Transcripts For CNBC Closing Bell 20140925

Higher and how many, a lot, are lower now. At least theres some green there you take a look across the dow, pretty much everything in the red. A look across all the indexes, with that russell 2,000 thrown in as well, having another day, off more than 1 . The nasdaq, the underperformer, apple today could be playing into that, down 3 1 2 as some concerns about the new phones, the new operating system continue to swirl. Lets figure out why its all happening. By the way, the 10year note, there it is down to 251. Yes. Key levels here, got levels on the equities, also got levels on the ten year to watch carefully. You see there, Closing Bell Exchange under way, peter anderson, doug kote, heather hughes, peter costa and rick santelli. Peter costa whats the bounz the florida . Why the selloff, whats going on . Theres a list or a plethora of bad news. This is more like a bowl ya base of bad news. This is a possibility of having the Interest Rates go up earlier than expected. Up . Yeah i have been saying that by december and two of the main reasons, we dont have a lot of volume, the market was right for this and continue to see this volatility for the next probably the next couple of weeks vix traders happiest in the world. So, too are the bears in this market, short sellers havent had much this year to hang their hat on. Do now. This the are you is a in the camp this is because fisher was making hawkish comments today . Obviously, we have had an ultraaccommodative Monetary Policy and Richard Fisher is alluding to some of the financial stimulus, perhaps creating bubbles in the high yield market and the junk bond space. Look, we have embarked on stimulus for the past five years continuously, whereas financial conditions have somewhat normalized, markets are still near alltime high, even with todays drop. Disinflation is deflation is no longer an issue. And no longer an issue . Not right now. And we are not seeing that an issue relative to the rest of the world. Youre seeing deflation in europe, in japan and youre not seeing that play out yet in the u. S. That is another concern why the fed may hold back on raising rates, not seeing that inflation yet. Gas prices are lower and food prices somewhat high in the core, i guess, cpi, Consumer Price index and pc that they look at, still somewhat low at this time. Peter anderson, last time you were with us, you were talking about how you would like to buy things when you find value there. Are you finding more of it this week as a result of this, in other words, ready to buy this dip yet or do you think theres more to come . I dont think theres much more to come. I think that, you know, the idea of the rates increasing finally is roosting and i think that people are catching up to the fact that rates will rise and i dont know if they will be why are we all talking about rates rising on a day the ten year is moving lower . [ overlapping speakers ] well, sooner or later, she is going to raise rates, right . I think the economy is Strong Enough that we will see that in the First Quarter. You see window dressing on longonly managers now. Whats going to happen, managers will see round trip trades, they are going to be selling into this weakness and next quarter, just going to be buying the same stocks im doing im buying right now, because i do think that this is just a temporary weakness. Doug, i would like you to weigh in here as well, i no he we are going to talk about stocks with you, but im surprised this theres so much unless we are thinking through in the fed is going to hike rates and thats gonna hurt the economy and so as a result, the ten years moving lower rather than higher, otherwise, i dont really understand why the those concerns be weighinging on the market here today. First off, we are having a whiff of normal volatility, all coming out, todays durable goods number minus 18 hid the underlying strength in that report on Business Investment and look for tomorrows gdp, the final gdp report, going to get a surprise close to 5 and thats whats gonna set the fed in motion, fed tight thing and i think is getting the market anxiety. You think that good news would be bad news, chances of a rate hike seener rather than later . Yes are i do i think the fed is increasingly behind the curve and we have strong fundamentals on manufacturing, the consumer, corporate earnings, corporate earnings next quarter is looking fantastic. Rick, we have teed up an awful lot for you to respond to i can feel it, from chicago here, waiting to jump in, whats on your mind here . Well, first of all, lets clear up something, if Charles Evans would have said what Richard Fisher said, that would have moved the markets. Yes, thank you, rick. Thank you. Wait until next year for a long time and i really have Great Respect for him and agree with what he said, but i dont think that moved the market at all once a hawk, always a hawk, Richard Fisher . Give him some credit, rick. Another issue is about raising rates orates rising and you kind of hit on it, kelly. Listen, anything beyond the overnight rate or repo rates, you know, those are market driven, god only knows what those can do when the fed has to normalize. Canada has 1 , raz rates three quarters of a point, really doing nothing, but it does have to begin at some point and i think todays a great case study that we could see rates rising a couple of 25 basis points, you can see the rest of the curve still flat with rallying our weakness in the economy because the economy does have some weak areas but not weak enough, they have a zero Interest Rate policy for this many years. Lets remember i was going to say this is all relative, i dont know why we talk about these revels as if they exist in a vacuum. The market signal seems to be indicating, equities moving lower, ten year lower, this is a classic risk off kind of environment, why are we talking about rate hikes . Well, because, kelly, i think [ overlapping speakers ] not a perfect market right now the mathematics i dont always work out. I think we are expecting too much correlation right now that if the equity market trades down, because Interest Rates are supposed to be going up, why are Interest Rates down now . And i think if you look at it too closely, like within the day, youre going to be disappointed, the longer term, say a month, you start looking at longer trends, you will see that mathematics play out. I just think its a little bit naive for us to think that in these day intervales are, you would actually see the theoretical relationships between those two markets. I think we are looking just fair point, just saying we have seen days in this market, we know what they look like, days when you get a strong number, a tenyear move to the upside. Today feels more like the environment we have seen when the end of qe, the last couple of times around hasnt allowed the fed to totally back away from the market. You start looking at the technicals, i think thats very different from looking at the fundamentals. If you have noticed, most of todays news has been on the technicals, the relationships between those two markets. And to me, thats not a real fundamental, with all due respect to the technical analysts out there, its no the a fundamental reason why we should be analyzing the markets, look at true value to get insight, i think. Heather . Inflated, driven policy mark thats we are undergoing right now, in terms of propping up the market with stimulus, youre right, the math kind of is thrown out the window from an academic economic standpoint. However, important to remember between 2004 and 2006, we did increase rates by 25 basis points 17 times, yet the markets still headed higher. So, that is something to also Pay Attention to. Peter, what are you watching here in the last minutes of this trading day . What do you want to see here . I mean, we were down 262 points on the dow, well off that low right now. Do you want to see us go out on the lows . See some strength come in here . What do you want . Honestly, low of to see this blow off a little bit. I would like to see the markets sell off, get it out of the way, not really at a volume level its that significant. You could look at the dow and say, yeah, its down 260, 270 points, but the volume only 700 million the end of the day its not really not confirming it. I would like to see some sort of significant selloff toward the end of the day. I dont think were gonna see it i would love to see that i would like to see that start putting, you know, getting the people out that dont want to be here anymore and give you an opportunity to buy. Peter, your three, youre in control, go press some bunts. Youre on the floor. I dont do much from d. C. Thanks. Everybody chip in now. We will leave it there for now, about 15 minutes to go here and the dow off 234 points. Thanks very much. Appreciate it everybody. Thanks, guys. Wisdom trees chief Investment Strategy over there, speaking with us exclusively. Wait until you hear if the downturn will be short term or not. And how to navigate the choppy markets when Interest Rates start to rise. A doubleheader, also coming up, jim grant, founder and editor of the influential newsletter bearing his name will stop by. We will get his reaction. Dallas head president , Richard Fisher saying the central bank could raise rates next spring and the way the market is react, speaking to the evolving outlook. Jumping are the gun but jim has a wonderful book coming out in november. Yes. Some of us had an opportunity to look at it terrific book, maybe we will get him to talk about, do that coming up as well. Also coming up, chugging higher, our dominic chu highlights Railroad Stocks which have been defying gravity lately the past year. We will find out how much upside potential they may have left in the tank when we continue on closing bell. Stay tuned. Cute little guy, huh . This guy could take down your entire company. Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. Sfx ambient park noise, crane engine, music begins. We asked people a question, how much money do you have in your pocket right now . I have 40, 53, 21, do you think the money in your pocket could make an impact on something as big as your retirement . Not a chance. I dont think so. Its hard to imagine how something so small can help with something so big. But if you start putting that towards your retirement every week and let it grow over time, for twenty to thirty years, that retirement challenge sfx crowd cheering might not seem so big after all. Selloff on wall street today, we will point out the dow from the alltime highs of just last friday is down 2. 3 from that high. The nasdaq is down 3 what did i say, i threw that note away, 3. 1 off the 14year high set last week. The s p down 2. 