Transcripts For CNBC Closing Bell 20240622

Throughout the hour. Other news, google, bright spot in todays tape. Not everybody is happy about the tech giants restructuring and changing the Holding Companys name to alphabet. We have someone who says these actions will come at the shareholders expense. He happens to be one of those shareholders and hell explain what hes talking about, coming up. As those shares still up 4 . A rare green spot in the session today. Yes. Cyber security meets insider trading. We have the details on charges against nine people allegedly involved in a multimillion dollar hacking scheme, coming up as well. That is huge. That is a huge case. We start first with the chinese currency being devalued by nearly 2 officially. The markets have done otherwise. That move from the peoples bank of china sparking todays global selloff of ek quities and commodities. Mark chandler, welcome to you. Walk us through the impact how will this cascade throughout the Global Financial system . A lot of uncertainty. We make a distinction personally about hypocrisy. China we make a distinction between declaretory policy and what they do. They told the u. S. Treasury theyll allow a Foreign Exchange market. It looks like its been a flat line, repegging it until last night. The 2 move is relatively small but the market will say there will be more devaluations coming and the trades offshore have continued to sell off after the shanghai market close today. How much is it down . Thats the thing we should really be watching and what the pboc will do with that market response . Right . Theyre monitoring this very carefully, arent they . I agree. I think thats the key here. Theres a lot of uncertainty. We have to see what happens, how the dust settles in the coming days, where the fix is. Now the chinese besides devaluing the currency, the chinese have changed the mechanism by which they fix the currency, give the reference rate by which the dollar could move 2 on either side of it. Right. They say theyll allow the way to close was coupled with the actions in overseas markets. In the overseas markets, the r b continued to sell off basically another 2 on top of what happened in shanghai. We are looking at 4 tonight. This will have the Ripple Effect through the capital markets. Lets talk about that for a second. The dow down more than 200 points today. Crude oil down 4 . Are all of these moves linked . And if so, is there more to come . This is a bit like playing a telephone game. A little bit of move in china, 2 move, on some day the euro moves 2 . Today the Canadian Dollar depreciated by 1. 5 . With china, will they begin a currency war . We dont think so but theres that talk out there. People are nervous because were in unchartered waters. Its really about what is the adversary, the challenger, china, going to do next . In the tightly controlled environment that theyve created for themselves, this is essentially their version of quantitative easing to devalue of currency like this. Its the idea is to jump start their economy, to help bring, you know, those cheaper exports to get the cheaper exports out there and spur their economy. Do you think its going to work . I dont think i agree that thats the goal. China imports semifinished goods. Chinese labor puts them together. Thats where the chinese value added is. Economists estimate that the value added being done in china is 25 to 30 . That means that you need to have much more than a 2 move to help chinese exports. The key to chinese exports, its about world demand. Chinese exports to the u. S. Are up, to japan are down. To europe are down. Sure, sure. Thats the problem. China needs stronger world growth. Is there any risk that we look back on this move by china as well as kicking off a currency krcrisis or some sort debt crisis like we saw in asia in the late 90s. Its always possible. The key now is its more of a fact of not what china is doing but how policymakers respond to it. One of the reasons the yen is still weak today, despite the fall in stocks and pullback in yields, people are afraid japan will respond with additional qe. Todays moves are very much exaggerated depending on what happens next. Mark chandler on this move in china, which is also whacking Commodity Prices, especially the energy patch. Courtney reagan is assessing the damage for us from the nymex. It was a big drop but easy to explain. Exactly what weve been talking about so far in the show when china made the surprise announcement to devalue its currency. They continue to march down all session. Actually breaking below 43 a barrel, though ultimately settling at 43. 08, down 4 and hitting fresh sixyear lows. Why was chinas announcement so bearish for oil prices . Well, that macs the dollar denominated crude oil more expensive and it also reignites the fears about lower demand out of china for crude oil. Thats two reasons. We had opec coming out and forecasting that nonmember countries would increase production through the rest of the year. The last thing we need right now is for oil prices if we want them to go up is hearing about more reasons to add to supply. That also helped to depress prices today. All in all, it was a session that only really went one direction for crude oil basically wiping out the gains that was made yesterday in the commodity. But it was not the only commodity that got crushed. If you take a look at copper, copper also closing down about 3 , hitting fresh sixyear lows swuls as well as aluminum. That has to do with the worry about chinese demand Going Forward if Economic Growth slows in that economy. Back to you guys. Courtney, thank you very much. Lets get to our closing bell exchange, try and make sense, joe duran from united financial, so is kelny polecari. Rick santelli as well. We see the gyrations today. Do you think the market senses a further devaluation and what do you think of the chinese move . I think Mark Chandler had it right when he underscored that if you really want to cut to the chase on this one, the issue with china, the motivation for whether they stop short selling or the latest move to depreciate their currency, its all about trying to find growth. You dont look for growth if you have growth. And i think the fixed income markets have been sensing this. Weve gone back and forth on exactly why the flattening yield curve may not be sending the message that many of us thought, at least through historical p perspectives on what it means for the central bank, the fed in this case. It could be having a probable with Global Growth. If you look at five, tens and 30s, theyre down basis points. Recalculation, it didnt matter if this is to liberalize china, i think their timing stands out. But in the end, no matter what the reason, were recalibrating and have less growth in the Global Economy. Those factors will bring volatility and many question ace to where the growth will come from and how far different Central Banks will go. No surprise, Commodity Currencies in the end, as mark pointed out, are under big pressure today. Thats exactly it, kenny. How likely is the Federal Reserve to raise rates at its next meeting . I think once again the fed is not raising rates until november, december. I think this underscores that. I think the chinese move last night, theyve already done some of the work for us in terms of the markets skittishness. We took what we gained back out of the market. Look, weve had every reason and every opportunity between last week and so far this week for this market to crack and crash. It does not want to do it. It finds natural bids on the s p. I think the a little bit of an overreaction. I think the market will continue to churn here through the rest of the summer and start to build a base to move higher as we move in. I dont think the feds raising rates until september. Joe duran, do you agree . Is this an overreaction or would you be looking to pick up bargains with plenty of stocks that have been beaten down quite a bit . So i dont think its another reaction. The market for the last several months is driven by one of the four cs, currency, china, commodities and credit rates. Youve had three of those getting hit today. As long as commodities and the currency and the whats happening in china continue unresolved, its going to be very choppy. We have valuations that are reasonable but not wonderful. That suggests high volatility and you have a fed thats going to be less accommodative. I agree with your other guest, its going to take longer than some would expect. Youll still have less liquidity at the system at some point. Yes. That increases volatility. Its why weve had a lovely run for the last four years. Look where we are over the last five months, weve been stuck in a tight trend. The s p goes right across the chart like this. Theres not a lot of exterior volume pit. It its all been this band. The market has had every opportunity to give it all back. Were still in that trading ring. Let me add to that before you respond. Theres no good alternative. Look at whats happening today, not just in everything weve discussed related to china, the bond yields falling, look at apple, joe, down 5 which would in a sense suggest to you the market thinks bother that growth isnt there and also theres not much policymakers can do for a company like apple who might be reliant on that growth in china. Are you changing your Investment Strategies around this as a result, seeing opportunities . Well, if youre a trader youre going to react every day to things. Thats not where we live. We live taking care of peoples serious wealth. You have to look and say where are my alternatives . The u. S. Is clearly where youd like to be. We have come from four years of exceptionally low volatility. What you will see until theres a better alternative, i dont see any more