these manufacturing measures is that theyre lapping the incredible juicing. And now were facing a situation where the comps are way harder than they normally are because that have spike in activity. Well get through that and its possible that these numbers are not poised to take a new leg down as we get through those tougher comps. Whats your thoughts on that im going to throw half of that question back to you in a second, josh to the extent were seeing it in the earnings, thats where we would be lapping were look at a monthly number, for example, when the number is above 50, manufacturing is expanding. Thats been true more or less since 1948 when its down at 43, almost all the time the economy is contracting. Nothing to do with what happened last year. It could be that were measuring relevant confidence to a year ago. Im not sure when the survey is being asked, being asked that way. I will say this. Its soft data, confidence data. You mentioned ceo survey data. Thats not real dollars and cents being spent. Are you seeing the lapping that youre talking about in the industrial earnings numbers . No. Most doesnt have to do with the u. S. Economy the World Economy is in a substantially worse place if you remember the story in 2017, can you throw that out and arguably the effects of the trade war have been worse for europe than they have for us so far. Developed asia, emergesing markets and developed europe its having an impact on how u. S. Economies are thinking about the future i dont think anyone would deny that at this point the only question is if its temporary. Well have to leave it there. Thank you very much, Steve Liesman at hq there. We have improved a little bit over the course of the last hour lets bring in jack caffery. Are you buying anything today or are you feeling very bearish im not feeling very bearish. We have these moments of indigestion. In fact, if we think back, Fourth Quarter last year, it felt miserable up 20 on the year and i dont remember anyone in the Fourth Quarter saying we have the prospect of a 20 year we could have a year with the bond being a positive, dollars being positive but ultimately its been an environment where no one thought the economy would accelerate Central Banks are being more proactive, trying to be helpful and weve seen that finding its way through in terms of valuations. So were not accelerating, though gdp growth, were closer to 2. 5 . Much closer to trend growth that winds up being ultimately healthier and allows Central Banks to be helpful, the fact that we dont have inflation effectively comes back to this idea that Central Banks can be friendly rather than contract ing and causing problems. On a day like today, we have major indices down. As an investor you always want to be thinking about how can i upgrade my portfolio diversification is how one stays wealthy in the long run. Twersification helps to keep you there and ultimately quality matters. One thinks about today we certainly have a lot more policy uncertainty today than we had a year ago, whether its trade, brexit, german policy from that, one comes back to what are good businesses and what are good misses that pay cash and ultimately to give you good cushion and quality. Jack caffery, good to see you. Thank you. 35 minutes left of trade. Lets send it over to mike sant santoli for todays dashboard. Mike nowhere fast is where well start. Key sectors that give a read on the metabolism of this market. Passive aggressive stock versus bond relationship alone together is the corporate appetite so nowhere fast. Dow jones transports this is a fouryear chart. Want to get a couple of significa significant. We bottomed there in the high 8000s. We have some room. Let alone last december, much more dramatic drop there Home Builders etf relative to the Consumer Discretionary etf this is essentially the best looking part of consumer right now. Over the past year, out performance of the Home Builders has been 18 the part of consumer discretion ry essentially playing on demographics if i showed you a tenyear version of this chart, though, its only recouped half of the relative losses. Thats why housing is not in step with the rest our Economic Cycle right now, guys. To mikes point weve seen way worse out of the transports. Very high data, Cyclical Companies and a lot of companies arent really high credit quality. When people get nervous they sell them doubly so than they would but you Pay Attention to these things in the context of other things that you see. I mentioned the russell 2000 in the same breath. I think you look at these things in concert with each other and its not that they are right when they sell off or right when they rally, theyre a signal of what people are starting to feel. 34 minutes left of the trade and down 430 point ons the dow Mohammed El Erian joins us on the phone. Thank you for joining us since you and i were talking monday morning before the market open has the data in the period between then and now justified such a big trade down . Thanks, wilfred remember you had me on and said what would you do here i said i would take some risk off. That was due to two reasons. One is that the Global Economy was slowing much faster than some people anticipated and secondly, the hope for a policy handoff was very high i felt both these things were exaggerated by markets so theres a better understanding of how quickly the Global Economy is expanding. Theres too much hope on the policy front yes, in terms of we are better reflecting the economic fundamental fundamentals, no in terms of we havent yet reflected the quality. There seems to be an increasing by the day, by the hour focus on the jobs market, adp number we got this morning, expectation numbers around the monthly report, government report on friday if we do see a slowing, which it seems like we are, how big of a deal is that, especially this point in the cycle so it would be a big deal im not quite sure were going to see a massive slowing why would it be a big deal manufacturing is relatively small for the u. S. Economy this is a global phenomenon. So far, the domestic side of the u. S. Economy has been doing very well if you see a significant slowing in wage growth and or job creation, it will tell you that the domestic side is getting contaminate contaminated by the slowdown these two numbers now take on a lot more importance than they did just a week ago. If we dont see the handoff that you were discussing in your first answer, do we then have a recession in 2020 . Not necessarily because again domestic side is doing quite well the problem with the handoff, wilfred, as you just heard, the question is not whether Central Banks will be friendly they are going to be friendly. The question is whether they can stay as effect iive or if the e is actually now harmful to the economy. So keep an eye on that i dont think the monetary authorities can save us on the recession. Im pretty optimistic about this, is the nontradeable sector of the u. S. Economy. Thats still in good shape. Including europe and japan, is there more ammunition for the center bank to do more cutting and have impact here and other parts of the world they definitely have more room i would encourage you to look at whats happening thats cut back quite a bit recently which tells you that the bond market is not just about the Global Economy but having a more realistic view about the u. S. Economy smur, the fed has room to cut. Do you want to use that now . I suspect they will cut because the risk of not doing so is high but we shouldnt expect that to economically change the outlook. A trade deal deif you cant and put the economy on to a positive trajectory . If its a durable trade deal, yes, that would help it certainly would help. But it has to be durable, wilfred. What wouldnt help is something that is seen as short term and just a cease fire. Mohamed, thanks for join iin us. Thanks for having me. 29 minutes left to trade here things driving the action. Weak manufactureing data stoking anxiety about a slowdown in the u. S. Private payrolls coming in essentially in line. Yields on the tenyear treasury dipping back below 1. 6 , hurting the market lets dig deeper into the selloff Courtney Reagan, but court lets start with you. Thanks, wilfred were off session lows at the nasdaq as well still negative on the session, down about 1. 