6 thereabouts, russ the one that suffered the most, hit an alltime high in july, down 8 1 2 . Was it earlier than that, hit the alltime high . Feels right, doesnt it . Down 8 1 2 . Those secondaries. Four trading sessions base dploirt dow to give up 2 . An eventful week. Thats for sure. One of the issues we havent discussed, isis on the move near baghdad today, this just hours after the u. S. And its allies bombed Oil Refineries in syria to cut off financing and fuel for the terror group. Our john harwood has the latest on that story for us from washington. John . Is bill, on the heels of his big u. N. Speech yesterday, president obama continues to try to recruit allies to the u. S. Offensive against isis, but increasingly that focuses on the oil raise fineries in syria, that air campaign does, following the principle of follow the money. These smallscale refineries provide fuel to run isil operations, money to finance their continued attacks throughout iraq and syria and they are an economic asset to support future operations. Producing between 300 and 500 barrels of Refined Petroleum per day eyes sill is suggested to generate millions of dollars of revenue from these refineries. The most important thing in iraq is trying to hit isis on the ground and roll back their advances. Ultimately, Ground Troops are going to have to although the president says they wont be american Ground Troops, are going to have to take and hold the territory that isis has claimed. Thats going to take a long period of time, guys. All right, john, thanks very much. And typically, when there is trouble in the middle east or some geopolitical i shall a you that could affect the price of oil, you get an instant reaction in the oil markets. And thats not exactly the case this time around. Nope. In fact, crude oil has been moving lower steadily, today, around 92 a barrel. Joining us now with his thoughts on where it goes from here is Dennis Gartman from the gartman letter. Dennis, good to see you. Welcome back. Always good to be here. Thank you. How weak underlying all of this is the oil complex, dennis, if despite all the unrest we have seen across the middle east, its continues to move lower and lower . Actually, kelly, in the past four or five days, crude oil has actually started to turn slightly for the better, not dramatically slow or so, but what weve seen is the front spreads, the nearbies gaining upon the deferreds which is a difference than we have seen in the past month and a half. Crude oil was coming down, the term structure was turning very bearish, the front months were losing relative to the back, now in the course of the past several day the front months are gaining relative to the backs and thats where the footprints are left of what i used to call informed money. So, it was easy to be bearish of crude a while ago, i dont think one should be terribly bearish of crude down here. Whats interesting, too is that the headlines that weve seen from the attacks upon refineries, we get this vision of refineries, such as the ones we see on our east coast or down in the gulf, massive refineries, what we are talking about in syria are literally nothing more than small pots, very small black markettype of activity, not the type of refineries that weve seen. And thats go ahead. I was gonna say, they are its isis has been using them to finance their operations but its not in the scheme of thing also, not that big an interruption to the flow of oil, thats for sure. But what about this mindset in the price of oil lately and why you know, we talked about this geopolitical premium that was in the price of oil for so long with brand above 105, our own wti above 100, suddenly, that was evaporating here and we are not seek the kind of response to geopolitical issues this we would normally get in oil. So, why the turn in the mindset . Is it fundamentally based or whats going on here . Bill, i think two reasons i think you can take a look at, one, everybody should know this by now, we are, in act if a, creating a lot more, finding a lot more, producing a a lot more crude oil here in the United States than anybody might have ever guessed a mere two years ago. Fracking is very real. Its taking place. Its ongoing. Its going to continue. Two, we are really not paying much attention to the fact how much less we are driving in the United States and how much less demand there is for gasoline, which had heretofore been the real product, driving prices on to the upside. So, demand is falling, not because the economy is weakening but because we are learning how to use our cars better and more and more shop to make it a simple statement, doing more and more of our shopping online and having fedex press bring it to us rather than going out and doing it on our own. A lot of these newer vehicles are more fuel efficient. Absolutely. Dennis irk bring this hup, i dont know if you saw this report from wood mckenzie, they think because of the production boom in the u. S. And the fact that we are basically not exporting any of this oil, the u. S. Benchmark, 30 bucks below the International One is a spread like that possible and what point did the economics mean that u. S. Producers begin to shut down this capacity instead of pumping endlessly . Kelly, got a very good point and you actually all you have to do is take a look at what Canadian Crude Oil has been at times. There was a while back, several years ago, when canadian crude was 45 below wti. So you can get those sorts of circumstances where cash crude oil, depending upon where it is being produced and whether it can be delivered upon, can get to huge discounts. Im not surprised to see somebody make that statement at all weekend we are probably going to get, before its done, a year and a half ago, i made the statement that i thought before it was done, we would probably put pressure upon the frackers and the only way we will put pressure upon the frackers is to take wti on the board down to about 85. Maybe we will get there. Im not going to be a presser of that issue, but thats what its probably going to take, probably going to take 85 on the board and then a large discount for the basis for spot crude to shut off that sort of production. Whether thats going to happen or not, im not sure. Before we let you go, dollars, still gonna go much higher from here, do you think . I think this is the start of a protractible market, bill, in the dollar, i think money wants to move to us, i think money wants to move to canada, i think money wants to move to safer place, today, we are actually seeing a move to japan, which doesnt make a great deal of sense to me, but i think this has the look of what happened back when reagan took over and and the dollar went on a 2 1 2year long protracted run to the upside, i think we just started to be honest. So as as other members of the cnbc family have said, king dollar seeps to have gotten recrowned. With janet yellen. Yes. As well. Queen dollar we call her. Thanks, dennis. Downward pressure on crude, which as we mentioned the last can um of days holding up a little bit better but here, not the case for the market. Down 245 points right now and the industrial average decline of 1. 4 . Todays selloff could, could it present a buying opportunity in thats going to be the question, especially the Railroad Stocks. They have been surging big time over the past year. Our dominic chu looks at where theyve been and where they could go from here after the break. Also ahead, wisdom trees chief investment strategist, i always get that wrong, luciano. Also, jim grant of the wisely read newsletter bearing his name, speak with us exclusively, talk markets, fed policy and more coming up on closing bell, stay tuned. Siracusano. All the way until the am. New aleve pm the only one with a sleep aid. Plus the 12 hour strength of aleve. The smartest or nothing. Plus the 12 hour strength of aleve. The quietest or nothing. The sleekest. Sexiest,. Baddest,. Safest,. Tightest,. Quickest,. Harshest. Or nothing. At mercedesbenz, we do things one way or we dont do them at all. Introducing the allnew cclass. The best or nothing. Means keeping seven billion ctransactions flowing. G, and when weather hits, its data mayhem. But airlines running hp endtoend solutions are always calm during a storm. So if your business deals with the unexpected, hp big data and Cloud Solutions make sure you always know whats coming and are ready for it. Make it matter. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. This is charlie. His long day of doing it himself starts with back pain. And a choice. Take 4 advil in a day or just 2 aleve for all day relief. Honey, you did it baby laughs what used to be known as classic red off day, dow off 250 points, near the lows of the session, ten year moving lower a bid in gold. Dollars higher. Dominic chu has mother and where the gains may have been. Transportation stocks a hit with the rest of the overall market today, they are up, you know, margin ally, the course of the last few weeks here, this he have been showing signs of strength, at least recently, we will call it, specifically, if you look at the railroad companies, like said, since the end of august, traders and investors have been slowly bidding up shares in the bigger names in the industry, even with the pull back today, the road and Rail Industry group is still one of the best performing in the s p this month, of september. So, union pacific, first of all a positive performer since the end of august, shares up 2 in that timeframe, thats much better than the 1 1 2 drop for the broader s p, the same for norfolk southern, csx, Kansas City Southern, those big names. Now, Kansas City Southern is actually up around 3 and since hitting a low of around we will call it 88 1 2 dollars back on february 18th, shares rallied by over 30 . As for the professionals seeing some of the stocks headed, norfolk southern, analysts have a price target, 17 per share, around 6 higher than current prize. Analysts split with a 46 buy rating, call on 54 from having a sell or at least a hold rating. For csx, average analyst price is 32. 75. Thats just 3 above the current price here, onethird of analysts have a buy rating and twothirds have a hold. As for union pacific, Analysts Expect 113 and change, or 6 above the current price. 