attractive than large cap, high yielding u. S. Stocks which every day look more attractive as rates continue to drop. Theres not a lot of good alternatives. That is true looking forward everywhere right now. As you see the currency wars that will probably heat up, maybe not wars, but alternatives are less interesting than in a good highyielding u. S. Company. Before we go, rick, recalculation is your key word for the markets. Do you think the fed will have to recalibrate its thinking on this in light of what chinas doing . Listen, i still think theyre not going to raise rates either in september or december. I think they need to and i think theyre playing with fire, because ultimately, the trade issues that china has sparked and how it will affect global maneuvers of all capital and goods might be a recession. Might be 12 to 16 months, might be closer. They could be behind the eight ball if things slow more dramatically than we expect. I agree completely. If we dont make the first move with the strongest economy, no one else is going to do it. We have to be the first one to show the strength. They need to stop teasing. We go back and forth and you get confusion. As we said, this feels like an important day here guys. Well see what happens. See you later. Thank you. About 45 minutes left to go in this session with the dow down 210 points or just about, only a couple of green spots in the whole index today. The s p 500 is down 21 and the nasdaq hit hard as well, down another 1. 4 . I will be interested to see how they do in the last hour, especially the last half hour. More on the china surprise, currency devaluation and what it could mean tonight when the central bank has to set the currency yet again. The Hong Kong Bureau chief is here in the united states. Ken brown will be here to size it up for us, coming up. As crude oil is getting crushed, dominic chu will highlight the impact on a couple of specific sectors. Stay with us. Closing bell is back in two. So youre a Small Business expert from at t . Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep them all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberyy apple scones smell about done. Ahh, youre good. I like to bake. With at t get up to 400 dollars in total savings on tools to manage your business. 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You just had the key story here. The dow has been down more than 200 points all day. Its tech and materials all week. Ill show you why. This is where hewlettpackard trades and corning. Hewlettpackard has 11 revenues in china. Volume is on the heavy side, heading towards 7 million, 8 million shares. Same situation with corning. They have about 20 of their revenues in china. Thats down about 3 . Again, the volume is veering towards the heavy side. Even a big company, come over here, ibm which is right here. They get 11 of their revenues in china. Volume here, i would say its on the moderate side. Its hard to move ibm on a daily basis. Its down fractionally. Where you see heavy volume is anything in the material names. Alcoa is a real good example. Down 6 , trades right here, 33 million shares changing hands. Well probably be doing twice normal volume in that. This has been huge throughout the day. Freeport mcmoran, 40 million shares, thats twice the volume youll normally see. Gold and copper and oil and gas this year, been a very ugly year. They did announce a secondary last night which would essentially dilute the shares about 8 . That probably means the ipo, they were talking about an oil and gas ipo spinning out that whole division, probably will be tough to get done this year. We come back in the next hour, ill show you some other unusual winners today on heavy volume. There are a few of them that are doing quite well on the strange situation with the commodities were seeing today. Guys, back to you. Do you see, bob, evidence, you just mentioned freeportmcmoran. They are getting whacked on all fronts and yet doing a secondary. In the free of freeportmcmoran, they need liquidity to keep things going at this point. They have a modest dividend. The hope was they were going to have an ipo of their oil and gas business. They announced it back in june. The idea this was going to happen in the fall. Its very unlikely now that theyre going to actually go have an ipo and a secondary at the same time. Both were trying to raise capital. This kind of telegraphs the idea that theyre having some trouble spinning off the company. But youre right, cash flow is going to become a major issue for a lot of these companies if we continue to see these Commodity Prices at these levels. Macro question for you. I dont know if you heard kennys point that with all the head winds and things that come our way, on an important day like today with the move by china, we still are stuck in the trading range for the stock markets major averages. Theyre not taking it one way or the other these days. Its been frustrating. The s p has been essentially an 80point trading range, 2050 to 2130. Its been sawtooth through the whole year. If you think about it, is that that bad given what we dont know about china and its still uncertain here . I think sawtooth pattern up and down is probably what we can expect for the rest of the year. Its frustrating but i dont find it surprising. All right, bob, thank you. Okay. See you later. Well take a break. 40 minutes left in the trading session with the dow still down about 215 points and the s p is down almost 22 right now. Kelly . And will goods made in china automatically become cheaper . The wall street Hong Kong Bureau chief will weigh in on that and how it will affect your investments, coming up. Google, that reorganization, theyre reorganizing the operations, renaming Holding Company to alphabet. We have a google shareholder who says this is an example of rich people taking on pet projects at the shareholders expense. He shares his unhappiness with that move, coming up. Welcome back. An extremely difficult session for the maeshg trkets here on t tuesday. We are keeping an eye on American Airlines which is outperforming today in the selloff. Might have something to do with crude. The Worlds Largest airline posting a 4. 8 rise in july traffic and is mentioned as those Oil Prices Continue to plunge. The airlines still are soaring. One of the few bright spots. Another bright spot, google shares bucking todays down trend on the heels of its radical operations restructuring. Jon fortt is here to explain the changes. The new google inc. Ceo is sendar pichai. Hes been with google since 2004. He first ran chrome, ran on to move google apps and some other things around maps, continuing things in the browser, moved on to run android and now hes got control of essentially the entire company, including not just the internet stuff but also the nexus products, the hardware. The things that arent included are google capital, ventures, google x. This raises lots of questions about google. Lots of investors taking this to mean, this is great, well get more insight into how google inc. Itself is run. If you have larry paige and sergei brim and eric schmidt and david drummond, and the father of the Google Business model thats done so well now running alphabet, are they going to spend less money or perhaps are they going to spend more . Well have to wait and see. Investors excited about it. Im glad you put it that way. Stay right there. Google shares up 4. 5 . We talk to a google shareholder, he joins us now. Good to see you. Do you agree with john suggested that this may ultimately end up costing shareholders a lot of money . Theyre not Berkshire Hathaway here. What theyve done is stripped out this great business and put all the crappy ones over on the left here and called it alphabet. I dont know if theyre branding people had any say in this. Alphabet is a goof ball name. Nevertheless, why not focus on google and youtube . They did promote somebody who i think will do a great job. Thats great. All the top executives just want to play games with all their moon shots, take the companys profit and plow it into moneylosing businesses. Im not happy about that. Im curious, have you been critical of them before this . They have been getting into a number of farflung enterprises over the years. On your show i was critical of google glass win thought it was a total waste of money. It failed. Ive been critical of selfdriving cars that crash more than when people drive them. I dont get it. I understand its more fun. Now, i do understand that. I heard Richard Brandon speak and hes talking about galactic space vehicles. Its not about that. Its about making shareholders money. Thats why Warren Buffett is so successful as he understands cash flow businesses and hes buying purchase in cash cards, which is a cash flow business. This could work. Ross, i think youre right to point out the differences between a Berkshire Hathaway. Its not like theyre putting google to the side and investing in a bunch of businesses that everybody understands. I think its interesting. Google stock hops on earnings due to cost control. Investors are interpreting this as being a sign of discipline. Maybe this is a good move but maybe its not a good move for the short term. They seem to be focused on ininvesting in the future. Maybe google kind of owns the car industry, the operating system for the car Going Forward because of their investments there. It seems possible to me at least, we dont know exactly what this means, that google buys and spends a bunch of money and the short and medium term on things that dont did the provide an immediate return. When i read larry pages blog post, his letter, that suggestion seems to be there. Yes. Thats what im not happy about. Heres what would make me happy. They have alphabet. I have three letters, t, they need to