5 . Transports are lower broadly weve been talking about that throughout the show. I point to American Airlines, United Airlines being lower and actually the biggest laggards of the nasdaq 100 here today. You have names like intuitive, surgical and walgreens right behind there, trying to jockey for that position of the biggest loser in the nasdaq 100. We talk about the strength of the consumer, holding up the broader economy. Seeing some cracks, at least, in the trading aspect of consumer names here at the nasdaq as well you have stitch fix, considerably lower they did have some earnings disappointment yesterday and guidance disappointment. Youre seeing name selloff like starbucks and ulta back to you. Thank you very much, courtney lets get to frank holland, diving into the transports specifically. Union pacific hard hit as the sector falls for a second day. Kansas city southern also down 2 rail volume was down 7 last week, according to a report that was released earlier today year to date traffic down 4 , this news adding to the pressure from the weak manufacturing data yesterday. Dow transports down 2 19 of 20 stocks in the red showing the impact on the broader sector trucks and logistics, showing the biggest decline partly due to barkleys midsized truckers like land star seeing steeper declines in part because theyre seen as more vulnerable to an increasingly volatile rate environment. Back to you. Thank you, frank holland. Lets send it over to mike santoli for a second dashboard mike calling this passive aggressive the market over the past couple of months has been in both modes for a while. The chart of the s p 500 to put the current moves in a bit of context here we slouched back pretty much into the range that had trap this had market for all of august another 2 or 3 below current levels before we get to the bottom of that august range. Really, it seems as if its not quite a successful rebound attempt to the highs, has rolled over we have not yet gone back to where we were really five or six weeks ago. Thats one way to put it, in context. Stock bond relationship has been key. Only when stock prices have been going up along with bond yields. This is a relationship s p 500, blue the total bond market etf this line is going up, stocks are outperforming bonds. When its going down, obviously, the other way around here, it shows you its not sort of all the way back there again in august. Right back here, you had bond yields at record lows, bond prices at record highs just about and stocks were suffering. You give back some not entirely all of it whats interesting today, treasury yields in the long end especially are not moving dramatically lower it seems the bond market not having as much of a panic move as the stock market did, at least at its lows earlier today. You saw us below those august lows 2 to 3 where we are now, would you be concerned it would be free fall from there . I dont know that free fall would be the term that i would use. I would be concerned because other people would be concerned. The stock market is very much a mood ring. And, frankly, these levels may be meaningless in terms of the fundamentals in valuations of the underlying businesses that people are investing in. From a training perspective, understanding how much this market is algorithmically driven that question would be answered based on who you are, how you invest if youre investing for the long term and were down 6 from the high versus 5 , it doesnt change anything for you. On a day where every s p sector is in the red one of the worst performing is Technology One of the biggest losers down just under 2 . Web bush security managing director of research, thanks for being here what do you make of the selloff in tech, especially given the fact that when we look at the internet names theyve been the biggest highest flyers all year . Its a white nknuckle period in terms of numbers cut, worried about china. Were seeing investors, the high multiple names are getting crushed. 30, 40 . Youre seeing risks get taken off. Ultimately, as many head for the elevators, i think right now the question is, do you retreat or double down . Our opinion, we continue to be steadfast in the bullish i think the winners are the ones you own in terms of the cloud and fang names were not we continue to sort of be pounding the table on our winners here. Whose valuations are still susceptible to these pullbacks some of the high multiple software, names caught 15, 20 times. Youve seen it with crowd strike, zscale, okta, some of these high flyers. Fundamentally, from an ipo perspective, what weve seen the there, combined with uber, lyft, software and semi, theres nowhere to hide. Is the ipo closed for the right business models, with profitability and with growth, i think its not. Right now youre seeing that door shut, which this is a major shot across the bow from wall street to the valley right now its the question. These private companies that had ipo paths, theyre going to have to seriously think about m a or other rounds on the private side in terms of what weve seen. Isnt that supportive of valuations for companies that are public and fundamentally sound . Air bnb will probably happen theyll do a direct. Now you dont have this meteor coming into the market and displacing other stocks. Is there some benefit to that . You raise a great point fundamentally, with with ipos, its sucking the oxygen out of these names. Right. From a supply perspective, some of these names continue to be there theyre going to benefit i view this as one you sort of hand hold through this period 3q, specifically cloud, fang, amazon, apple, microsoft especially some of the cloud names, we continue to like some of those names i think ultimately these are valuations that are going to go higher were not panicking because of the fundamentals. If you had to choose one name, given the fact that its a sea of red that you would be adding your position to, what would it be . In our opinion its apple just because taiwan, weve seen an uplift in terms of 4 Million Units coming out of taiwan in terms of what iphone 11 looks at i view that as a 20, 25 overhang in terms of china on large cap that continues to mean we pound the table on, along with a handful of others. How important is the call to coming up for netflix . Its massive. Right now, new york city cab drivers are negative on netflix. This is a major prove me xwrt for hastings and netflix, especially with iger, as well as apple and cook coming. Fundamentally it comes down to the International Subs can they show growth there if not all of a sudden i think youll see valuations continue to come down. If they miss on subs and even saw another u. S. Decline in subs, how far do they fall, another 30 or so, or is it just a tweak, given the fall . I think that would be a watch out below situation in terms that that stock could be down another 20, 25 . Thats where many could view that the clock strikes 12 in terms of valuation, continuing the stretch, especially this pricing war, where apple is priced there, where disney has priced theirs. You look at netflix as a darling. This is a prove me quarter. Theres no natural investor in that scenario if netflix disappoints on international, who comes in . The growth investor doesnt come in because the dproeth isnt there. The Value Investor doesnt come in because its not cheap enough what is it, 60 times thats the problem. Who is in that air pocket theres no one there. Going into 3q theres worries in terms of valuation earnings, netflix included to your point here is the growth here is the value. In between, theres no one thats why youre seeing these stocks miss earnings, seeing them down. Dan ives, thank you. Thank you. Energy is the worst performing sector in todays selloff lets bring in the president of blue line futures. Thank you for joining us looking at the oil price itself, outweighing geopolitical concerns bearish report today. In twomonth lows. This isnt just happening right now. You mention the geopolitics. Everyone is yelling, but the geopolitics. Opec said it today, saudi arabia proved to be a reliable source of oil they were able to meet the demands of their clients and got back online pretty quick during the seasonally bearsh time of year, that became a bearish tailwind, they were able to fight through those geopolitics. Oil looks heavy. I think theres lower to go. In terms of if you were going to be investing in the Energy Sector right now, do you go more defensive and take on Something Like an exxon, chevron thats more diversified i wouldnt touch those right now. I think theyre bearish. Ive been bearish of those names right now. Im looking lower in the chart theres a trend line down to 47 back to 2016 looking at exxon more particularly, yeah, theres some earnings forecast being downgraded right now this chart looks heavy, trying to push down through 67 bucks. We could see exxon go town do to 67. Exxon has sold off look at chevron right