70 have a buy rating here and shares, we will call it, 30 , have a hold. No sell ratings for any of these three Rail Companies but unless these target prices are lifted, you could say potential upside may be limited as those target prices are within, bill, kelly, 3 or 6 where current levels are now, guys. Back over to you. Dom, thank you, ties together with the story we were just discussing about oil. Any hiccup in the boom, rails carrying the stuff could get hit. Something to watch. Like the lower ploos i to fool their trains but they like the higher price to move the stuff at the same time. Yeah. We are heading to the close here. We have got, what, 33 minutes left in the trading session here. The dows down 250 points now. Exchange traded fund volumes have been soaring. We are asking going to discuss that and how to read gains from todays selloff with wisdom trees chief investment strategist next. That would be Luciano Siracusano. Jim grant will be joining us. Fishers a comments that a rate hike could come next spring may have sparked selloff today. Get jims take on that coming up as well. Stay tuned. Whenwork with equity experts who work with regional experts thats when expertise happens. Mfs. Because there is no expertise without collaboration. You cant get any thbetter than that. Trains. Siemens trains are not your grandparents technology. Theyre something thats gonna change the cities we live in today. I find it so fascinating how many people ride this and go to work every single day. Im one of the lucky guys. I get to play with trains. People say, wow, we still build that in the United States . And we say, yeah, we do that corporate trial by fire when every slacker gets his due. And yet, theres someone around the office who hasnt had a Performance Review in a while. Someone whose poor performance is slowing down the entire organization. Im looking at you phone company dsl. Go to comcastbusiness. Com checkyourspeed. If we cant offer faster speeds or save you money well give you 150. Comcast business built for business. Welcome back, just joining us, yes, a selloff day. Fourth consecutive day the dow has seen a triple digit move, three have been to the downside. Yesterdays may have been a head fake, we had that 100point gain, in i rate, down 248 points right now on the industrial average. Maybe just the autumnal equinox. We will get into that later. Yes. All eyes on this market selloff and so lets bring in wisdom trees chief investment strategist, Luciano Siracusano here joining us at set to explain why you should pay close attention, especially to queen dollar. The dollar. Today. You think thats the big move we should Pay Attention to . Yeah, i think one of the drivers for returns the next two to three years, most important thing happening in the Global Financial system is the fact that the bank, central bank in europe, has got rates at zero and starting to print euro there and more accommodative, bank of japan continues to do it very aggressively and they are going to have zero rates there, probably for a few more years a at time when we are going to start to probably raise Interest Rates on the short end some time next year. That differential in Interest Rates is going to be the next driver, think, of Dollar Strength and starting to see it reflected in the market, particularly the move in the last six weeks. So, where are you seeing what are the ways to play it from an etf view and where are you and how much are you starting to see people, whether its retail, institutional, hedge funds doing this already . Well, i think the first thing to think about if youre internationally invested in stocks acrosstheboard. A lot of the equity markets are up year to date in their local currencies, you adjust it back to the dollar, they are down. The reason they are down is because their currencies are down. Euro down 8 , yen down recently. I think the way to think about it, if you have International Equity exposure through an etf or mutual fund, think about hedging out the currency going forward. I see where youre going with. This you guys have a big etf on japan that does exactly this. Ize recall, we do have one in europe. So do others, the important thing to appreciate the impact currency can have on your total return of your equity port foal and portfolio. It helps the big multinationals who rex sporting around the world. Makes them competitive. Thats what drag guy and kuroda are doing, fighting inflation and trying to get their economies competitive through an indirect currency manipulation, the net impacts is thes going to depreciate their currency while hopefully ours strengths, not just because of what we are doing in washington but because of what the economy in the u. S. Is doing. The same time, our rates will eventually go up, which will contribute strength of the dollar here, the rate do go higher, plenty of people who fear what the market response will be at that time. What do you suggest people will do . A shortterm haircut, havent had one in two or three years, likely see some selloff, not at the end of the tape but october, people think the first rate hikes come, theres still a lot of margin in the system. People are borough at zero to invest in the market. Some access out of the market, shortterm rate goes up, the equity market can continue to really, two, three, four year, after the rate hike. Dont get a market top until years in after the first fed hike. I wonder, and you know this better than anybody, you see the numbers come in, so many people have piled into these bond funds anticipating a rate hike frankly not getting, i understand make around the corner, how much risk is there if im sitting in one of these funds now, big are these funds, again what kind of losses could people be facing if this whole scenario doesnt pan out . Depends the duration of the bond fund, sevenyear duration or twoyear duration . Impact sensitivity to Interest Rates, the other vicks how liquid is underlining security, invested in treasury, credit or invest in some of the bank loans that dont settle as quickly. Some legitimate concerns in parts of the fixed income market, not because they need to have structure, because of liquidity of the underlying instrument. We have seen so many stories if im looking at my etf, what is the most important thing to look for, the presence of these loans instead of other types of assets or what . Interest rate exposure through duration and do things to shorten duration and the second thing is the underlying investment capacity of the instrument, invested in u. S. Bonds, Investment Grade bonds, high yield bonds. Trade over the counter or by appointment or someone is faxing a document to someone else . The more liquid the market i think you want to turn to, particularly as rates start to rison at equity side, i would say probably more large cap than small cap going forward. Internationally, definitely, if you can, figure out a way to hedge out the currency impact because if the dollar rallies, anything you are getting on the stock side gets taken away on the foreign currency side moves against you. People turning to high yield bonds, used to call junk bonds, those funds to take advantage of them because thats where you could get something in return, but ahead of liftoff, as the feds gonna call it, they start raising rates, junk bonds have been lagging here lately, do you look at that or i think you need to make some distinctions between the real, real junk, distressed junk. The junk jer it is, the higher the yield. You might want to tilt toward the Higher Quality junk bonds, the junk bonds, they can help with you higher income but as strengthens, some of those companies, their default risk is lower. The economy is improving, the time to get very concerned about your junk Bond Exposure is when you think you might be headed into recession, when you really want to pull back, because thats when default risk goes way up. Just a last question on these etfs, because we know theres no such thing as a free lunch, if i want to get expoesh this you are to japan or europe without the currency risk, what kind of risk does that itself entail . How do you hedge . How do you get rid of that effect . What else does that expose me to as an investor . On opportunity risk, today, the yen rally, the yen get stronger, you were neutral, you would lose the benefit of an appreciating yen, but if you want to get long in the end because you think the yen will appreciate, get long in the yen, dont get long in the yen and the stocks of japan, the stocks in. Gentlemanen do better when the yens depreciating you. Wisdom tree has etf thanks shorter, neutralize the currency within the et. If itself so youre not taking on the currency exposure. The easiest way i know of a way to do it. Others that do the same. Good to so you, luciano. Thank you for joining us today. Appreciate t as always. Heading to the close, 23 minutes left here, the dow holding steady. Art cashin came by and gave us an astounding number. Said there were a lot of buy orders on the close. Fee that makes a difference. Not moving it at this point. We will see. Also happening after the close, we have got nike reporting results, big dow component, theres not many in the green today. And i dont think any, in fact, nike down 1. 25 , tell you which numbers to watch out for next. We will also give them to you. The second thing at the tape, right after the bell, keep it here. Also later, jim grant of grants Interest Rate observer talks bonds, Interest Rates, todays telloff, king dollar, much, much more coming up here on closing bell. Stay tuned. S difference when you trade with fidelity. 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A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. Welcome back. Pressure across the board today, the financial he is especially taking on the chin, weighing on the dow. The nasdaq hurt by apples underperformance, it was off more than 3 at last check. Morgan brennans here to track some of the movers for us, cannot forget about the nike earnings coming out, radio sit in we cannot forget about nike, first, kick it off with one of the few stocks popping today, shares of Swift Transportation up about 10 right now. Swift reaffirming higher Third Quarter earnings, guidance in a company release. Another winner, travel port, thats up about 4 , nearly 4 today, the travel Services Company showing a strong debut in its first day of trading on the new york stock exchange, but a different story for blackberry, those shares taking a tumble, those are down about 5 , bgc down grading the Smartphone Company to hold from buy, saying that tomorrow mornings Earnings Results could be underwhelming and finally, check out nike, trading lower ahead of its earnings, due after the bell, Analysts Expect fiscal First Quarter earnings of 88 Cents Per Share on revenue of 7. 