buy twitter, y, they need to buy yelp and z, they could guy zhenga. My goodness. Why not buy electronic arts. There you go. You have an e. Zhenga could be bought for 2 billion in cash. A lot of analysts are happy with this move. What are they saying that ross isnt right now . Analysts are happy about the possibility of getting more granularity in googles core business. I think when you read the fine print on this filing, you see google will not break out the specific metrics around youtube, for example. Theyre not going to report that. Theyre not going to go into alphabet, and other line items and report those out separately. Sure, youll get maybe a better operating profit picture on google ink itself but beyond that, its not clear what youre going to get. Its not clear how google will report things on costs, how theyre making their own service. How will they allocate that to a youtube, to a Google Search engine verse is to some of the other things theyre spending money on . Yes, you might get some more insight into googles financials but i dont think youll get a complete opening of the kimono. I dont own we own some yelp because we have clients that work there. We dont own any twitter anymore. We were forced to sell it because its going down like crazy. Xanga . Xanga we dont own either. I think twitter makes so much sense for google. They have to be in social media. They should be doing acquisitions. All right. Very good. Thanks. Always good to see you. Thanks, john. Appreciate your reading like that. Time for a cnbc news update with sue herera. Rand paul meeting with supporters there. Now earlier in the day at a political event at saint anthem college, he criticized frontrunner donald trump saying he had no vision. Hillary clinton also in New Hampshire continuing to tell her new plan to make Public College tuition debt free. She accused the gop candidate for failing to take on that issue last week. The painting entitled head of a young woman is valued at 26 million and was seized by French Police from a yacht in corsica last month. The painting is considered a National Treasure in spain that can never be exported or leave the country. The fda warning the drugmaker that paid Kim Kardashians Instagram Post violates federal law. She failed to communicate any risk information associated with the medicine. The company says it will address any issues. Youre up to date. Thats the cnbc news update. Im scratching my head trying to imagine kim kardashian. You know that long list if you take this medication, bill, you might experience that. Is that what the fda is asking for . Thats what they would want. Read that very quickly. Some disclosure or she could put it down at the bottom of the Facebook Page or whatever it is. Because its an endorsement and theres no talk of drug interaction, its a violation of federal law. The rules catch up to instagram. Thank you. They do. Thank you, sue. Sure. See you later, guys. Less than half an hour to go. Heres where it gets interesting. The dow is down 220 points, bond yields are falling, oil is declining. The dollar is stronger. All the reacting to the surprise move by china to let currency float, in this case float lower overnight. When we come back, a top trader will tell us what hes watching during this most important half hour of the trading day. Stay tuned. We have the Hong Kong Bureau chief and the wall street journal with his take on this deval. Find out what he thinks what happens in china tonight will be key. I needed work done around my house at a fair price. F sure can. So i could get a faulty light switch fixed . Yup or make a backyard pizza oven . Oh yeah. I can almost taste it now. Tastes like victory. And pepperoni. Welcome back. One of the stocks weve been following, apple down sharply. There was a suspicion during the recent selloff that maybe apples decline had something to do with a slowdown in china. China is one of the tech giants biggest markets. A weaker chinese currency hurts its revenue, apples, when it converts to u. S. Dollars that stock is down more than 5 today, kelly. Quite a hit. Its astonishing, really. Im on the floor with Gordon Charles of rosenblatt securities. Were watching to see whether they hold them or start to continue the trend or reverse them. Right now it looks like they may hold or reverse a little bit. Weve been to the downside to the opening of the session. The way were looking at it here, it retraced off of yesterdays gain, a little bit past that. When you start to get to the technical lines like that, theres a little bit of wiggle room on that. The question is whats the trend going to be for the whole week . Certainly the news was discouraging but right now were seeing buyers coming in here. Were being patient. We see apple down sharply, commodities in freeport, that whole complex getting hit again. Where are people bidding. There are a couple sectors. All the sectors have been rotational. Weve seen different reaction throughout the day, throughout the last couple weeks. You see google. Wait until you see some of the other stocks. Thats the way the market has been. You have high Growth Stocks that have high multiples and thats one of the reasons weve been fluctuating with these multiples. The thing is whats going to happen into the bell. Okay. What were seeing is the sell or flow that been permeating on the floor today is being answered by buy interest and the patient buyers seem to be enjoying that theyre getting the stocks at their prices. Well watch and see if that patience continues. Thanks for joining us. Appreciate it, bill. Thats gordon charlop. The latest effort to halt the economic slowdown in china, perhaps to prop up its markets. Its a move that spooked investors around the world. You were waiting to see what could happen to the currency tonight going into tomorrow. Ken brown is asia finance editor and Hong Kong Bureau chief for the wall street journal. For the last few weeks youve been in the united states. You must be going crazy, missing all the action. If you stay up all night in new york, you can catch all the action. Thats what ive been doing. Your contention is that now we need to see what happens tonight. What do you think will happen . Right. The Chinese Central Bank came out today and said were going to let the market tell us what to do with the currency. Until now, the government, the central bank set the currency peg every day regardless of what the market said. They put out a new statement and the market said, fine, were going to go down further. Even more. Exactly. If the central bank is good to its word tonight, expect another knockdown of the currency. Now, defensive bank also doesnt want to destabilize things. You cant imagine there will be a huge selloff. Its the exact thing to watch. 9 30 tonight new york time is when youll get the peg. Theres been a lot of speculation over what this is really about. Theyve taken steps for year to neutralize it. Respond to what they perceive as a global currency war or just try desperately to stem some of the weakness in its own economy . What are people saying about those factors here . Theyve done a lot to try the economy boosted, theyve cut Interest Rates, theyve done a bunch of stuff. Theyve had a bad stock market selloff. They cant get it doing. The last thing you do is devalue the currency. The currency has been going up against everybody else in the world except for the dollar. Theyve been suffering because of that. When you have a weak economy and appreciating currency, thats the logical thing to do. True. The question then becomes, do you think this works . I mean, theres sort of an air of desperation to all of this, isnt there . Weve seen, whats been interesting about china, were seen this desperation the past few weeks. All the moves they made to prop up the stock market were very dramatic. It showed huge concern among the Chinese Government. This is an air of desperation. When youve cut Interest Rates a bunch and nothings worked, you do this. They are undergoing a huge economic transformation. Theyre the second biggest economy in the world now. This is a hard effort for that. How much more pressure does this put on trading partners, some of the big export nations, japan, the european region . How might this further cascade . You saw the currencies in asia, the yen, the yuan, a few other currencies go down overnight. Thats logical. You could see more of a currency war then. Everyone the Global Economy is not that strong. It sounds like youre getting a lot of growth and theres a bigger pie that everyone can go after. The pie is the same size. Everyone is trying to get a piece of it. Its a tough game out there. Let you get a cat nap before the next session begins. 15 minutes to go in the session here. Market not taking it well, the surprise overnight. The dow is down 200 points. We have declines of 1 across the board although we are a little bit off the lows. Weve seen some insider trading. Weve seen hacking. Today the government busting a group thats been doing both. Well get you that story next. You are watching cnbc, first in business worldwide. Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place that lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim . For all the confidence you need. Td ameritrade. You got this. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i looked at my options. 