now. Its more the top end of its range. It failed at 125 50day moving average. This cross could bring a tailwind lower im looking at 2015 from chevron, comes in about 108. If you get the tailwind lower, and we break through 108, we could see this go down to 95 in chevron. Guess what, if we go lower, there will be some value to buy. I like it to go lower. Then youll be able to see it for value long term. Look out below with food prices howard marks likes to say theres nothing intelligent to be said about the future of oil prices, and i think i agree with that so, i have no edge on where oil prices are going speaking strictly about the stocks, this is a tough one for longterm investors. Valuations are good, but the prospect for earnings does not look good. And then if youre a very longterm investor, theres an open question about whether or not oil and gas are the fuel of your childrens generation you dont get bailed out on the long termism either theres a reason Warren Buffett is not scooping these energy, oil and fracing giants up and that might have something to do with it. I dont love them short term or long term. Thats where i am. Bill, thank you for joining us meantime, time for last chance trade with 16 minutes left to trade. I want to talk about edward life sciences, the first time being mentioned on the network its a 40 billion plus market cap. Big earnings beat, gap up 10 , spept a quarter since reporting that earnings number, consolidating. This is exactly what you want to see after a gap. You dont want the stock to extend and then fall just tracking that level but giving nothing back. Thats the key here. Health care sector is loaded with secular growth stories. Trade doesnt matter to these companies. Interest rates dont matter, fed drama, impeachment has nothing to do with anything. These are the types of stocks by the way its green on the daytoday these are the types of stocks that i think could do well between now and the end of the year if youre an investor looking at the tape today youre pretty happy about it. When you have conviction names like this on a day like today, do you ever trim the exposure to stocks like that if i were a trader. Im talking about this as an opportunity because it has a pristine chart, ten years in an uptrend, extraordinary growth story and under followed people dont talk about it its not cheap on valuation basis. If youre a Value Investor you wont find this in one of your screens. But this say great trend, green stock. Itsworthy doing the research and finding out why is this stock being accumulated when eight out of ten stocks in the s p are being sold off thats what i like to look ought on days like today. The dow is down 453 points. We are now in the closing bell market zone. Commercialfree coverage of all the action going into the close. Well tell you everything an investor needs to know in these final minutes and break down the final action after the bell rings, too. Big movers in the dow s p and nasdaq constantly changing and Cnbc Mike Santoli is there to break down crucial moments of your trading day. And today, Wealth Management ceo josh brown still with us right here at post nine. Im not going anywhere. Lets start off with seema mody and how theyre playing off in the twoday selloff. Dow has lost 860 points in the first two days of october. Thats roughly 3 . Fearing the worst, industrials, these companies that specialize in construction, big machinery, turbines, a sector thats been hurt by bruising but slowdown in u. S. Manufacturing poses a new challenge for industrials with softer demand from machinery goods and backlogs on the rise analysts say Companies Like deere and caterpillar may be forced to sell stocks. Now back to you. Seema, thank you. Josh, theres another Industry Group within industrials thats been selling off the last couple of days as well, despite the fact they dont have the same sort of exposure to the trade war or Global Growth store. Thats defense names any thoughts on that this has been one of the best sectors to be in over the last five years, done extraordinarily well, relative to the overall market and relative to the broader sector, industrial sector i think when you get a moment like this, the dow is down almost 1,000 points in two days. Sometimes you dont sell what you want to sell you sell what you can. A lot of these, big liquid stocks people have huge gains in them they dont feel silly selling them theyre not down 20 on the year like the other industrials you put yourself in the mind of a portfolio manager, you have to make some sales. You sell what you can. And sometimes you say to yourself, that doesnt make any sense what about earnings growth, what about good ceo, that aint the workday to day. You do what you have to do to get to the 4 00 bell business wise youre doing great. Auto stocks underperforming the market after data was released today lets bring in phil lee bow fber this conversation. It was a mixed report had you better than expected results from ford and Fiat Chrysler these stocks all sold off partially in sympathy to the market and this is as good as it gets in terms of auto sales in north america. The expectation is that down the road we see them slow down the one stock we want to focus on here, General Motors. The reason were looking at gm, down at least another 3. 5, 4 today, down 10 since the strike started december 16th, those talks continue guys, as long as those talks continue but we dont see any sense that theyll be resolved, dont be surprised if we dont see more pressure on that stock. Expectations around tesla as well, what are those. Yep we well, it all comes down to the q3 delivery numbers, which we are expecting, whether its today, in the next 24 hours. We will be getting them soon when they come out, the number to focus on, 99,000. That is the expectation in terms of deliveries in the Third Quarter. It would be a record slightly higher in the Second Quarter. If its dramatically different than that, then we could see pressure on the stock. Very quickly, phil, i want to pivot you to Airline Stocks getting crushed, that delta warned about will this be a broader issue for the airlines thats why you saw all of them moving lower. Theyre down 3 to 5 today. Couple of things about delta first of all, once the wto decision came out, allowing the u. S. To potentially put tariffs on goods from europe including, potentially, airbus fuselages, delta buys u. S. Airplanes, there would be a tax on them theyre urging the white house not to do that you also saw that there is still Strong Demand out there, despite these concerns. Phil lebeau, thank you. Names that are much more consumer focused. Its not really speaking in code paint by numbers possibility of recession, that theyll sell off consumer cyclicals. Autos have the shadow over them for a long time. I think that you can pretty much look across the board and say if you had a prerecession trade script, this market is falling doesnt mean its right. It looks thats the way its moving. Wto rule iing i would say tr is generally improving i dont know that its going to spoof folks. In autos, without a doubt. I dont think its remotely priced in. Tech stocks a major drag on the market today josh lipton is following that for us. Surged more than 25 . Today tech is slipping as investors worry about the economy. Check out apple. Monster 40 move this year today its following despite notes, microsoft also in the red. Even satya nad ella surprised us with that new folding smart phone and check out the smh negative today keep in mind investors have piled into the chips smh up more than 30 this year guys, back to you. Josh lipton, thank you. Josh brown, what isr semis telling us is it a similar story to some of the early Economic Indicators . I said before that i feel like transports, in many ways that semis, in many ways, are new transports for over 100 years, it was heavily predicated on the movement of physical goods around the economy of course, that makes intuitive sens sense. The primary market, primary end use r. So much as they echo and its n not. Relative outperformer over the course of the three trading days. Yeah. It had another trip up almost to the tie hoois and the other day. Just under 7 00, 6 30 left of trade. We briefly went down 5 h00 poin. If youre just joining us, we bring you uninterrupted commercial free coverage into and after the closing bell on the right side of your screen in the biggest which weres and losers of the day. Bottom of the screen, you can see a preview of the next few stories were going to cover as we approach and go through the close. In terms of the dow right now, which is down 489 points, one component in the green, johnson johnson, bucking the trend today and meg tirrell has the details on why meg . J j is up after they reach a settlement in the first opioid case, agreeing to 20. 