8 billion dollars. Right now, thats trading down about 1 . Should be getting those results in just a little while. Back to you, guys. Indeed, morgan, thank you. 18 minutes to go here and still, we have got oil, do you want to say it . Whats that . Coming off the lows. Theres a drinking game going on out there, apparently, with some viewers. There you are. Welcome. First time today. Tivo. Not 5 00 anywhere in this country at this point. Nasdaq feeling the brunt of the pain today. We will have a live report from the Nasdaq Market site in times square coming up in a moment. Stay tuned. Ai use helps you be Ready Anytime the moment is right. Cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid long term injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. Welcome back. We are coming back a little bit, heard from art cashin that there was a lot to buy on the close, may be one of the reasons we are starting to see a little bit of levitation here, the dow still down a hefty 226 points or one and a third percent. Nasdaq, bertha coombs, off today 2 . Yeah, its been 2 . That has been led by apple, the story today as goes apple, the worst performing sector in the s p 500 and certainly the nasdaq 100 today has been among the leading sectors to the downside because of apples massive weight. The big apple today, you could say, it has caused about 16 to 18 points to the downside, depending on trading. Apple, meantime, has not traded below 98 or closed below 98 since september 9th, date before they announced theism phone 6, effectively seeing the shares give up all of the gains since the launch of the iphone 6 with all of the issues that have arisen since then. But a couple of stocks, we are seeing a little bit of buying, have come into the green, lifted up a little bit off of the lows, broad com one of them, lower much of the day the ceo in an interview this morning says even though they are not going after 4 g, still thinks that broad com will be included in a lot of wireless technology, so its one of the few nasdaq 100 stocks in the green. Discovery communications has been the other that has held up much of the day, a little bit weaker here at the end of the day, discovery buying 60 stake or taking a 60 stake in a new channel that is going to be a familyoriented cable channel. So it is just holding up positively. And today, whats very interesting, on a massively down day, got some tech stocks today that hit alltime highs, not all of them held on to the gains, but go pro notably continues to march forward, you have your doubters about that very niche product. Facebook today hitting an alltime high, Vertex Pharmaceuticals and sell gene an alltime high, along with the biotech index, guys, even though we are seeing big profit taking here, some of the stocks technically still look pretty strong. Back to you. All right, bertha, thanks very much. Joining us as we head toward the close, bob kaiser from s p capital iq and one arthur carbon from ubs financial services. Your spider senses started to sense something was up last friday, didnt you . Yeah, it was this week has been traditionally one of the weakest in any year, after the september expiration and the autumnal equinox and wd genn said more reversals occur on the 22nd. The note on that was fascinating, when you wrote about t. All came together. As odd as it may sound, historically held up, hasnt it . Absolutely, may see more volatility tomorrow. Bob, if you had to cite a reason underlining the volatility, what would it be . A couple additional point to make to what the a mentioned. [ inaudible ] hasnt been able to come anywhere near the highs made in march. Now, look at september, the 18 trading days, including day, eight of those days so far this month have been plus or minus three points of the 2000 level, momentum is fading. Now you layer in on top of that, how to macroin the landscape, changing quite dramatically, stronger dollar gonna weigh on profits, europe weakening more than thought, been reasons for people to reassess portfolios. My question would be is this should we be surprised we are having a weak september, autumnal equinox so often in the past sore this a game changer, as far as youre concerned . We have been one of those bulls who thought there was a like had ihood of a correction, thought it would come earlier, market gets down to the 1950s, buying opportunity, closer to the 200day moving average, overall, the fundamentals still very solid, people are reassessing the macrolandscape and questions in the marketplace. I was going to ask you what levels are you watching right now . I think very near term, the 1963, 1967, if we go beyond that i think this may become a bit more protracted, maybe even move into the month of october. And we know when they move into the month of october, thats rarely pleasant. So, i mean, i dont want to get ahead of ourselves here, this could fine lib the beginning of a correction, i will use the cword here. People are starting to avoid risk and one of the components of this selloff that we had were remarks by Richard Fisher of the dallas fed warning there was a real risky profile building in the high yield and that spilled right over into the russell 2000. By the way, that russell off 8 1 2 , i think . By far, the laggard, as you point out. Secondaries have really lagged the blue chips here. And add one more thing that has only recently come on to the radar is keep an eye on sovereign risk spreads in europe, because draghi announced, he admitted that the European Growth scenario is unwinding faster than anyone thought. See sovereign cds spreads move higher, could be more on the downside on the risk off trade if that starts to develop. If this is the market pushing Central Banks broadly speaking for some kind of response to call it collapsing Inflation Expectationser whatever is it possible that it comes in the form of ecb and phil blaine, ukbased investor, was saying, look, maybe its the European Central bank thats going to buy u. S. Treasuries here . They wont buy even if yields go up, thats definite. I think the u. S. Fundals are very sold. New home sales this week was the strongest level we have seen in five years and new home sale prices are 5 1 2 higher than the peak of the housing bubble in 2007. Could be a little whiff of inflation coming down the road. Arthur, you were telling us a while ago, a lot to buy on the close. Thats starting to narrow here. But we have come off lows pretty over 1 billion to bion balance. Thats lot. Now, under 200 million a lot has come in. And i would just add one thing, we may be getting to the point where mr. Drag hi has his clara pela moment, wheres the beef. He has been talking for some time and now got to put up. Yes. We will do whatever it takes, maybe its time he did it. We will see if that he is at case. Gentlemen, thank you both. See you later. Coming back with the closing countdown. You guys are stick around, see how we do close here in a few minutes here, but we do have that big Earnings Report coming up. Nike reporting earnings after the close. The dow component could set some of the tone for tomorrows markets here. Stick around for those numbers, coming up. Plus, jim grant talks Interest Rates, bonds, previews tomorrows gdp number that final number for the quarter. We will talk about that coming up. Youre watching cnbc first in business worldwide. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. Making our way into the last four minutes of trading here, the major averages as they stand at the moment, the dows down 1. 3 . S p down 1. 4 . Same thing for the russell. Its the nasdaq thats getting clobbered today, down 1. 8 . Let me show you the dow for this week. We had those two big down days on monday and tuesday. Tuesday especially, we were talking about that mythical death cross on the russell 2000, where the moving average was crossing the 200day moving average but rallied back yesterday, turns out that was a head fake, at least for now, move to the lows of the week, down 230 points right now or 1. 34 . What has gone higher continually has been the dollar and today, its up at least on the dollar index here, up to 8520. What about the dollar . How much higher are we in for a real bull run here, do you think . I think so. I agree with what Dennis Gartman said, you have got the Central Banks obviously trying to get the yen cheaper, trying to get the euro cheaper, its an uphill fight. It will be a little while, and going to hear the multinational squeal ask ms. Yellen, we need help. Put pressure on the multinationals, bob pisani joins us, what a day. Earlier in the week, concerns about lower china growth, now we have concerns about no growth in europe and potentially, if the russians actually do start enacting sanctions or seizing property of foreigners in russia, as was discussed today, the possibility that could throw europe into a recession. Thats very serious issue. On top of that we have got mr. Fisher talking about higher rates, but what he is doing is reminding us all, wait a minute. Richard fisher talk about higher Interest Rates is not new. More, aggressive from him. I get t. He definitely moved the high yield market today. Is there any question about that, ar this you are . Absolutely not. That spilled over into smaut caps. On top of that i think he is reminding everyone that we have had problems in the past when the fed ended its program, we did this twice before, we have had problems, i think that was a little gentle reminder, too, that everybody said, you know what, good point. Gdp, get that number tomorrow what are you guys expecting that . We had a guest on a little while ago, he thinks we could see a 5 number for the quarter. I think north of 3 with some confidence, 3 1 2 to 4, 5 is a little bit of a reach. I want to point out coming back to the dollar, macrolandscape is clearly shifting, the gdp differentials favor the u. S. Versus europe. The Interest Rate, Monetary Policy differentials favor the dollar as well so the Dollar Strengthening, makes perfect sense, starting to see evidence the macrosituation changing, starting to bleed into other markets. Now, concerning the fed, im gonna back up bob a little bit. Janet yellen herself said that considerable period is highly conditionable. So we have probably one strong panel number away from a spike in yields which will also feed the idea that the macrolandscapes changing and the stock market is the most forwardlooking of the markets perhaps, starting to sense a little bit and maybe protecting itself a little bit. Sensing the end of the morphine drip here. Just a safe evaluation until things get a little clearer. Earnings start to come out, we get nike at the bells, as a matter of fact, and then start in ernest, of course, after the end of this month, what do you gays at. Is and p capital iq expecting . Third quarter consensus, 6. 8 , companies typically beat 2 to 3 , looking the a number 9 to 10 , sets us up well into 201 a, through year end this year into 2015, 10 to 12 earnings growth, fits well the u. S. Economy improving. A hot gdp number tomorrow, might not be good for the stock market, right . Might not be good for the stock market. You will have to see how the yield, particularly the ten year react as, they begin to spike up, be a tough day. Look at the volume here, arthur, not physically unusual, but volume in the s p futures very heavy today, clearly were some sellers around. Thank you, guys, all of, appreciate your time. As we go out here with a decline of 255 points, very volatile week, what happens tomorrow . We will find out coming up, we got the nike he wererings and jim grant on the second hour of the closing bell. I will see you tomorrow, kelly. Thank you, bill. Welcome to the closing bell, everybody, ill kelly evans. It looks like we are going out on the lows of the day for wall street, the fourth day in a row of triple digit moves, this time, sharply negative direction, in fact, giving up 258 points on a close of 1 1 2 . Look at the nasdaq, going out with a loss of almost 2 . The s and p giving up 32 points. This is important for a lot of people watching the charts here, closing at 1966. A lot of guys were hoping earlier today would hold that 1970 level. Not only did it breakthrough it but look like it is going to close on the road this there the. The russell, lagging, weak, off 8 1 2 , might be more now from its peak this year, giving up 1. 