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We love to travel and theres so much more to see. So we found a plan that can travel with us. Anywhere in the country. [ male announcer ] join the millions of people who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp, an Organization Serving the needs of people 50 and over for generations. Remember, all Medicare Supplement insurance plans help cover what medicare doesnt pay. And could save you in outofpocket medical costs. Call now to request your free decision guide. And learn more about the kinds of plans that will be here for you now and down the road. I have a lifetime of experience. So i know how important that is. Any other day this might be our top story. We reported about hacking and insider trading. Maybe it was inevitable, the two skills have paired up this time. It included panera, verisign and caterpillar. It was called unprecedented in itself in profits made. A global group of 15 funds and 17 hackers and traders from ukraine, russia, pennsylvania and the state of georgia netted 100 million in illegal profits. Regulators say two ukrainian hackers were the masterminds behind the scheme, infiltrating three Wire Services through malware. The hackers shared this with traders who bought or sold stock and options in various companies. Over five years, the group traded on 800 releases, most of which concerned Quarterly Earnings or Forward Guidance for Companies Including panera bread and Edward Life Sciences as well as verisign. This is huger with were talking 100 million in profits. Wheres the perp walk . Why are they announcing this now if they cant bring forward the perpetrators to shame them like they normally do in a case like this . Some of them remained at large. Four were arrested. Why they decided not to do a perp walk, thats under the regulators, their decision to do so. The case is ongoing. Again, they are very to some extent excited about the ability to bring all these various groups together and shut down this trading system. You know excuse me, this crime system basically one that was within the Wire Services for a number of years. These criminals had patience and persistence in trying to get this information. Crazy. See if its the first of many. Thank you, mary. About 13 minutes to go into the close here. Not budging. Trying to crawl by. Its not budging. Down is down 1. 2 . Nasdaq down 1. 3. Man, what a 24 hours its been. Todays dramatic selloff sparking concern with Portfolio Managers like mart martiak who says the ripples from china boosts the demand for a safe haven like u. S. Government debt. Well get his analysis, next. Youre watching cnbc, first in business worldwide. Were not rich, but we want to be able to enjoy our retirement. 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When you call 811, i come out to your house and i mark out our gas lines and our electric lines to make sure that you dont hit them when youre digging. 811 is a free service. Im passionate about it because every time i go on the street i think about my own kids. Theyre the reason that i want to protect our community and our environment, and if me driving a that truck means that somebody gets to go home safer, then ill drive it every day of the week. Together, were building a better california. Welcome back. Selloff in equities, where did the money go in many cases to the rus treasury market, the yield on that tenyear. For a time was at 2. 11. Were at 2. 13 now. As Rick Santelli pointed out, its a uniform curve in yields. Mark martiak, welcome to you. Traditionally people would say this reflects nervousness, weak economy, the fed will maybe push off its rate hike. What do you think all of this action means and how are you plying it . Im advising my clients to stay focused, patient, well get our rewards from the market. I believe this is a price fluctuation. When we look at the technicals, we saw this great bounce yesterday and saw this surprising news which the market doesnt like, obviously the Chinese Government gave new meaning to the phrase bull in a china shop by making it a bear in the china shop. The bear felt like geno smith of the jets, getting sucker punched by one of his teammates tonight. I think were okay. Were in good shape. The technicals dont show evidence that well continue in a down trend from tomorrow forward. You covered all of the news today. Are you running for the hills the way others are, going to the treasuries . Is that where youre putting money to work right now . Thank you, bill, for that question. Not running for the hills but we have diversified enough, looking at the risk in our clients portfolios and our clients tolerance for risk. Weve diversified into fixed income. Treasuries, unconstrained bond funds and municipals. We need that diversification now. You see that when a day like this happens and you get this surprising news. I yields are rising, prices are down. You look in chicago, the muni market, unconstrained bond funds, you dont necessarily think of these as the obvious safe place. It is a good play, kelly, simply because Portfolio Managers can go anywhere at any time. And that includes sovereign debt as well. So they could have treasuries, sovereign debt, munis, mornl mortgagebacked securities, all diversified in a nice portfolio. For the muni portfolios you want tax exempt income on a federal, state and local level if appropriate. Im saying yields coming down, prices going up thats what you see on a day like this. I see fixed income as a critical part of ones portfolio to get that stability. Mark, thank you. Good luck to your daughter, shes off to cornell in a couple weeks. A fine institution in upstate. Absolutely. Coming up next. 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Price of oil, big move there today. Down another 4 . Now down 3. 3 . Were below 44. It did get to 42. 90 at one point today. It took stocks out as it does in europe this morning. The dow now down 207 points, was down 263 at the low of the day. And as weve already shown you as well, the treasury markets saw yields go lower, especially on the long end. The tenyear now at 2. 14 after hitting a low of the day at 2. 11. Bob pisani, our friend ken brown of the wall street journal pointed out, we watch tonight to see if they repeg their currency even at a lower level. Yes. This is a little bit strange, if you watched the action in the last few days. We were up on hope that there might be stimulus. Today were down on concerns of the china slowdown and the effect it had on the commodity and seasonally whats happened is weve gone nowhere. We were down 240 on the dow excuse me, up 240, today were down, essentially the same amount. Its all sort of become awash at this point. Right. The funny thing about this, people put the vix. The vix doesnt move. Yesterday we had a complacent rally, today we had a complacent decline. Anybody that was long volatility might take a 13 gain. 13 on the vix is not much of a move. We didnt really move down much yesterday and didnt really move up that much today. My point is, you have a 250point move from the dow on a daily basis, almost no move at all in the volatility. What this implies is traders are not rushing out to buy calls or buy puts on any of these days. They dont seem to be particularly worried. One of the reasons is the s p 500 doesnt move that much. Were in an 880point range all year, all we do is go up and down, up and down, the sawtooth pattern weve seen the last two days. It tends to breed this mindnumbing deer in the headlights trading where people arent rushing to do anything in particular right now. All right, bob, thank you. Two interesting days to begin the trading week. What happens tomorrow . Well get you set up to are that right now on the second hour of the closing bell with kelly evans and company. See you tomorrow, kelly. Thank you, bill. Welcome to the closing bell, everybody. Im kelly evans. Not a pretty session on wall street. Lets take a look at how were closing, the major averages down 1 as we have big drops in bond yields and crude oil. The dow down about 210 points on the settle here as they close the s p, the nasdaq, the dow all giving up about 1 . Theres crude as mentioned, down to the 43 mark. And energy actually holding in there relatively speaking. Still, a difficult one for this sector, this market to digest. Names like freeport down 13 today and meanwhile, how about an apple, down 5 . That goes back to concerns about the strength of chinas economy. Well get into all of that in just a moment. Joining todays panel is elan morris and Kayla Tausche. Kayla by the way, just back from china. Brian kelly and peter costa from empire executions will join us in a moment. Brian, let me start with you. This morning you were saying you cant trust that the chinese currency will go higher. Overnight they do the opposite thing. Its moving the other way. What has now . It continues to move the other way. If we look at the offshore markets, hong kong, the forwards, theyre suggesting that well get more weakness here and that would make sense. The exports are falling. They are having an economic slowdown. It wouldnt make sense if the market sets the rate for the yuan to go lower. Elan, bring this home for us. What does it mean for the u. S. . What does this tell us about the Global Economy . I think the fed has changed. Theyre no looking for reasons to delay a rate hike. They talked about this being the year. They also emphasized the word gradual. Markets take that to mean maybe every other meeting. Theres a possibility theyll move in september and use the timing of the second rate hike as their response to any unsettled in the markets or volatility in china or here at home. It goes back to how weak chinas economy might be. What do you glean . You saw the auto sales number come in weaker than expected for july. You also saw manufacturing slow down throughout the summer. There was turbulence in the stock market. We were waiting to see how that played out. When we think of things like currency, often times theyre talked about in hypotheticals or intangibles. Yes, it would be better to have a weaker yuan to benefit chinas exports. When i was in clinz last weehini talked with someone who worked for a company, that company went bankrupt because of the appreciating