4 million for two ohio counties, making it themaker to settle to avoid going to trial. There are still thousands of cases consolidated in litigation they see these settlements to a first step in a broader resolution and extrapolate that the j j settlement amount could be around 4 billion, much less than the 10 to 15 billion estimated by wells fargo back to you. Meg tirrell, thank you. Josh brown, is this a situation where bad news isnt as bad as it could have been and thuts stock is rallying . Yeah. You know, when you have some sort of tort action or potential for action, or various attorneys general swarming around Something Like this, then you compress it to this and get some sense, okay, this is going to end. Were going to get through this. Thats something you can read into this. Lets have a look at the volatility index mike, youve been digging into this. Yes the fever kind of spiked a little bit in the middle of the day. We got up to 21 on the vics. Oneyear chart puts it in context. This selloff has not had as much intensity in august, august 5th, we spiked up to 25 its been a relatively contained little pullback the last couple of days, at least so far obviously that tremendous runup in the 30s was at the climax it kind of tells you that were on alert but not yet in panic mode for the vix its been an 80 tlieni ideclin volume tomorrow youll hear people saying were pretty oversold even though were only 5 of the highs in the uptrend. What is your take on the vix, josh it doesnt signal anything about the future it tells you whats happening now. The dow down 400 plus i can pretty much guess where the vix is going to be. At the level its at now, is that still cheap for protection relative to your fear level for yourself at the moment if you were using options as your preferred method of protection and say this is going to get worse, were only down 5 from the high, then yeah that would be a place i think you could obtain cheap enough insurance. Then the question is, what are you trying to insure if youre over invested and feel that you have too much exposure to the market you have another option you dont have to henl it. You can take it off. The dow is down over 5 unpoints with three minutes left to the close lets send it over to Rick Santelli for a check on bonds, about a big effect on equities this week, rick. Cross fertilization after yesterdays number we look forward to tomorrows Service Sector ism we covered 20 basis points, hovering a basis point above that if you go to the tenyear, 175 to 158, but definitely the 30year bond was briefly unchanged, look at tens minus twos, twomonth high basically now were going to go to cord courtney at the nasdaq not all nasdaq stocks are created equal. Were going to focus on the consumer srt, retail etf, that has been selling off to a much broader degree than the regular market, down 2. 5 . Thats concerning. Whats held up this market best buy ceo said yeah, i saw it was hitting a ninemonth low but we havent seen the weakness yet. Shares of best buy are lower today and Department Stores. Thats a format thats largely in uestion, going forward. Are Department Stores going to be aplace where consumers will want to go these two names here, these premium accessory and apparel makers tend to see these bigger selloffs on market selloff days now to bob pisani at the new york stock exchange. Thank you very much, courtney s p 500. Its been a pretty wild ride today. We closed at 2940, went as low as 2875 before 1 00 eastern time we have bounced off of that. We are sitting at 2887, but not far from the lows for the day. There was talk about the health of the consumer, whats going on one big ticket item did pretty well today, lennar announced excellent earning results overall. Talked about positive wage growth, lower supply overall, new high for lennar. Pulte also hit a new high. Not so much a new rally in the Energy Sector, we continue to see many stocks hit new lows, marathon oil, a lot of these exploration and Production Companies hitting new lows and theres the closing bell Dow Jones Industrial is down 491 points s p 500 down 52 points if youre just joining us, welcome to the closing bell im wilfred frost. And im morgan brennan. The dow finishing down 491 points, 1. 8 lower today believe it or not, thats actually off the lows of the session. S p also finishing down 1. 7 , down 52 points nasdaq as well much lower, 1. 8 and really across the board, a lot of selling with every sector in the s p in the red. We were down 500 points for moments in that last ten minutes of trade but just closed above the level. Still a lot of selling as morgan pointed out. We have breaking news on trade Kayla Tausche has the details. After getting a green light, the u. S. Government is set to release a new list of tariffs on European Union products as soon as tonight according to senior officials from the office of the u. S. Trade representative. This list is set to include aircraft as well as agricultural and industrial products. Aircraft will be hit by a 10 tariff the other product lbs hit by a 25 tariffs. And were awaiting details exactly which products will be included these tariffs will appear in the federal register within the next few days and were expecting that these tariffs will take effect october 18th according to these officials. Just before the tariffs are set to take effect, the u. S. And eu are sit to have a meeting over trade. Thats expected to happen october 14th unclear what, if anything, that meeting could yield. Important to note it is a few days before that october 18th effective tariff date. Were on watch for that tariff list to see what it includes when it comes out, wilf. Certainly the u. S. Is wasting no time in announcing its actions after this ruling came out and senior Officials Say if brussels tries to retaliate in response that it believes it has no basis legally to do that. Kayla, does the administration think of the eu as a totally separate issue to china, or does this indicate that broadly the administration is upping the ante on trade in general . I think it does separate the european issues from the chinese issues theyre on somewhat parallel tracks here, wilf. Boeing and tax benefits from Washington State thats expected early next year. There is early european auto tariff there are a few mile markers for the u. S. And eu on trade negotiation lines have been open but so far little progress according to officials has been made. Mike santoli, how does this factor into what weve seen in the market in general . A little defensive crouch i wouldnt say particularly about this issue sort of priced out, i think, any kind of on trade i think its a matter of looking through this list on tariffs in terms of products that it applies to and then figuring out pricing implications from there. Josh, whats your take on this as to whether or not this will spook the market further on trade . No reason for this. On a parallel track the president is screaming that Interest Rates are too low and thats whats holding back the economy. Korpgs respect holding back operations because 1. 85 is too much of an Interest Rate to borrow at and invest thats not the reason. This is the reason now were going to expand it further . Its absolute madness. I completely dont under if you had some success doing this with china, then you said lets do it now with europe. You have no success doing this with china. I also would point out, the eurozone economy is very weak already, particularly some of these sectors that are going to be in the eye of the storm and whether theyve been more exposed to the china trade, theyll certainly be very exposed to this. Its definitely a region that might not directly influence u. S. Growth but directly influence sentiment and yields and all of that, mike, has significant ability to if he cant the markets here. Sure and trying to push the markets in a direction theyre already kind of leaning, which is into this growth scare. If, in fact, thats how the markets take it it will just reinforce it nor now. Bny melon, i want to get your take on these retaliatory tariffs on some goods being imported from europe and what it would mean for a market moving forward. This is just another incremental negative for the market for most investors, they were not focused on the european tariffs at all to the extent weve not gotten anywhere with china, it does feel like a piling on and an increasing of the negative sentiment, making it very hard for the market to