6 today or 18 points to the level of 1110. Talk it out with the panel. Joining me now is elon moy of the walks post, rebecca patterson, Michelle Caruso cab bra ir cabrera and jim najarian. Everybody is focused on the tide going out and figuring out who is going to be naked at this point, right . So, we saw an emerging markets, right . We are going to see the Dollar Strengthen, if the fed is going to be relatively speaking, the tightest ship on the block. And then youre going to see all over the place. Gone up every day for years now, a 2 pull back isnt to be unexpected. Sign of a healthy market or something i dont think its a big deal that we pulled back this much in one day. Lesss normal. Healthy we get pull backs along the way, i think the fed, do the degree we get next year, come along side a healthy economy, saw that today, durable goods, look under transportation was good, jobless claims were good, i think this was much more technical today than anything truly fundamentally changing. I have to agree with rebecca. I think the extent the markets are focusing on what richard fish said this morning, this afternoon out of mississippi said exactly the opposite. He is not looking for a rate hike until may 2015 or later. He is explicitly ruling out an earlier move. Thats really important. What we have heard this week from the fed is not a pocket signal but a developish push back. They are going to stop buying. Thats it right . Quantitative easing is ending. [ overlapping speakers ] we have known that for months now, why is that driving the market . Because you dont have a physical buyer in there going after treasuries. Dr. J, what do you think . You know what i think, kelly, if youre gonna lead me down that path, we are not the only determinate for the direction of our Interest Rates. Global pressures and demand for what appears to be a great asset class denominated in dollars would be our treasuries. Thats why youre going to continue to see downward pressure on Interest Rates in the short term. Whether its mid2015 or perhaps even in the spring of 2015, before we start going up, again, that will be determined by global pressure also not just our fed. Otherwise, people are missing the big picture. Oh, sure, its an important point. Look, we talked the other day on this program with Steve Liesman about how europe is exporting deflation to some extent. Rebecca, talking about better prospects, maybe the sign of a healthy market. What happens if you have Inflation Expectations dropping and lower today by some measures in any other point when the fed has stopped and tried to exit from quantitative ease. . One thing that was mentioned earlier and also by bob pisani earlier on the show is whats going on in europe and i dont know what to make of the russian threats today, if these just bluff, if thats posturing. But the thing i would worry about, if europe continues to get worse around that plus a stronger dollar affects guidance from u. S. Multinationals the earnings season, which kicks off in a week and a half that could be something that just keeps a lid on market enthusiasm. Now, whats funny about that is small caps should do better in that environment. Small caps are more domestic, more dollar centric, yet a really rough ride this year. The m and a and the dollar arent helping the small caps the way they should. I cant by live we are coming up on earnings season again, did have erin gibbs remind us of this point yesterday, surprised we havent heard more Companies Issuing negative guidance because of the effect of the dollar combined with some weakness overseas. This is when you start doing the screens of, okay, whos got more than 60 of the their revenue coming overseas and where youll start to see the warping signs. Why are we in the quarter right now . Has it been enough . The dollar very strong for the last several weeks. Very recent. But very recent. So it may be the next earnings sea season. Nike one gauge, after the bell today, im sorry, it is after the bell, get that any minute now in fact, a company that does have a lot of global exposure also, albeit in a different kind of market, not necessarily the most economically sensitive. Bring the conversation back to the concerns over inflation, what i would say is that, you know, you have seen the fed sort of be worried if Unemployment Rate falls too low, force the hand, tighten sooner rather than later, now starting to hear federal officials talk again about the concern inflation is not going to be high enough and that is going to be a reason to delay the liftoff even longer, so, even if you have the Unemployment Rate falling, as long as inflation remains below target and below trend, thats going to be, you know, another force holding, staying their hand. Dr. J, what happens if the conversation happening with bob kaiser and art just a couple of minutes ago if the markets kind of forcing Mario Draghis hand here, will that do it . Certainly could. And one of the best things to come out, by the way today, kelly, its never good for anybody unless youre a bear and short, not good when the mark its down 255 points. Or 260someodd points to the dow. But now, we wont have to hear headline after headline, read those headlines about how people are overly optimistic, how bullish sentiment is at an because it hasnt been, it wasnt and it isnt. Thats good thing for the markets, soss not good that the markets went down, none of my customers that want to be long markets for long periods of time are happy about that, but there are some opportunities, its also the end of the quarter, and i think people were getting ahead of what they were worried about next week and thats why they are selling today. Fair point, dr. J. What about the go back to what happened there there on the close. The last hour of trading, we went from kind of moving off the lows of the session with some strong buy orders to closing apple. I know technically speaking or whatever, that is just not the best signal usually. No, but its also something that im sure the bears would rather have had us rally 60 or 70 points into the close, finished down 180 instead of 260s, because when you get the wash into the close it sets us up for whats going to happen tomorrow morning in europe r i think we could get a spike in volatility out of germany and if we get that and a denial out of russia, that sets us up for a nice turn into tomorrow afternoon. I was just gonna ask, michelle, talk about russia and some of these rumors, word that was going around. Actually not a rumor. They published literally the words for potential lull, they could seize assets in russia this is tat for tat, what happened to one of putins very Close Friends in italy had several homes seized by the italians, wealth seizures. So we could see they said that is a possibility. Whether or not they are going to actually do it remains to be seen. Why would that account for, for example, europe . You got me. Germany trades a lot with russia, right, we have gone over that over and over again, start to see germans a sets seized by the russians . I find it hard to believe, maybe italian assets seized by the russia reasons, since they punished his judo partner. Rebecca, to that point, a last word with an eye what we need to watch for now and the days to come. I think in the days to come, we are going to have an ecb meeting, do we get more talk, more job owning, try to get the euro lower, russia uncertainty there, cause europe to underperform the u. S. , in my view at least, we have been under way european stocks for a while, think even with that European Central bank report under there, bad news good news, i think a while before we see a catalyst for growth for europe that makes we want to add. Continues to be a headwind for us as well. Responsible for some of the selling pressure we have seen today, talk more about it straight ahead. Dr. J, thank you very much for stopping by. Appreciate it. Thanks, kelly. Catch him with the rest of the fast money crew at 5 00, going to be talking to senior Portfolio Manager dan niles about his tech stocks to biin this selloff. Dont miss t reminder, apple was down 3 1 2 today, that went on the nasdaq a sea of red across all quarters them up next, going to go to all the major market floors and hear what was the mood of todays traders and whether or not they will be feel willing the same way tomorrow. Still ahead, im also going to talk exclusively with the ceo of magnum hunter. Despite todays massive selloff, this stock was up 10 . We will tell you why, straight ahead. Youre watching cnbc, first in business worldwide. Ers a diffen you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade, we looked for the best price, and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Cozy or cool . Exactly the way you want it. Until boom, its bedtime your mattress is a battleground of thwarted desire. Enter the sleep number bed. Designed to let couples sleep together in individualized comfort. Hes the softy. His sleep number setting is 35. Youre the rock, at 60. And snoring . Sleep numbers even got an adjustment for that. You can only find sleep number at a sleep number store. Right now, save 400 on our most popular mattress. Know better sleep with sleep number. Welcome back, we begin with morgan brennan. Shares of micron sinking 2, 3 in the afters, coming out with their quarterly earnings, they beat earnings estimate by one penny and revenue better than expect and the 4. 23 billion versus sometimes of 4. 16 billion, but Gross Margins came in light and that could explain why we have been seeing a drop in that stock coming in at 32. 8 and analysts were expecting 34. 5. So, take a look at that stock that, thats trading down 2 1 2 in the after hours. Look for the guidance too, thank you. The major indexes suffering major losses today, cnbcs market pros are here, bob pisani, rick santelli, bertha comes a and jackie deangeles here to tell us what the move was on the floor today guys and what to watch for breaking down this selloff. Bob, start us off . Smack on the lows, rather disappointing, coming off of them, looking at the s p 500, frankly, hopeful there could be buying but no buying energy throughout the day, see ending at the lows, Richard Fisher, dallas fed, reiterating rates might rise sooner rather than later, spring 2015, he is a hawk, took aim at the highyield markets, saying we were seeing extreme risk taking, look at these high yield etfs drop on that and that pled into the overall market. There were also risk off here, emerging markets were down, biotechs, solar, the high beta stuff all on the downside. Then we had some reports that the russian government may enact, may enact a law to seize foreign assets, certainly not good for europe, you can see what happened to germany on that dont want escalation concerns. No growth already. Maybe negative growth if that continued here. That was a big issue overall on the day, the two issues wayen at market. Rick santelli in chicago. I think mr. Fisher reminded everyone there has been problems in the fast when the fed ended its qe program. Having that in traders minds paints a picture of question marks, maybe thats what it was about, question mark. No question on things in treasuries, five and seven year auctions didnt go well, the two year did and when you consider that we were down three basis points in five, five basis points in tense and seven basis points in 30s, you get an idea that the curve flattened today and flattening of late gets associated with the riskofftype trade. We talk about yield and the tens, roughly threeweek low closing yields an of course jerk have a weak durable goods number, the weakest month over month change ever, but to be fair, it was following the strongest, 22 1 2 change that we had last month, so really wasnt the data and speaking of data, tomorrow, we will probably have close to a 4. 