yuan. It just wasnt favorable to them to export anymore. That is why he learned english, became our tour guide. There are real people and companies affected by this. China, not surprisingly, decided to take action. Brian, explain to everybody why it matters so much. The chinese currency wasnt going up that much. Now the 2 move is royaling the market. Its a relative move, right . This is one of the largest moves the currency has made in a long time, over 20 years, i believe. Secondarily, a 2 move in a currency is like a 5 to 10 move in a stock market. So you have that dynamic going on. Most importantly is the deflationary shock throughout the world. Were seeing lower copper prices throughout the world. Thats a deflationary shock that we dont know the unintended consequences and ramifications of it. Peter costa, what do you make of forget necessarily being able to pin down why or whats going on here. What do you think just about the price action and the trading action alone here . I think the first thing, it was totally unexpected. You know, you have to look at the bigger picture. The bigger picture, with the lower yuan, it becomes the more aggressive exporter of products to the u. S. The dollar goes up. That affects the big cap stocks. Theres a lot of ramifications. Its not a simple, Straight Line thing. Its like an octopus, a lot of different tentacle. Understood. Lets bring in sara eisen. More on chinas move to devalue its currency and the further impact that will have on the dollar . We first need to understand, kelly, why china did this now. This is a major policy shift for a country that has been letting its currency appreciate for the last few years. So what happened . It weakened the band that it lets the currency trade in and the currency dropped to a level that we havent seen in years by the most in a number of years. The peoples bank of china, the central bank said it was reacting to market forces, including a stronger u. S. Dollar that was dictating that the chinese currency should be weaker and here is one problem to the chinese currencys credit and to the chinese Central Banks credit. The only one that is going higher is the yellow line, which is the chinese currency over the last two years. All of its trading partners and competitors like japan, south korea, brazil, mexico, all of their currencies have gone down. Theyve become more competitive and china has lost a competitive edge. Exports, we saw just reported dropped by 8 last month. Letting the currency weaken now is a way to fight the weakness and makes china more competitive. Heres the problem, though. Theres all sorts of fears about new currency work. What are other emerging market Central Banks and other trading partner Central Banks beginning to do in response . Are they going to have another round of competitive devaluations and weaken their currencies . All of that can feel competitive tensions and trade tensions, something that could harm growth. Theres also the political fallout, that is were a month ahead of a diplomatic visit by president xi to president obama. We know that president Obamas Administration has been tough on china and china has reacted in letting its currency appreciate. This could be seen as a setback. Fair enough. Kayla . I was going to ask sara a question. In the past from 2006 to 2008, we saw former treasury secretary hank paulson working in strategic and economic dialogues with china and asking them to let the currency appreciate to show, to prove that those dialogues were working. This is a pretty stark change of events. You mention president xis visit this spring. We have the tpp, the transpacific partnership. Thats a great point. Weve seen actually both sides of the aisle, something that both parties can agree on is that china should play fairly and not let its currency be unfairly manipulated or unfairly controlled. Thats why it will be interesting to see a lot of the president ial candidates reaction to a type of move like this. Are we going to start to hear more protectionist talk from candidates . Were not going to let china do this. For the administration on its part, the last time we heard the president talk about this was three months ago at the nike headquarters in portland when he was making his case for the trade talks. They do not as much. We have been tough on them and theyve let their currency appreciate. Thats why the treasury, the spokesman said, they are going to monitor this type of situation and see just how much and how far china goes, let is its currency weaken. I think the bottom line here guys, beyond the geopolitical fallout, is there something more worrisome happening in chinas economy or more scary that theyd go back for market reform to try to stop their economy from hurting . Ill put the question to you and add to the political point here, Dave Rosenburg tweeted, the biggest winner could turn out to be donald trump. Potentially, i suppose. Thats a hornets nest id rather not go into i would say, this actually is a market reform. This isnt necessarily going back on market reform. This makes it more free floating. Theyll set the rate every day by what the market says the rate is going to be. From what we know, being china, it will be monitored closely. This is a market reform. Thats number one. Number two, you do have to be concerned that theres something deeper going on. Weve seen china put in almost a trillion dollars put into the bank. Theyve lost 3 trillion worth of wealth in the stock market. Their real estate bubbles popped. The export bubble has popped. There is something going on there. We just dont know how big. Im in the camp that i think its a hard landing coming down the pike. Its easier, im sure, if for them to free float if they assume its going lower. We have breaking news on general electric. It announced its selling 8. 5 billion of health care resu related loans to capital one and selling 600 million worth of Real Estate Equity investments linked to its Health Care Financial Services unit to another buyer. Keep in mind, of course, ge has said over this year it will sell 100 billion worth of assets of ge capital. As it looks to wind down that unit and remove that systemically important designation that the government put on the finance arm. Ge capital saying its selling 8. 5 billion of health care loans to capital one. Back to you, kelly. Just to close out this decision, ylan, my question to you is simply this. What would it take for this issue to really keep u. S. Federal reserve from raising rates next month . I think youd have to see that deflationary pressure. The fed is comfortable with where its at right now. We saw that get any lower, i think that would be a concern. I want to bring back donald trump. Hes been out front on this issue. Today he was saying that he thought the devaluation would be devastating for the u. S. I want to point out that senator Chuck Schumer has put out a statement saying he is worried about this statement. Great point. Well just begin to see the effects of this across the board. Well leave it there for the time being, everybody. Thank you so much. Sara, brian, peter costa as well. Be sure to stick around and catch more, brian and kelly, coming up on fast money at 5 00 here. You wont want to miss it. Chinese auto sales plunging to a 17month low despite deep discounts. Could it even get worse for gm, ford and other automakers after chinas currency devaluation . Phil lebeau joins us with that angle, next. Plus, m a. Youre watching cnbc, first in business worldwide. While every business is unique, everyone is looking for ways to cut expenses. And thats where pg es Online Business Energy Checkup tool can really help. You can use it to track your Actual Energy use. Find rebates that make equipment upgrades more affordable. Even develop a Customized Energy plan for your company. Think of it as a way to take more control over your operating costs. And yet another Energy Saving opportunity from pg e. Find new ways to save energy and money with pg es Business Energy checkup. Well, easy come, easy go. Look at the red on that screen. Thats the s p 500 heat map for the session today. It was 82 decliners versus advancers. Todays selloff erasing yesterdays gains. We go to bob pisani. You want to see how screwy things were, you saw it in the transports today. Let me show you how strange things were. This is csx down 3 , Kansas City Southern down 1. 5 . This is heavy volume for csx. The problem was, commodities being way down, concerns about slower Global Growth that might ship slower numbers of things. Thats what affected the railroads. On the other hand, lets pull over the panel right next to us. Look at the airlines. The airlines up, delta up 2 , ual up 1. 25 . Theyre up on the idea lower oil, lower jet fuel costs will help them. This is how screwy things were on the day. Some things moving up, some things moving down. Refiners like valero and tosoro were up. Oil is down 4 but gasoline was flat. That spread between the two means that the people who do refining are going to be making more money. So today the only thing you saw green anywhere consistently was most of the big refining stocks. So right now, kelly, weve got the dow down 7 out of the last 8 trading days. Were not seeing volatility. Were seeing individual stocks move but the vix overall still sitting around 13 where it was eight or nine sessions ago when this current slide began. A little bit of complacency on the upside yesterday. Complacency on the down side. In between, you have significant damage. Back to you. Thats a point about vix, bob. Thank you very much for now. Take a look, everybody, at shares of gm, they were also down more than 3 . China being the companys largest market. Gm issuing a statement regarding the impact from the devaluation of chinas currency saying, quote, we believe our exposure is limit and manageable and do not expect the deval will have a Material Impact on the companys financial performance. Well, lets our phil lebeau for more. Joining us from the indiana plant, exporting mercedes over to china. What do you make of this, phil . Its interesting for the automakers, especially when you look at china. July sales down 6. 