move forward here. Alicia, today with this kind of setting, down 494 points on the dow, was there anything that you were advising your clients to buy, any sector that looks cheaper and sees this selling as an opportunity eventually, there could be an opportunity. What we see is a really choppy market moving forward. Its one of those strange markets where its very dependent on macrodata we have the ism Services Number coming out tomorrow, bls number on friday and these numbers are really going to tell us whether the manufacturing slowdown here in the u. S. Has pevted over to keeping the economy afloat, the consumer and services section, and we actually need the data to see it when you have a market thats so dependent on signals like that, its very hard to invest we see chopiness, volatility and wouldnt be surprised to see it move and the tactical level testing. Josh, it seems to be pricing in a greater chance of a rate cut at the end of this month do you think that happens . So, i think it does only because of market direction. And that can change quickly. I really do believe that all the commentary, all the data that goes into the fed decision, at the end of the day, they look at sentiment and sentiment, the best possible measure of sentiment is the s p 500 i do thiching the 2 hnk the 200 day average factors in a lot of bloomberg terminals in the Federal Reserve these days, much more than there used to be. That sounds bad but it makes sense. We reorganized the whole economy around the wealth effect it comes around three places did you get a raise . Is your house up in value and how is your 401 k doing its not ludicrous to say that the fed will look at whats going on in stock marks. I think were moving closer toward that moment. Also in a datadependent mode out of the last meeting, the fed was watching for the pace of activity you get an ism below 48, whether you think that number is imagine being or not, its enough to say fine we want to try to get ahead of this, pending fridays jobs numbers. With the sentiment worsening and momentum moving against you, is that enough to move the market a fed rate cut . Yeah. Incrementally, it could be. Were not in disaster mode right now. I dont think it matters that much that 25 basis points doesnt matter. Couple of weeks ago we might have had that cut with the data looking strong. Thats coming into october. Imagine getting the rate cut and the market sells off anyway. That would be the only evidence you need that quite likely at this stage, is it not . July that happened. The global trade that will tell you that the market is now fixated on whether or not the earnings estimates going out to 20 are safe because of not where rights are but the International Trade situation. Alicia, i want to get to you on this debate who do you agree with and why . The fed cuts again at 25 basis points but, you know, money is already inexpensive and corporations can borrow. The issue is, do they want to . And do they want to expand i dont think another 25 basis points is going to help the real economy all that much. We will wake up tomorrow morning with global yields lower, which will probably pull our tenyear lower as well. And thats a problem then you kind of get this reinversion on the two tens, which is another recession signal the problem with the trade issue is that youre just pulling the long end down. Were debating whether the fed can do anything to turn Market Sentiment around. I do feel for Christine Legarde goi ining into her new job. Its not helping. What do you do in the short term to offset now tariffs on top of, manufacturing slowing down eurozone data is not going to improve in the short term if these tariffs come into play. Banks that are zombies. They had a chance to do what we did, put them all through reorganization, create buckets of bad assets and let those work through. They didnt do that. They covered it up theyve been doing this thing where now theyre cutting further into negative territory. What thats doing is taking already fragile bank balance sheets, making them worse. And the United States can do fiscal probably not now because they want to kill each other. Thats the difference. Theyre separate governments, have different regulations, different tax regimes. Its not going to work i dont know that its as simple as oh, well just cut more or now well buy european etfs. Not going to work that zblae House Speaker pelosi and Senate Leader mitch mcconnell, on our air earlier this week, float infrastructure. That would be great i root for it. Lets get over to bob pisa inform i with a check on biggest losers. This is about watching the consumer, engine of Global Growth you want to watch big, big names that have done really well this year your costcos, home depots, starbucks, nikes and milk doncd. Starbucks already a little bit week 20, 15 drops thats certainly a sign theres concern about that. Consumer, two big ticket items today, going in the opposite direction. Housing was great. Lennar had outstanding numbers today overall. Yet we saw ford weakness there overall. And housing is up 16 , ougauto manufacturing is down 11 . Lennar, new high for lennar. Great numbers, ford disappointment there, General Motors also to the downside. Finally, etrade, just a press release just out from etrade, they are matching zero percent, zero cost commissions for equities and etfs. Ameritrade did it yesterday and Charles Schwab earlier in the week. I want to pick up on that story with you we were discussing it before the show. People are waiting for commissions to be lower. Now theyre zero everyone sold at the same time i wish they hadnt done that its a huge win for individual investor, for my clients when we buy and sell various stocks and etfs some of them the client has to pay a commission on. Barry and i woke up this morning and made our client costs lower by getting out of bed. So for my standpoint im glad theyre doing it we got the call from all of our custodians this morning, dont worry. Dont worry. Were doing it, too. Were doing it, too. We even got firm dates youll not hear me complaining. You see a stock like lennar, closing up almost 4 in whats been a pretty rough session, some rebustness there in the Housing Market how closely are you watching that do you see it as an outlier or potentially read through that, the economy here is holding up better than the mark has been fearing . The rate cut went to work we lower the 30year Mortgage Rate and timely are seeing some light in the Housing Market, which has really been very sluggish for the entire recovery we just havent really seen an acceleration firsttime housing buying were seeing that now. Ultimately thats what we dont see a recession coming you see fundamentals still working in the economy eventually, well filter through. The issue really is if you dont have ceo confidence moving forward, if you dont have Small Businesses willing to hire, then you are really going to hit the real economy on the consumer side and the trade issue is pivotal here it is not noise. Its fundamental to actual economic decisions that corporations are making. Alicia, josh, thank you so much for joining us today. Now stocks selling off for a second day in a row with all the major averages eraising their gains as economic slowdown persists david rosenberg, chief economist. Very good afternoon to you both. David, you must be a little embarrassed. You were so bull esh fish for s. Talk us through, david, the amount of data weve seen this week and whether you need to see it confirmed now by services and jobs on friday to really confirm the bearish outlook youve had for so long. The problem is that by the time you wait for the confirmation as an investor, your head has been sliced off. For all the talk about what a low share of the manufacturing of the economy, it reminds me of all the pundits coming on your show 12 years ago, telling you what a low share house something. Talking about the powerful effects of housing and now manufacturing has on the overall economy. So, it starts with a producing sector, then with a lag, it hits the serviceproducing sector the reason services are so slow to move down, social services and Education Health care are not cyclical what moves first when heading into a recession is the economic sensitive sectors and theyre behaving classically as they typically do head of an economic downturn its not different this time around by the way, its not just the ism breaking below 48. Look at the transports to utilities strength index its broken down its slumped more than 30 coming off an inverted yield curve, small caps are within four Percentage Points of an official bear market its not