6 , Second Quarter gdp, final look around the block, of course, and our final look at september, Michigan Sentiment and that will lead me to the nasdaq, which had a huge day. What did you see, bertha . Real negative sentiment. Its interesting because we started the week with negative sentiment when it came to the small cap concerns about the technical break down in the russell 2000. Today, a big cap story all the way and it was really centered around apple, the trading in apple on a lowvolume day, saw twice the volume that you normally see over the last three months, more than about 100 million shares having traded hands and apple, after having hit that alltime high ahead of the iphone 6 launch, well, the technical woes have hit the stock technically today, closing at the lows of the session, also closing at its 50day moving average, so, starting to see a little bit of weakness, giving up all those gains it has seen here in september. The other sector to watch is biotech. Bob talked about that. Biotech this year has been one of those real big sentiment movers, started off the day at an alltime high for the btk index, ahca index, biotech index, some of the stocks starting at 52week highs today, they moved down along with the rest of the market, see if we continue to see that sale through on the Biotech Sector has been among the best performers this year. Over to you at the nymex, what did it look like . A volatile day at the nymex in lockstep with what we saw in the equity markets, a couple of key reversals i think are important to note. Start with energy prices, because domestic crude was down pardon me, up most of the session but then closing lower at the end of the session. 52753 a barrel. Then gas beat up as trades expecting a bearish report on inventories, got the bearish number they were looking for, but bid up nat gas at the close and finished over 4. Switch gears and talk about metals, gold was lower earlier on in the session. But then as equities started to sell off, you saw the gold market started to rebound, recouping some of those losses, gold closing the 1221. 90, up 2 1 2 dollars, not safe haven buying here, not enough of an upswing for traders to be convinced that the gold trade is going to work out. Rest of the metals, of course, grieve lower and because of the stronger dollar that we saw. The dollar expected to strengthen even more. If theres one thing to watch, thats what traders are saying it is. Kelly, back to you. Jackie, great stuff and great timing, took because nike earnings are now hitting the tape and our dominic chu has the headlines. Dom . Nike shares very much a focus for investors now, the health of the global consumer, at least a read it on it from nike earnings, the numbers coming in pretty good here. The numbers, 1. 09 a share, that appears to be comparable to the analyst estimates for 88 cents a share if so, a pretty handy beat on the bottom line. The top line, we have 7. 98 billion dollars worth of sales versus analyst estimates for about 7. 84 billion dollars. Also, one of the thing that a lot of traders and investors look for, it comes to nikes numbers is the declaration or the estimate of Global Futures orders, an indication of the future business coming down the line for nike. On a currency neutral basis, those globals futures orders are up 14 versus analyst estimates for a gain of 9 1 2 . So, again, 2350u67 churs orders coming in better than anticipating, earnings per share coming in better than anticipated and sales coming in better than anticipated. You can see why that stock is up 5 on a nice spike in the after hours session, kelly, more details as the Conference Call kicks off this afternoon, a beat on the bottom, top and future orders for nike, up 4, 5 in the aftermarket, kelly. Nice pump there, dom. Thank you. Robert plaza from Key Private Bank for his reaction with numbers and the panel. 5 is a big move for a company this large. Given the numbers that dominic read off, i dont think too much to say sounds like a good quarter from beginning to end. Isnt nike stock that has 70 of the analysts community positive, a lot of the expectations priced in to there are world cup quarter. Why do you think it is they will manage to move 5 high otheren a huge market cap . It really comes down to how many levels this he have to pull, dominant global brand, they are shifting trying to shift from being known for just a wholesale business to retail directtoconsumer business, higher security margins, faster growing regions outside the u. S. , also the potential to deliver higher margins, then with the global scope of their business, they are creating efficiencies in production thats flowing to higher Gross Margins. Said the Gross Margins increased 170 basis points, saying attribute to a shift in the product marks, higher average prices, continued growth in the higher margin dtc business, should we read that as the consumer is able to afford more expensive product or a product line this quarter that, in particular, was particularly good for them . They are in one of the best areas of apparel and retail, the athletic leisure, dont see too many people Walking Around wearing denim anymore, but you see yoga pants. With imin leggings. Yes. Yoga pants. You see a lot of sneakers. Moisturewicking shirts. And its just translating. Walk through any high school, what you see all the kids wearing you. Robert, just a last question, nike paying a significant amount to keep i think kevin durant, who almost signed a big deal with under armour for 100 million, Something Like that. In any case, does this suggest to you that they have no reason to slow down or back off on some of these mega,ing me da deals with the biggest athlete he is and stars out there . I think its important that they find the right athlete to have endorse their product and kevin durant comes with a you know, he is one of the more popular players in the nba. Theres nothing bad. Theres not a rap sheet coming out. So, he seems to be worth that type of money, just to avoid any of that bad publicity the other athletes in the news lately brought. At some point do you start worrying about the doll will aer . How much exposure do they have in terms of strengthening currency . Growth drivers is moving outside of north america, there is going to cause some noise around their currency, you hear them report, its always what the number is and then a currency neutral number. In order to try and show what the undereder lying strength is. And over time, the currency fluctuations really kind of even out. So as long as the underlying strength is there i think the stock will respond positively. Right. Robert plaza, thank you, as nike shares move higher by aer 5 after hours on a strong quarter, including that world cup spend. Appreciate it. Theres a new apple headache today, already battered by todays selloff often heels of benn bend gate for iphone 6, apple plagued by fake ads telling users the iphone 6 can be recharged in a my croak wave. Details ahead. The next also next, gary evans, the ceo of Magnum Hunter Resources, joining me exclusively as we look at the state of the imaging markets after todays selloff. We will be right back. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Stocks may have taken a beating today, but Magnum Hunter Resources held its own, even gaining 10 , how did the company manage to stay in the green today and has the recent i dont. In oil had any impact . Joining me now a cnbc exclusive is gary evans, Magnum Hunter Resources ceo. Good to see you. Welcome back. Good to see you, kelly. So, today, the news has a loot to do with your natural gas developments, you guys are gonna have another boom, it seems, in production, but i wonder, as other others in the Analyst Community are lowering their price target, im thinking of Morgan Stanley in particular, how can these project he is be economical in the long term . I think we stood out from the crowd because we announced yesterday one of the largest shale finds, people are excited about the large acre position we have and the fact that we can produce the large quantities of gas. Markets hurt, a gravitation of a lot of investors out of our sector now for some reason. 92 oil, 4 gas, i will take it all day long, happy with these price. What i was gonna ask. 75 next even, there is a lot of financing involved, for example, that may mean if we hit the level of, say, 75 should we get there, we could fold even further. A lot of the middle Eastern Countries have now got their economies dependent upon 100 oil. So, we all know saudi arabia is the big spigot over there and they have the ability to crank down Oil Production and they have done it many, many times. I apologize for breaking in here, have breaking news, may have to leave it there the president is also about to speak. We will let you no he in just a moment, gary hunter, thank you. Phil lebeau has breaking details on General Motors. Whats going on, phil . Kelly, i will make it quick, standard and poors has just raised General Motors Credit Rating to Investment Grade, going from bb plus to bbb minus, the second Credit Rating agency to put gm in Investment Grade. Moodys did it not long ago, Standard Poors raising gm to Investment Grade. Fill, thank you. Gary evans, if youre still there, under stastand we have ho let gary go, a couple of developing events we are following, guys. General motors shares they were up about a quarter today o one thing gary was talking about how and you mentioned as well, with oil prices, really important, i think to remember the social economic political kind of triankle with the middle east. Saudi arabia needs oil at a certain price so it can balance its budget so it has the cash on hand for subsidies, those buy them peace. [ overlapping speakers ] geopolitical effect that could have significance. Oil recovery on hold that thought. President obama coming to the podium now. As one of the longest serving attorney generals in american history, eric holder has borne that burden. And over the summer, he came to me and he thought six years was a pretty good