6 . It is the third time in the last four months that weve seen sales drop in china and yeartodate by the way, theyre uhl only fractionally. A lot of people are looking at china and saying will the demand continue that weve seen in the past . One type of vehicle thats still popular there and is still in demand, the suv. Mercedes has a big business over there. Its sales globally of suvs up 17 this year. And when you look at the china demand for suvs up 47 for all automakers this year, that demand along with the ability to, perhaps, free up capacity at its plants down in alabama is why mercedes has contracted with a. M. General here in south benned to build the r class on the old hummer line. It will be sold only in china. About 10,000 r class vehicles built here will be shipped over to china. It is, again, freeing up production in alabama. This afternoon we had a chance to talk with a mercedes executive and ask him if hes concerned about a big slowdown in auto demand in china . Heres what he had to say. Were up about 20 , 24 so far. Right now were confident that things will continue and well just have to continue to monitor the situation. We think the demand will eventually pick up a little bit and it will finish the year up 5 or 6 . When you look at these stocks, kelly, theres no doubt that everybody in the auto industry, especially those with big exposure in china, theyre worried right now because weve not seen a slowdown like this, really in a long, long time in china. Its been go, go for years. Ylan, at the same time, the u. S. Market when it comes to autos, its been red hot. Its the complete opposite of what a lot of executives thought a couple years ago. Thats my question to phil, actually was, it doesnt make sense to me were making cars here in a country thats had an insatiable demand for cars to send to china where car sales are flattening out and dropping. Whats behind that . I mean, why cant we sell it to our own customers . Keep in mind, the reason theyre building the r class here, guys, the reason theyre building the r class in south bend and shipping to china is because the r class used to be built at the mercedes plan the in alabama. They are virtually out of capacity down there. What little room they have is to build more suvs to be sold here in north america. They are trying to meet the demand of this market. One way of doing that is to contract out to the a. M. General folks up here. Kayla . Theres the question of whether the sheer volume of subsidies for consumers in china to drive electric cars or have nontraditional cars is going to move auto sales in a more secular direction. Do you think this is the beginning of a longer term trend . Or do you think this is more of just a blip . Hard to tell. I hate to take that middle of the road answer and not give you a definitive answer. Ive heard arguments from both sides with people saying this is the beginning of a trend and people saying we think were going to end this year up about 5 or 6 . Auto sales will continue going up to 30 million annually by 2020 or 2021. One thing to keep in mind, there has been so much capacity put into china that at this point, its a little bit like a standoff with all the automakers looking around saying you take buns a bounce and capacity. At some point theres too much capacity. Thats a concern ive heard from almost everybody in the industry. Sounds like the oil business, phil. Thank you so much. Appreciate it. Good to see you, phil lebeau. Lets send it out to dominic chu here. We start off with the brazilian restaurant chain, fogo de chao. Revenues Beat Estimates, 68 million in revenue, 65 million is what was expected. They do see fullyear revenues of 273 million. That beats the average analyst estimate of 271 million. The shares are still halted for trading. Well bring you more details when they reopen. No trades in the afterhours. Also, fossiling with earnings beat, 1. 12 a share. 82 cents is what analysts were looking for. Revenue s miss estimates. Fossil gave weak guidance for the Current Quarter and fullyear 2015 for earnings and sales. Fossil shares trading down. You can see on the screen, just about 5 . About 388,000 shares have traded. Cree shares report a net loss of 19 cents per share. Analysts were looking for a 4 cent loss. Their revenues Beat Estimates 382 million. Analysts looking for 379 million. They gave q1 revenue and Earnings Guidance in line with expectations. Those shares down so far. For cree, theyve lost half their value on a oneyear basis. Down on light volume. 39,000 shares. Well keep an eye on fogo to start trading, too. Whats the real reason behind googles move to change its Corporate Structure . Thats straight ahead. With amazons prime day not so prime for sales. New data is in and you may be surprised by the results. Discover the luxury of freedom. To venture further. To experience more. To make a routine of breaking with routine. Come in to the lexus golden opportunity sales event, where youll find some of the best offers of the year on our most capable models. Now through september 8th. This is the pursuit of perfection. Welcome back. It was quite a bearish day for stocks today. Its still been a bullish year for deal making so far. At this pace, mergers and acquisitions could set a new record at 4. 5 trillion already. Some suggest that google could be a bigger part of the action Going Forward. In its newly altered state as alphabet, it could spin itself off or acquire new companies. Were joined by gene arkin. Welcome to you. How big a boom could this be for deal making here, googles restructuring . I think it could be massive. Certainly the talk on the street and the excitement on the street has been around transparency and the ultimate lift be of the veil on profitability. Theres many communities, however, tacking m a included who are ecstatic about the m a prospects this announcement could bring. The reality is, kelly, from an m a perspective, they have plenty of cash. They have the support and wherewithal to get any deal done. The important part is they have the ambition. Within you factor all these things in from an m a perspective it will be exciting over the next couple of years. What i love is its almost as if bankers dont care what they do. They think theyll be doing a lot of stuff Going Forward. Now you have one sort of core classic cash flow positive business and then you have another basket thats cash flow negative, potentially high beta, moon shottype businesses. Youre going to have two different deal making strategies. Im wondering if gene has thoughts on leadership. This will make it harder for google to restructure their leadership ranks. Every company it buys the ceo will want to stay ceo of their unit when they come into google. Will that be a problem eventually . Its actually a great point. Under this new structure, really it allows google to give all of its Portfolio Companies more operating lee way which allows it to be more nimble. Under this Holding Company structure, it really allows google to, gives them the room to shed businesses or to make big bets to add or add on to their existing portfolio. So simply put, it gives them more flexibility and allows them to dial up or dial down, depending on how a unit is doing. If a ceo of a particular unit is not performing, they can easily shed it or make a change. It allows flexibility within the structure. Im going to quote the journal here. Investors have rewarded google and amazon 200 billion in combined market cap for the promise of Greater Transparency which you alluded to earlier as well. Their take is, it isnt clear why. Why is this such a big deal for investors here . Thats a great question. I dont really think it is a big deal. I think they did it in a very simple way. You have Companies Like amazon and facebook who have slowly, you know, lifted the veil on some of the profitability within their businesses. I think google just did it in a very simple way. So it allows, you know, them to, again, you know, capitalize on the m a that may help either shed or add on to their existing portfolio. But you know, from an investment standpoint, thats really not, you know, my wheelhouse. From an m a perspective it, makes it simple and simple is good. Understood, gene, thanks for joining us. Simple as abc, 123. Exactly. I see what theyre doing for. Time now for a cnbc news update. The white house staffer charged with assault and Reckless Endangerment has been placed on unpaid leave and her white house access has been evoked. Authorities say she threaten her boyfriend with a gun. Dangerous fire broke out inside a sevenmile long tune until norway. The fire started in a tour bus and took firefighters two hours to put it out. Cadillac aims to increase its annual sales to 500,000 vehicles worldwide by 2020. That from an expected 275,000 this year. Thats according to the units top executive. At a jp morgan investors conference, he said cadillac must improve the quality of its Dealer Network in the u. S. Michael jordan entering a federal court in chicago today where a civil trial is getting under way. Jordan filed a civil lawsuit against the now defunct dominicks Grocery Store chain which he says used his name without his permission. Thats the cnbc news update, kelly, back to you. Sue herera, appreciate it. Alibaba shares have gone bust so far this year. With chinas surprise currency move scaring investors, well look to see whether the companys earnings tomorrow could help the stock bounce