just about the Economic Data there are sign posts in the fixed income and equity market telling you that the economy will be slowing down further from where it is right now. Do you agree . Yeah, i agree with most of what david is saying in terms of i think were seeing visible weakness the weakness is, i think, born out of that downturn of oil weve had. The trade war, thats really hurt inventories and the Business Cycle and we had fed tightening last year i think these cumulative effects are definitely a drag on not only manufacturing, but, of course, Investor Sentiment i probably dont agree, you know, where were going to break with david is the idea that this downturn is the start of a cyclical recessionary dynamic. Instead its just, you know, a correctio correction. So, tom, where are you in terms of your forecasts the next six to 12 months i think this sloppiness has been communicated by the bond market for some time we wrote that the ism would likely break below 50 because of what the 10, 30 yield curve was telling us it followed the course we expected now well start to see the benefit of fed easing, huge vintory correction on top of that from a market position. The call ratio has gone wonky today. The strength is about to touch 30 thats a tactical signal most of our clients are sitting on cash, and are really bearish. To us, the most unexpected thing, the thing we thiching is most probable is a big thing. David the last time we saw a contraction in manufacturing data and socalled investor recession was, what, twch to 2016 it didnt bleed over to the consumer side of the economy why does this feel different to you . We are in a totally different bulk of uncertainty right now. In 2016, were we in the middle of a global trade war . The answer is no in 2016, the fed at that point had only raised rates once go back to 2016 and look at the shape of the yield curve it was steep look at the shape of the yield curve today. Its flat. Im continuously amazed that the people who dismiss the yield curve cycle in, cycle out. The shape is as flat as a pancake. Its interesting that nobody ever has a problem with the yield curve when its steep. Its a wonderful indicator when its flat people question its voracity we have a different shape to what the bond market is telling you, were in a much different bond of uncertainty related to trade and coming into 2016, if you remember, were heading into the election donald trump got elected what nobody is talking about is this impeachment proceeding and ukraine file its not what its doing to donald trump its what its doing to joe biden and elizabeth warrens prospects. This is what people are looking at behind the scenes, is the rising prospect that we could see a democratic sweep in november of next year. And with Capital Gains taxes, dividends taxes, we could see a radical shift in fiscal policy weve never seen before on top of the trade uncertainty i would ask tom, who is a friend of mine, like who is going to be committing capital to the economy in this bond of fiscal and trade uncertainty . What happens here is that you start cutting your capital spending, spending intentions, which, by the way, is in the data and then with the lag you start seeing it in hiring retentions and employment thats when it starts hitting the consumer its a quarter or two out but i see it in the tea leaves. Tom, your response . I think david nailed it on the head the biggest risk to this market would probably be a shift in the white how. Investors would be pretty nervous about what it would mean to have, you know, a democratic president and so yes, i think in a way its kind of circular. I think the market holds up, i think trump stands reelection. If the market tanks, it raises the prospects that david just mentioned. David, one quick final question what did you thempg of the extra tariffs on the eu might have to eurozone growth and whether that can infect the u. S. In the short term. Absolutely and on top of that the brexit uncertainty germany, the engine of the entire continent, is pretty well either in a recession or on the precipes thereof no country, maybe outside of albania, operates in a vacuum. What germany means for the entire eu and the eu as an economic unit is bigger than the United States. Revertebraerati revertebraerations this forecast right now from whats happening by the opening months of next year. I think whats happening in europe is very important i think at the same time all these things are keeping the u. S. Dollar sky high, which is a turn tourniquet on the economy right now. Josh lipton has some news josh Biggest Issue of our time, how apple ceo tim cook has talked about daca in the past, immigration policy known as deferred action for childhood arrivals cook has repeatedly spoken out on behalf of these dreamers in tweets, conferences and opeds now hes taking his support a step forward cook, apple hr chief deirdre ow bry obrien filing a brief, the first time theyre lending their own names as well, the brief stating we are distressed at the process of ripping our daca colleagues from the fabric of our company. Our country made a deal with a highly vulnerable population interested in a Bright Future and we should keep that deal a currently employs 443 dreamers across 36 states, working in a variety of roles, hardware and software engineers, retail store geniuses, operation specialists. In total, remember, they employ 90,000 people here in the u. S. Its not just important to cook. It really does reverberate across the Tech Industry microsouth of thes brad smith has called protection of dreamers a humanitarian obligation and economic imperative guys, back to you. Certainly another very big factor for quite a number of companies. Josh lipton, thank you for bringing us that news. Bed bath and beyond results are out. Courtney regularn has been digging through those numbers. Morgan, for the fiscal Second Quarter for Bed Bath Beyond its a bit of a mixed result looking for earnings at 3 comparable sales also worse than expected down 6. 7 , the street had been looking for those kocop to fall but just 5. 4 . That is about in line with what the street was expecting the company says theyve made substantial progress on their search for a ceo and do expect an announcement to be coming soon they also call it Good Progress on their four main priorities, the first of which is stabilizing sales. Im not totally sure that happened here. Shares have been bouncing around after hours, at least a bit positive by. 2 . Back to you. Third dashboard of the day, lets send it over to mike. Icy hot a bit of a contradiction. Mixed signals here if you look at sentiment gauges. Fear and debride index, something we track once in a while. Real marketbased indicators of risk appetite. You see its declined to levels not too far above the extremes of august. We got to those august lows after a multiweek pullback. People got anxious and bearish whats good here is that were coming off levels that werent that extreme to the upside it wasnt as if everybody came into october really bullish and has a lot of that to unwind. Thats a good part on a more mixed signal if you look at this Asset Allocation by the American Association individual investors ask people every month whats your asset al gas station . 19 bonds, 14. 5 even though people are a little bit worried, tactically feel like the market is fragile, theyre pretty much into stocks especially if you look at the ratio of stocks to cash, its at a high level historically. The market itself has gotten people, even if theyre nervous about it. Mike, thank you very much up next on closing bell, behind the global slowdown, markets under pressure today well discuss the big risks with former Morgan Stanley Stephen Roach when we return 494 points seema mody standing by with a check on industrials Courtney Reagan is here, and deirdre bosa has a check on markets. A rough month for the industrials. One is due to the slump in u. S. Manufacturing and the ongoing recession. Two, the uncertainty around the upcoming trade talks and if tariffs will be escalated. Remember, earnings from the major industrials like united tech, 3m, caterpillar have been hurt by tariffs and the ongoing weakness in china. Oert factor in play here and the more important splapgs for the recent underperformance is the stronger dollar. That, of course, makes goods sold overseas in markets like china and europe more expensive. Another subsector within industrials getting caught up in todays selloff, defense in aerospace names, lockheed martin, raytheon and General Dynamics all down. Back to you. Thank you so much, seema. Lets check in at the movers on the nasdaq. The nasdaq did close off session lows, still down 1. 