run. I imagine his family agrees. Like me, eric married up. He and his wife, dr. Sharon malone, nationally renowned ob gosh gyn have been great friends to me and michelle for years and i know brook and maya and buddy are excited to get their dad back for a while. So this is bittersweet. But with his typical dedication, eric has agreed to stay on as attorney general until i nominate a suckers is and that successor is confirmed by the senate. Which means he will have a chance to add to a proud career of Public Service one that began nearly 40 years ago as a young prosecutor in the department that he now runs. He was there for 12 years taking on political corruption until president reagan named him to the bench as a judge. Later, president clinton called him back, so all told, eric has served at the Justice Department under six president s of both parties. Including a several day stint as acting attorney general under george w. Bushs first term. Through it all, shown a deep and abiding fidelity to our shared ideals as a people that is equal justice under the law. As younger men, eric and i both studied law and i chose him to serve as attorneys general because he believes, as i do, that justice is not just an abstract theory. Its a living you and breathing principle, how our laws interact with our daily lives. Its about whether we can make an honest living, whether we can provide for our families, whether we feel safe in our own communities and welcomed in our own country. Whether the words that the founders set to paper 238 years ago apply to every single one of us and not just some. Thats why i made him americas lawyer, the peoples lawyer. That comes with a big portfolio, counterterrorism, civil rights, public corruption to White Collar Crime and alongside the incredible men and women of the Justice Department, men and women that i promise you he is proud of and will deeply miss, eric has done a superb job. On his watch, federal courts successfully prosecuted hundreds of terror cases proving that the worlds finest Justice System is fully capable of delivering justice for the worlds most wanted terrorists. He also rooted out corruption and fought violent crime. Under his watch a few years arc the fbi successfully carried out the largest mafia takedown in american history. He has worked closely with local state and Law Enforcement officers to make sure they have got the resources to get the job done and he has managed funds under the recovery act to make sure that when budgets took a hit, thousands of cops were able to stain at beat nationwide. Hes helped safeguard our markets from manipulation and consumers from financial fraud. Since 2009, the Justice Department has brought more than 60 cases against Financial Institutions and won some of the largest settlements in history for practicing related to the financial crisis. Recovering 85 billion. Much of it returned to ordinary americans who were badly hurt. Hes worked passionately to make sure our criminal Justice System remains beth in the world, he knows too many outdated policies, no matter how well intentioned, perpetuate a destructive cycle in too many communities, so, eric addressed unfaired sentencing disparities, reworked mandatory minimums and promoted alternatives to incarceration. Thanks to his efforts, since i took off, the overall crime rate and the overall incarceration rate have gone down by 10 . The first time they have declined together at the same time in more than 40 years. Erics proudest achievement might be reinrig is rating and restoring the core mission to what he calls the conscience of the building and thats the civil rights division. He has been relentless against attacks on the Voting Rights act, because no step, including our service members, should have to jump through hoops to exercise their most fundamental right, challenged discriminatory state immigration laws that not only risked harassment of citizens and Illegal Immigrants but harder for Law Enforcement to do its job. Under his much walk the department has brought a Record Number of prosecutions for Human Trafficking and for hate crimes. cause no one in america should be afraid to walk dont street because of the color of their skin, the love in their heart, the faith they practice or the disabilities that they live with. He has dramatically advanced the cause of justice for native americans, working closely with their communities and several years ago, he recommended that our government stop defending the defense of marriage act, a decision that was vindicated by the Supreme Court and opened the doer to federal recognition of samesex marriage and federal benefits for samesex couples. A pretty good track record. Erics father served in the army in world war ii as an immigrant only to be refused service at the lunch counters of the nation he defended. He and his wife raised their son to believe this countrys promise was real. And that son grew up to become attorney general of the United States. And thats something. And thats why eric worked so hard, not just in my administration, but for decades, to open up the promise to have this country to more strifg and dreaming kids like him to make sure that those words, life, liberty and the pursuit of happiness, are made real for all of us. Soon, eric, sharon and their kids will be freer to pursue efforts of their own, thanks to erics efforts so will more americans, regardless of race or religion, gender or creed, Sexual Orientation or disability, who will receive fair and equal treatment under the law. So, i just want to say thank you, eric. Thank you to the men and women of the Justice Department who work day in and out for the American People and couldnt be more grateful for what you have done, not just for me and the administration but for our country. [ applause ] attorney general eric hold letter step down, remain in office until a successor is found. Eamon javers, how long do you expect that to take . It is not going to be today, thats for sure, the white house telling us they are not going to name a successor, in fact, the president has not decide who had he is going to pick for successor. Earlier today, speculation about deval patrick, governor of massachusetts, his aides pouring cold water on that later in the day. Solicitor general don var rely, another name seems to be coming up close to the top of a short list here, but anybodys guess when that will happen and how long that process will take in terms of confirming the next head next u. S. Attorney general in the United States senate. That will be a battle as well. But boy, you can really tell the depth of personal feeling and the warmth that president obama feels for eric holder here. Clearly, its going to be a tough spot to fill for this administration, but also, somebody who has been involved in a lot of the most contentious pieces of the u. S. The u. S. Law enforcement, including the fast and furious program, which has attracted a lot of controversy, the jpmorgan settlement and other areas were this attorney general has served as sort of a heat shield in many fire in the president thats going to be a difficult role to replace as well, kelly. Plenty of speculation who might take his position and where he might be headed for now. Eamon javers out of washington, thank you so much this afternoon. We are looking for positives after todays massive selloff, get back to markets and the final reading october Second Quarter Gross Domestic Product tomorrow. Also an exclusive preview from jim grant of grants Interest Rates observer coming up. We are expecting within the next few minutes more closing bell. Stay tuned. Time and sales data. Splitsecond stats. Its so close to the options floor, youll bust your brainbox. All on thinkorswim, from td ameritrade. We do . I took the trash out. I know. And thank you so much for that. 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Welcome back, a deep solo for markets today, tomorrow could be brighter, Second Quarter gdp, show an adjustment. Joining me now in a cnbc exclusive to comment on that and other things going on, jim grant, founder and editor of grants Interest Rate observer. Great to see you. A strong gdp tomorrow, can that turn market around . I dont know. The gdp and i simply dont talk. Very large number. Billions of dollars. I hear its going to be 4 or 5 or something, we know it was so weak in the First Quarter of the year that the question just simply boils down to how strong is the recovery and what is the feds next move here . The fed is the most curious position. Is it in charge of so many things in our daily lives, kelly, it taken upon the duty of keeping us stable, the stock market going up and it simply is implausible it can do all these things. I think the question about inflation is one thats front and center in our markets. The central bankers are talking about if, if would you pardon the expression, the fiveyear, fiveyear inflation rate. So glad youre bringing this up. Thats how the central bank, certainly the European Central bank is preokayed by this number. That is inflation rate getting five years for now and extending five years. Kelly, say we were sitting here 100 years agoing, you and i living in germany, we are living large, First World War not yet begun, you ask me, because i am a knowledgeable financial observed, you ask me what is the fiveyear fiveyear inflation rate 1914, starting in 1 919, what might the inflation it has been next to nothing, right, germany, so i say, well, kelly, its looking awfully good. Kelly, it did not look awfully good in the event there was a sinkhole, hyper inflation, 1923, the inflation rate was like 29,000 in one month. So, i think that we all ought to central bankers ought to give a little bit more respect to the element of uncertainty. Understood. But heres whats happening in the market, as a background for people who arent following this along, but you should trial, the market every day in the same way economists or anybody asks tries to estimate what inflation is going to be going ahead. Lately, its estimate, thanks to a stronger dollar, falling commodity prices, global uncertainty has been falling precipitously and lowered by some measures than at any other time when the fed has been considering what to do. So, this conundrum, stronger growth, a better stock market and yet, and yet except, i would urge everyone not to become hysterical about deflation when we have rate of inflation 2 . In europe, the five year, five year thing, 1. 7 . Here, 2. 