back or not. Thats next. Also, oil touching a fivemonth low. Its not just the Energy Sector feeling a fallout. We have under the radar names with the biggest exposure to oil. Thats in a little bit on the closing bell. Wow. Using unused data for all sorts of uploads. My constituents love. To. Watch. Me talk. Todays leftover data means a Brighter Future tomorrow america. Write that down. Right now, get 300 credit for every line you switch to at t when you buy any iphone for 0 down with an eligible smartphone trade in. Helli am a fully automatedt is Investment Advisory service. I can help you choose the right portfolio. Monitor it. And even rebalance it. Ive been called innovative. Revolutionary. And just plain smart. Id blush at the compliment if i could. But i cant. So. I wont. Say hello at intelligent. Schwab. Com im a senior Field Technician for pg e here in san jose. Pg e is using new technology to improve our system, replacing pipelines throughout the city of san jose, to provide safe and reliable services. Raising a family here in the city of san jose has been a wonderful experience. My oldest son now works for pg e. When i do get a chance, an opportunity to work with him, its always a pleasure. I love my job and i care about the work i do. I know how hard our crews work for our customers. I want them to know that they do have a safe and reliable system. Together, were building a better california. Welcome back. If youre just tuning in, a reminder an how we finished the day on wall street, the dow down 212 points, the nasdaq down 1. 3 and crude, giving up 4 , down below 43 a barrel. Lets send it out to dominic chu for a quick market flash. Whats happening, dom . A mover in afterhour, albeit low volume, cdk global, after bloomberg headlines that cdk global is considering a possible sale of itself. Cdk is an 8 billion company that specializes in Digital Marketing to are car dealers. And other type of machinery dealers, marine boats, all kinds of heavy machinery, dealers connecting dealers and clients and providing Marketing Solutions for them. Now, the story goes on to say that the company is also the target of active investors elliott management. They are saying the potential sale might be too large for any one firm alone and that cdk is said to be in discussions with banks regarding possible financing for potential transactions. Cdk moving up on, again, very light volume on the bloomberg headlines that the company may be trying to put itself up for sale. Back over to you, kel. 8 billion, a pretty big cap there. Chinas move to devalue its currency took a toll on stocks, particularly alibaba. Shares down almost 4 . In fact theyre down more than 26 so far this year. And tomorrow, weve got earnings, will that help turn this stock around . Lets bring in henry globe with todays panel. We have Kayla Tausche and ye land ylan mui. Is this enough . 27 . I think the key here is the call about the economic Environmental Impact on growth and the margin pricer and what the progress of the mondetization improvement. Alibaba just bought a big brick and mortar chain. Is the story that simple . I think the story line earlier in the quarter has really been about the stock market. People have been saying you cant judge this company as a proxy for the stock market, even though it was being sold just on a psychological basis. Yes. Because the stock market has 90 million people. Alibaba has 350 million annual buyers. I think now that weve seen broader softness on china that there will be bigger concerns about whether this is a deeper slowdown. Henry be, im wondering if you think this currency devaluation would perversely be a good thing for alibaba as it sets its sights on other markets like europe and the u. S. Could this potentially be a boom for the company Going Forward . Yes, i think for alibaba, alibaba. Com, which is really marketplace for exporter to gain the visibility and exposure to international consumer. So the devaluation of chinese yuan really should be a good thing for alibaba. Com. So the advertisers may increase spending on that platform. So thats the one thing i can think of it may be good for alibaba group. Ylan . I want to the question weve been talking about basically today, what are the Ripple Effects of the slowdown amongst the Chinese Consumer . Do you see the Global Implications or do you think this is something that the World Economy can absorb . I think really the economy, i think the purchasing power will remain intact. Although it can see from the alibaba group, the leading dotcom, may see some slowdown of consumer. We believe that is not should have impact on the growth for alibaba. We know youre looking for 34 Revenue Growth. You have a 97 price target on the stock, henry and a buy rating. Thanks for joining us and explaining your reasoning. Appreciate it. Henry guo. Thank you. Dont miss daniel zhang on strauk on the street. New data out today confirms that amazons prime day was a boost of sales and to the merchants that sell goods on the site. Prime day was particularly beneficial for merchants offering prime eligible products that had prime day deals or both. Some of them saw 200 yearoveryear growth on prime day. That same day the year before was not any special day. In july, theres 3,000 Strong Customer base with merchants like dell, under armour and kitchen aid that sold on amazon priced 30. 1 increase in online sales. And google shopping at 13. 2 . Now we should note that july sales were up 30 yearoveryear for merchant selling through amazon. In july 2014, sales were up 40 yearoveryear, which actually would indicate a decline in sales growth according to channel advisers data. All of this data doesnt point directly to a particular level of increase of revenue for amazon except for the way that the fees, amazon charges merchants for selling its on site. What we do know from amazon is worldwide order growth on prime day grew 266 yearoveryear, 18 more than on black friday with 33. 4 million items ordered. It was a big day. Its a little hard to understand exactly what it meant for amazon and the merchants that sold. Just going back to alibaba, we have two big global juggernauts. We have amazon here and alibaba there. Alibaba is saying, sell with us and you can reach the chinese customer. Is there a sense as to whos ahead in this horse race at the moment . Thats a tough call. Its funny because the way wall street measures or doesnt measure amazon and how many passions shareholders give amazon. It looks like theyre being tough on alibaba if you compare the two. Consumers certainly love their amazon. It does appear from the metrics that we know, or at least the financial models from the analysts that study it, it seems like amazons growth is growing. Is there any sense this was an effort to get more people to sign up for prime . Im a huge prime subscriber. Sure. I dont know if it was targeted at those people who dont have a membership or those who do . Definitely. That was part of the speculation for the reason why they did prime day. They said it was on the anniversary but it was also in july. A time when retail could use a boost and reignite folks that have lapsed their prime membership or get people to sign up for prime that normally might wait until the Holiday Season to do so. Thats typically when we think prime membership peaks. Although we really dont know. Thats when the stock peaks. They run through black friday, christmas, hanukkah. After we get the numbers, it comes back because people realize how much of their margin theyve actually had to give away to get people to buy the products. Any sense that theres extreme margin deterioration . I know. At risk here . I think there is. I think amazon doesnt care. I think that thats all sort of part of the deal and why its such a problem for retail and why it shakes up the industry. Because it gets away with so much more than a macys or a walmart could get away with, frankly. Appreciate it. Always love the numbers. Courtney reagan on the juggernaut. Wheres the beef . Thats what red robin shareholders want to know. We speak to steve carly to find out if rivals like shake shack are taking a bite out of their bottom line. Its an environmental disaster caused by the exact people whose job it is to prevent one. The economic and political fallout from the toxic mess you can see there, coming up. It took Joel Silverman years to become a master dog trainer. But only a few commands to master depositing checks at chase atms. Technology designed for you. So you can easily master the way you bank. Welcome back. Red robin sharply dropping today after the company missed revenue expectations. For more on this were joined now in a cnbc exclusive by red robin ceo steven carly. Welcome to you. Good afternoon, kelly. Let me reassure you we still do have the beef with our Second Quarter profits up 20 . I apologize. Up 50 basis points. Its a line im sure youre sick of hearing but we have to use it. Listen, whats going on . Is this the gourmet shake shack burger effect . Are burgers too trendy, are you not trendy enough . Were proud of what Second Quarter numbers we put up. As i said before, our profits are up 20 yearoveryear. Our traffic is up 50 basis points which outperformed the industry by over 200 basis points. The formula weve got, which is to profitably grow traffic did exactly what we hope. In some cases we trade revenue and traffic for that. Say that again. Your shares were down 9 today, people concerned about that Revenue Growth. Explain the thought process behind doing that. Well, kelly, we want to make sure we look at a couple of important metrics. The first one is profitability, quarteroverquarter and yearoveryear. Were comfortable that were in great shape there. The second one is market share. When we grow our traffic 50 basis points and the rest of our competitors are down 200, were growing market share. And thats another key metric. And the formula that we have thats based on value with reds tavern double at 6. 