6 . Weve given up those september gains for the nasdaq it was a broadbased selloff. When you look at the kind of stocks were selling you had the semi selling, biotechs, consumer names across the board. Only ten names ended up positive in the s p 500 when everything settled out at the end of the day. Semi conductor stocks, not as much as what we saw from some of the other groups American Airlines and United Airlines those, of course, are part of that transport group we talked about multiple times during the day today and those were the biggest sellers, really, in the nasdaq 100 although we had walgreens, and verisign, just an indicator that anything that could be sold today was. Back to you at the new york stock exchange. Thank you, courtney deirdre bosa has more on these selloffs. Near record lows, some of the enterprise names, theyve held up better but even theyre getting hit in this months selloff zoom, pager duty average return from nearly 120 ipos this year is just 4 , according to data from renaissance capital. Half are trading above their offer price, guys, really underlining this double standard that is emerging in the ipo market guys deirdre, thank you so much for that time for a cnbc news update. Sue has that for us. Whats happening this hour, everyone, President Trump continuing with his harsh words for House Intelligence Committee chair adam schiff as he denies reported kens of a phone conversation at the center of his impeachment inquiry. You had a great call with the president of ukraine it was 100 . You have the transcript. And then schiff went up and as chairman of the committee got up and related a call that didnt take place he made up the language. Hard to believe. Nobody has ever seen this. I think he had some kind of a mental breakdown. Russian president putin sided with with President Trump in the political storm thats raging in washington, saying trump had done nothing wrong by looking into possible cases of corruption in ukraine. He also briefly joked that moscow would hack the 2020 president ial election. And prince harry and husband wife, meghan, meeting with the south african president in johannesburg after she sued a tabloid newspaper that she said illegally published a personal letter she wrote to her father the daily mail says it will aggressively defend the charges. Youre uptodate. Ill send it back to you. Sue, thank you very much. The u. S. Announced tariffs on european goods, including 10 on aircraft and 20 on agriculture products, set to take effect october 18th for now on how escalating trade tensions to impact the economy, lets bring in former chairman of Morgan Stanley asia stephen thank you so much for johning us lets kick off with those new tariffs being introduced on the eu are you surprised to hear that and how significant an impact might that have on growth and trade between the two regions . Im not supplies rprised. This has been brewing for a while. Actually compared to the tariffs battles with china, this is small change its really not an enormous material consequence, but its emblematic of the fact that political leaders, especially our own president , feels empowered to deploy tariffs as an instrument of International Economic policy without any appreciation for the tragic history of actions like that in, say, the 1930s or other periods as well. Stephen in terms of those trade talks between the u. S. And china, theyre expected to meet again here in the u. S. Next week what do you think is baked into the market in terms of expectations and do you think we could actually, potentially, get some sort of deal in the coming weeks or coming months well, i think, you know, theres hope, morguen. But i think realistically, the best we can look for would be a superficial deal, giving chinese the opportunity to buy more soy beans, possibly some airplanes, but the big structural issues on Technology Transfer and intellectual property, theft, allegations of illegal subsidies, were nowhere on those. And the u. S. Insisting on enforcement mechanism that china is not going to buy into so, no big deal. Maybe something cosmetic and even that, i think, is a stretch in light of other issues that are on the plate between the two countries right now. Where do you stand at the moment, stephen, as the Global Growth environment and whether were likely to hit a recession in certain reasonables and how soon that might arrive i think were in a pretty precarious place, wilf the issue in terms of trade tensions, which i dont think is discussed because it sounds a little technical, is that we live in a supply chain world so when we impose tariffs on one country, theyre being spread immediately to many, many countries around the world i think the numbers on a study i just read showed about 73 of all the expansion in fwloebl trade since the early 90s has come through sploi chainsupply chains china accounts for that centerric activity were not squust putting tariffs on china, but a number of countries in east asia, including japan, korea, taiwan and others and thats why global trade is so weak thats why the Global Economy, from east asia to germany and elsewhere in europe is being hit hard by this bilateral seemingly bilateral tension between the u. S. And china. Stephen, just quickly, final question on your latest situation in hong kong. Well, i think its tragic i think its a great city. I lived there for a number of years. I think hong kong is going to have a difficult time reclaiming its mantle as an economic hub it makes it difficult to manage their external relationships as well. Stephen roach, thank you for joining us today. Thank you. Phil lebeau has details on tesl tesla. The company reporting q3 deliveries falling shy of wall streets estimates estimate on wall street was for q3 deliveries of 99,000 vehicles tesla says it delivered 90,000 vehicles, 79,000 in change were the model three, model s and x a little after hours as they report slightly weaker deliveries of 90,000 vehicles. Just looking at it, sx is 15 growth, model three softer at 8 . Yeah. Dont get too caught up in the percentages. Look at total number everything is coming out of the freemt plant and going all around the world theyve suffered from lumpy deliveries what were looking to see more is a consistency, quarter to quarter, to quarter from tesla 99,000 was the expectation people had, nice growth from q2 at 95,000. 97,000 a little better but not at the rate of 99,000. Phil, thank you. For more, lets bring in James Albertine from mile one and david wolstern from morning sta star. Now that im on the corporate side running strategy for large auto group, we watch demand for electric vehicles very closely even though it may have fallen a little short of wall street expectations its still a very competitive Vehicle Price point perspective, but still there arent a lot of manufacturers that have enough volume right now in dealerships to address that nand that tesla arguably has had on evs for the past seven, eight years in the scheme of things whether they do 1,000, 500 or barely miss as they did, what it matters is what does it look like in five, ten, 15 years . But my other reaction is this is a sign of kind of like everyone who wants a tesla is starting to get one at this point and cars respect at a very affordable price point. Model three is not a mass production vehicle there were negative numbers as well yet all the stocks traded lower today. Does that seem warranted to you . I think were certainly long in the tooth weve seen sales the last year or several years even and there were some factors out there. Storm activity impacting florida and flooding in the region aside from that, as dealers were having to make more of our profit from the used vehicle side of the business it has been year to date low doubledigit rate. Pressure on the new vehicle side were offsetting that with other aspects of our business, watching credit very closely, duration of some loans outstanding in the six and sevenyear territory we want to take some time to understand, is that a fupgs of the lower rate vern and banks getting more comfortable lend i ing. Or are consumers start to show signs of weakness . Thats the question when we think about where are we in the cycle. To this point we feel pretty good about it. Thats what were watching. Key question for investors, absolutely james and david, thank you for breaking down those numbers and the instant reaction appreciate it. Stock getting slammed overall in todays session, finishing the day down 494 point well speak with one strategist keo says the fear in the mart is creating an opportunity stay with us devices are like doorways that could allow hackers into your home. And like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. Up next, a merger pulse check. Mike santoli has a look at how 2019 stacks up in years past in the world of m a. To introducing products faster. To managing website inventory. And network bandwidth. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. [spokesman] if youve tried colleg group cheering shed, snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu lets send it over to mike santoli for his final dbd. Mike wilf, alone together. Its a bit of a check on corporate coupling volumes this year. So clever. M a volumes through i know im trying to spice it up today. Through nine months, obviously the Third Quarter just ended on monday, memorier market tallies up the volumes, broken up by quarter. M a volumes by quarter, in trillions of dollars so right here what you see is essentially roughly on par with the threequarter pace weve seen over the last five years or so if you annualize this number, you would still be down 7 versus last year and arguably maybe youre going to see a little backtoback of a slowdown the next couple of months because of some policy uncertainty and other things one of my takeaways on this is given the fact that overall value of market cap in the world is up sub stapgsly the last five years, youve not seen a rise in m a to the degree you might otherwise expect, even though bond markets are very generous right now. It seems companies are not in that mode of feeling they have to buy scale whether that changes or not is unclear. Expansion and cycle has been going on a long time and hasnt gotten into a frenzy. Investor banks has been a good year for ipos that could fall off a lot in q4. Exactly. Mike, thank you. Up next, were all over todays major market selloff, dow closing down 494 points. 1. 8, almost 1. 9 today well get the bull case, though, for stocks when closing bell comes back filmgate is growing really staffing a small bquickly and. Is challenging. I needed to fill a production coordinator role. I was looking for someone with specific skills. So i posted a job on linkedin. Maribel had all the skills i was looking for. And looking at her profile. I saw shared connections. That was a plus. But the most important thing. Is the ability to connect to people and she had it. And i knew. She was the one. Post a job today at linkedin. Com grow well back. The dow finished day down almost 500 points led by a slow down in on weak data tony divider at cannacord ingenuity. Thanks for joining us. Thank you for having me wilf. How many stocks are above and below the level. From a tactical level, first of all, you have to have from a tactical level when more than when more than 90 of stocks are trading below the 10day moving average and at the close according to bloomberg it was 8 of stocks trading above. When it gets that washed out youre within ear shot of a bounce it may not be the next day but when i went back and look over the last few years you get a lift you dont want to sell into two really bad days like that. This has been happening underneath the market for the last couple weeks. What happens is it ends up in the indices. The other stock has done it. Where do you expect the s p to end this year. 290550 plus or mine our target for next year is 33. 50 i think im low. The guys printing the money globally told you the game plan. So we come on tv we try toll you why its good or bad or should or shouldnt the guys printing the money told you that theyre going to print more of it if the data got worse. Guess what the data getting worse. Even janet yellen last friday said the fed is too optimistic on the u. S. Economy. So i dont want to fight the fed knowing that news back drop can create volatility. Isnt that a message you would expect the market to intuit in other words you shouldnt have to say this is whats happening why do you think the market is fixated elsewhere. It happens each time because the data gets worse. Weve said it so many times the people are sick of it. Were in the third mini recession the manufacturing secretary frere global chaos creates the per sthaepgs youre in a menny recession what that has done is created bear market in the s p or down like close to 20 and then the 10year bond yield doesnt bottom for months after that last Fourth Quarter was discounting the slowdown that were having now the 10year is reflexing that. So in our opinion its time to be offense every. What would you be buying on a day like today. History shows we love opinions ill tell what you the data shows. If you believe that the 10year has bottomed and were not going into recession which i could not i would not believe give are fifen the which that credit is acting and the stim la active effect on housing and autos. But if you think the 10year bottomed which i do history shows you play offense use weakness for the opportunity. You want to be in consumer cyclicals financials, industrials info tech, even the more cyclical sides of info tech im not scared to call for a correction ive done it many times. I didnt think we would go down 20 twice this cycle this is not one of the times because the entire Global Central Bank community is trying to figure out a way to playbook it work. Right . And when that happens you dont want to bet against that kind of liquidity coming in. Tony divider thank you for joining us thanks for having me. Up next, your wall street look ahead, the key things every investor needs to watch heading to the new trading day when closing bell returns carl, i appreciate the invite here. As my broker, what am i paying you to manage my money . Its racquetball time. thumps ugh carl, does your firm offer a satisfaction guarantee . Like schwab does. Guarantee . splash carl, can you remind me what youve invested my money in . Its complicated. Are you asking enough questions about the way your wealth is being managed . If not, talk to schwab. A modern approach to Wealth Management. If not, talk to schwab. At cdwwell weve made our happy,office pet friendly. S. [ bleat ] [ cooing ] maybe a little too pet friendly. Well you know cdw can design a Mobility Solution with light powerful devices from lenovo to make your people more productive in or out of the office. Anyone have any questions before we go . Thats great cause i really need to get out of here. Snake people are freaking me out. Hey sheryl, you have a sec . Nuh, uh. For work place productivity you need lenovo, and it orchestration by cdw. People who get it. 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. More details on trade just coming in. Kayla tausche has the latest. Ustr just putting out the list of the products affected by the higher rates of tariffs. Include at 10 tariff on airplanes and other aircraft and a 25 tariff on a wide variety of goods, including irish and scotch whiskeys, wools and wool suits and kashmir sweat frers the United Kingdom and a wide variety of cheeses, olives and wines from spain, france and the uk. Certainly a lot of what we expected, a lot of what we learned earlier this morning but certainly a curated list to hit european products most frequently imported into the United States. Of course you do have u. S. And eu negotiations taking place on october 14th and these tariffs would hit on october 18th just days later. Kayla, these are 10 tariffs, you said. 10 . Or 25 . 10 tariffs on airplanes and aircraft only. The rest of the items on the list will see a 25 tariff but that 10 tariff on affect, wilf, we are seeing companies respond. Delta airlines put out a statement earlier saying companies from have to commit to buy the planes year in advance and there is a Financial Impact on travelers on employees. Kayla, thanks so much for that great reporting. Stock up on trips overseas. Frankly after a selloff like that on that news time to buy a scotch or glass of french wine before they take affect. Thanks for watching big sell dow town 494 points fast money begins right now. Live from the Nasdaq Market site overlook new york citys stiemts square this is fast money. Im melissa lee. Traders are tim seymour, karen finerman, dan nathan and steve grasso beginning with breaking news stocks slammed as a major selloff hits wall street the s p 500 posting the biggest twoday drop since august. And the selling widespread all 11 sectors finishing in the red. So the question tonight is simple is it time to get worried, tim. The data seems to be getting worse. So we have important data coming up tomorrow and friday ism services and we want to believe this is the more important ism number as opposed to manufacturing number which got everybody spooked