25. There is no deflation, there might be deflation, be assured, there might be aing great big collapse in our debt structure. That is possible. But for the time being, it seems to me that people banks are fanning this, they say unless we have a lot more inflation, which by the way, we cannot very well measure, unless we have more inflation, we will not be safe. Well, kelly, so old am i, remember when people say can we not please have stability and how about this . Whats wrong with no inflation . Let me boil this down for investment from the point of view of what people do, do you buy the dollar, think its going to keep going . So, in other words, okay, fine, things very uncertain, maybe the fed should sticks with the current plan, what does that mean then, where are the best places . I think so much investing has to do so much not with what the Central Banks are saying, gdp, one lo must look for bargains, they present themselves these days of levitated and arguably inflated asset levels. Grants were looking in places where few seem few others seemed to be looking for, looking in argentina. Theres going to be a change of regime and we think a constructive one the wicked witch leaves. Russia is for sale, too horrible to mention, stocks three and four and five times earnings, at least in my opinion, investing is principally a bottom up rather than a topdown thing, i think the risks come from the top down, central bank bankers, manipulating markets, fixing price and generally are confusing what value really s well, jim, thank you for the reminder. Welcome, kelly. Especially at this juncture, you have got a big Investment Conference coming up, a book coming out, please come back, theres a lot more still to discuss. Pleasure. Thank you, kelly. Jim grant from grant Interest Rate observer and despite todays selloff, investors are still betting on the stock market but maybe with some less longterm conviction. You can blame it all on exchangetraded funds. Up next, cnbc. Coms jeff cox is going to join us to explain that investors maybe on thing for shortterm bets on atfs rather than longterm mutual funds. We will be right back. Theres no shortage in this world. Who do you trust . Whose analysis is accurate . How do you make sense of it all . A simple, unbiased stock score consolidated from the opinions of independent analysts. Is that too much to ask . Nope. Equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. And its only on fidelity. Com. Open an account and find more of the expertise you need to be a better investor. Bulldog i cant wait to get to imattress discounters good and early for the tempurpedic bonus event. Ill have first pick from the huge selection of tempurpedic mattresses. Then, ill get to choose 300 in pillows, sheets, and other free gifts. On top of that, up to 48 months interestfree financing. Its a Beautiful Day for mattress discounters tempurpedic bonus event. Mmm, some alarm clock you turned out to be. Mattress discounters could mean less waiting for things like security backups and file downloads youd take that test, right . What are you waiting for . You could literally be done with the test by now. Now you could have done it twice. This is awkward. Go to comcastbusiness. Com checkyourspeed. If we cant offer faster speeds or save you money well give you 150. Comcast business built for business. A down day like today, one of the reasons some investors are moving their money out of longer term mutual funds and into thisth shorter term funds, etf. Jeff cox has been following this. Here at post nine, he explain what is going on. Kelly, look at numbers, 35 billion has gone into etfs over this in 2014, about 28 billion has come out of mutual funds. In and out of the market, one guy told me that investors have their fingers on the sell button. Its important because when you look at the year as a whole, we have had so many calls about a correction coming that we havent seen yet. I think this fun flow equation kind of helps explain at least a little bit of the mood on wall street. So when you get a day like today, there doesnt seem to be any news that really moved the market or should have moved the market this much that helps explain where investors are coming from. Rebecca, any reason investors shouldnt be doing this . High yield in the u. S. , 17 etfs alone, just for u. S. High yield. Theres everything from a spdr to a smallcap russian etf in spider. You need to do your Due Diligence and know the liquidity of the etf. When you want to hit the sell button, weve seen the premium to get out of an etf could be 1 or 2 . Its not as cheap as you think. So if youre doing it because you want to sell it cheaply and quickly, just buyer beware. I think etfs can play a great role, but you need to know what youre buying and what youll have to deal with. This concern ive heard over and over again that individuals dont understand the liquidity issue. So much volume going in and the door is going to be really tiny going out, depending what the underlying assets are. What do you do, jeff . I think the point is a great point about knowing what youre doing and knowing what youre buying, because when you look at where most of the traffic is going, its in the bigger etfs. Its in the spy. The big class of families. A lot of times its Hedge Fund Guys using this to hedge their portfolios which is important as well and i think theres probably some as far as the mutual fund goes, its transitioning from equity into bonds for people who are retirement age. They tend to be the people who use mutual funds more. But i think just as far as what the behavior is, you really want to be careful here. Volatility is going to pick up, 38 increase in the vix this year. Just as an investor, i think you really want to be nimble here and be careful of setting into any long position. Perhaps not a bad idea. Well see if the Mutual Fund Industry responds. Jeff cox, thank you very much. Theres more information on this with jeffs piece on cnbc. Com this moment. From Big Box Stores like target and home depot to regional chains like jimmy johns, it seems no retailer is safe from a Cyber Security attack. Theres new data suggesting that smaller businesses are much more vulnerable than the big guys. They just dont get as much attention. Were going to break down those numbers next and tell you how you can protect yourself in the future. Stay with us. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. It seems no retailer lately safe from a data breach, be it a major player like home depot or regional Sandwich Shop like jimmy johns. Which companies are at a higher risk for a Cyber Security attack . Kate rogers joins me now with those details. Those hack attacks at big names like home depot are the ones that often grab companies, but Small Companies shouldnt think that theyre in the clear. The latest example is jimmy john sandwich king confirming that credit and debit card data was potentially compromised at 216 stores. But in 2013, target attacks at businesses with 250 employees accounted for 30 of all hack attacks. This is up 6. 6 from 2013. The threat often originates through employee web browsing on computers that are connected to corporate accounts. This entryway makes it easier for hackers to drop malicious code on to Company Computers and if those computers are connected to point of sale machines, personal credit card information can be compromised. So mom and pops out there should invest in uptodate software patches, meet pci security standard councils merchant guidelines and keep browsing separate from those accounts. Just because youre a small business, it doesnt mean that your customers information is any less valuable. Back to you. Important information for everybody, and more closing bell right after this. Well be right back. Fast money starts right now. Im melissa lee. Our traders tonight, pete, ron, john, and guy, a sea of red on a week of five lows. And were covering all the angles of the selloff tonight. Ahead, why one prominent tech investor feels the most confident hes ever felt about apple. Plus, could the s p 500 soon follow suit . A look at what the charts are saying later on. Today marking the worst week for stocks since july. The dow ending the day down 1 along with the s p, but it was the nasdaq, of course, that felt the most pain. Nearly a 2 decline on the session. Pete, what happened today . The pain was in often and early. John could take about how much and how fast they hit some of them. But really technology and financials two of the areas that have been so strong, finally really took it on the chin today. Because of that, we started to see the entire market follow suit. All of the major indices following along as well. I looked at a few of the names that were getting sold off. It was very few that really stood out, because when i looked at the big cap tech names, i looked for the names that were really getting sold all. I saw names like microsoft, intel,hewlettpackard. I love the stories behind them. I think they can go higher, but if they go lower tomorrow, i definitely would reaching a critical point. Ive been saying i thought it would trade down to 108. I still think tough double tops in place. I think were going to test 108. I dont know what happens if and when we get there. The s p basically closed around support levels, i believe. But if we breach that 108 level, things get really interesting really quick. Then pete and john can talk about volunteervolatility. To petes point, i do think some of these big cap tech names are still in vogue and still in play. The stories still make sense. But again, the russell to me has been the key and will continue to be the key. Youre saying the vix is not nearly high enough to be panicked at this point. Not yet. I think it could happen tomorrow. As i said with kelly leading into our show tonight, i thought that if i was a bear and holding a short position, which i am not, i would want the market to rally in that final 15 minutes. I would like for them to be right and see that surge, that market on close lift the market by, like, 70 points for the dow jones industrials. Didnt happen. We finished at the low of the day. Thats not so good, in my opinion, for the bears. So i think we still get a flush, mel. I think it could come out of europe tomorrow. A lot of things going on. The high yield, we had no bid. Putin rumors and so forth, as well as subway threats. There were so many things. I mean, weve had to deal with things like malaysian jets being shot down and so forth, but we didnt have six things lined up one after the other on any other session this year. Speaking of bear, i turn to brian kelly. Weve got a lot of questions on twitter. No, no, no. You cant zip up the bear suit until the dip isnt bought. So we still have to see this go down. See if people buy it. Guys been all over this russell story, and whats happened is the Broader Market finally paying attention to what the russells paying attention to, which is a flattening yield curve since april, which is wider credit spreads. These are things that are unraveling a bit. I think it gets worse and it gets better. Whats interesting to me is in the morning, we had the apple selloff, we had the tech selloff. Then apple rallied, but the s p couldnt go anywhere. So it really broadened out as the day went on and i do think were going to test much lower levels here. When we get down to those levels, then a dry cleaner will see if they can dust off the bear suit and well take a look at it. I dont think its any coincidence that we also saw the dollar index hit a fouryear high. Were entering