99 with the finest line being a bell bar program and quality which we did this last quarter about repositioning our salad line and kids menu, were confident that the formula still works well. A question from ylan here. This is ylan from the washington post. Food service has been a big job generator in recovery. Theres been a concern about level of pay that some of those jobs have. Im wondering where you stand on minimum wage and the fight for 15. Theres been concern that increasing minimum wage could lead to job losses in the future as companies try to cut costs in order to pay workers more. What do you think . Ylan, im glad you asked that question. Ed ared robin we are conscious of taking care of our team members. From a minimum wage standpoint, we hire very few minimum wage team members. Our average wage is several dollars more than the current minimum wage. Were confident were taking care of our team members in that respect. It doesnt impact us short term. Whats your bestselling product right now, steve . Our bestselling product continues to be our burgers. Were very pleased with the performance of our finest line, our 8 ounce angus fire grilled patties. Theyre holding up very well. The burger we launched with the movie promotion this summer, the genesis burger also did very well. What are you doing, we mentioned earlier, again, im sure these comparisons are to shake shack, the company doing quite well, revenue growing 74 on the year. Do you expect to get your Revenue Growth back above where it is now and if so, how . Or are you pullin levers, different metrics Going Forward . We barely missed that in q2. Revenue standpoint, we expect to be up 15 . Again, we look carefully at not only balancing revenue with traffic and profitable growth. We think weve got a nice balance going there. We dont compete with shake shack anywhere to my knowledge in the same trade areas. Oh, i got it. All right. Well watch their expansion and see if that changes at all. But for now, i hear your points. Thank you, steve, for joining us. Appreciate it. Thank you, kelly. Steve carly is the ceo of red robin. And epa crew accidentally spilled millions of gallons of polluted water into a key colorado river. That toxic mess now spreading to other states. Up next, why it could spell trouble for the agencys future. Stay with us. Here at td ameritrade, they love innovating. And apparently, they also love stickers. Whats up with these things, victor . We decided to give ourselves stickers for each feature we release. We read about 10,000 suggestions a week to create features that as traders wed want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. Who reads all those . He does. For all the confidence you need. Td ameritrade. You got this. What if there were only one kind of dog . Then it would be easy to know everything about that one breed. But in fact, there are over three hundred breeds of dogs. Because no one can be an expert in every one. An app powered by ibm watson will help vets tap Specialized Knowledge in the cloud for every breed. And whatever else walks, flies or slithers through the door. Ibm watson is working to make medicine smarter every day. The Environmental Protection agency is supposed to prevent environmental disasters, not cause them. But thats exactly what happened last week when an epa team accidentally spilled millions of gallons of polluted mine water into a key river in colorado. Nbcs Miguel Almaguer is in durango, colorado with the latest on this disaster. Reporter after declaring a state of emergency colorados governor came down to the animas river to view this river for the first time himself to see the pollutants. While it looks fairly clear on the surface, i want to show you what the problem is, what so many folks are worried about. Down near the river bed there is a sediment on the river floor. You can see this goldmustard colored pollutant that is rising when we stir the riverbed. Its what has so many people here concerned. The epa says this is toxic and its spreading down the river. More than 100 miles of the river has already been contaminated, and now we understand it is heading toward lake powell in arizona and eventually toward the grand canyon. The epa says they are doing all they can to keep this river safe. Theyre going to continue to test it in certain spots throughout the week, but they say the true Environmental Impact here may not be known for weeks, months, potentially even years. Now back to you. Such a tough situation. Miguel almaguer from nbc there with the very latest. Oil prices keep getting crushed. Up next well give you the names of three nonenergy companies that get hit hard every time oil falls 10 in one week. Apparently, theres enough history to draw upon there. And be sure to check out the spark, my new column explaining why electric cars are only as green as their power grid. You can read it now on cnbc. Com. G of the campus on day one. But youre armed with a roomy new jansport backpack, a powerful new dell 2in1 laptop, and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats what we call that new gear feeling. You left this on the bus. Get it at the place with the experts to get you the right gear. Office depot officemax. Gear up for school. Gear up for great. Dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is, can your business deliver . Introducing the Samsung Galaxy s6 active only from at t. Tested to withstand pretty much anything life throws your way. Switch to at t and get a 300 credit with eligible purchase and tradein. Well, if you thought the selloff in oil was done, it is not over yet. Crude plunging at 4 on the wti contract today. Its not just Energy Stocks that feel the pain when oil collapses. Deidre bosa joins us from vancouver with the details. Hi, deidre. Hey, kelly. We used kensho big Data Analysis to crunch the numbers for all s p 500 companies and we found some perhaps surprising nonenergy names that plunged as well. Were talking big players like apple, cocacola, bank of america. Theyre also among some of the worst performers on the s p when oil is collapsing. We ran the study from 2010 and found nine instances when wti has dropped 10 or more in one week. Those three names i mentioned, apple, b of a, and coke. They have traded negative 100 , or 9 out of 9 times. What is also interesting, i want to note, even oil majors, exxon mobil and chevron, have not seen such performances. Theyve only traded negative eight out of nine instances. On average bank of america loses more thn both of them. What is a historically safe bet is, no surprise here, volatility. The vix, or the volatility index trades positive 100 of the time. 9 out of 9 times since 2010. When oil is tanking. Retaining more than 20 on average. It is easy to pick out the falling oil stocks when crude is collapsing but investors may want to be careful of some of the less obvious nonenergy plays lurking in their portfolios. Of course it doesnt mean that it will play out this way in the future. We went back five years. But it is interesting to look at that trend. Particularly those big names that have fallen 100 of the time when oil is tanking. Back over to you. Fascinating. Deirdre, thank you so much. Turning to the panel, hope we can put that chart back up. So it was bank of america other names, kaylau wouldnt i guess theyre growth proxies. Apple. Ultimately, if everybodys falling off the board here, those are some of the companies that are going to get hit as well. Interestingly, bank of america and jpmorgan both warned about potential defaults or reserves for potential defaults in the oil and gas space when they reported earnings. But im frankly very surprised not to see the oil majors on there, especially given what we saw with their earnings last week, or in the last few weeks. They probably thought the worst was over, at least for their share price in the near term. But this hurts. And the third was cocacola. Elon as well. Youve got to think again kind of the Global Growth play there. To the extent this creates even more of a disinflationary environment and complicates the picture for the fed. I think part of the real discussions going on ahead of september. I would note the one voice you have not heard from recently on the fed, jeff lacquer. The biggest hawk on the fed, the person whos been most worried about excessive inflation, has been quiet and did not dissent in the july meeting. I think thats pretty important. Fair point. Do you know when we might hear from him next . Well, i can tell you im hoping to chat with him when were in jacksonville together. I was wondering. Thank you so much. Elon, appreciate it. Kayla. Thank you very much for joining us on closing bell today. That does it for the program. Over to fast money now. Melissa lee, whats on tap . One biotech stock was up 24 . Well name names and give you the trade. All right. Straight over to you guys. Thank you, kelly. Fast money starts right now. Live from the nasdaq marketsite overlooking new york citys times square im melissa lee. Our traders on the desk are tim seymour, brian kelly, Karen Finerman and guy adami. A big selloff but weve got two secret signs that the selling could soon be over. Plus apple falling hard on a bearish note from jeffries. Well tell you how much pain they think china will inflict on apples stock price. And later the cio of a 70 billion Asset Management firm says china is already priced into the market and now is a great buying opportunity. Shell tell us what shes buying right now. But first to the broader selloff here. All three major averages seeing more than 1 losses. But theres more than that. Oil and bonds trading at financial crisis levels. Th