And small caps are outperforming. Joining us for the hour is steve grasso taken by semis, is is that ahead of micron, g20 . I think that it is a bit of both bullard was not bullish. Market was expecting one thing, not the other. And micron is after the bell, so people are getting ahead of that people so either earnings or semis, chicken or the egg there, but that took us down. Something the bears point to, semiconductors are traditionally a tell on the economy and they are not at record highs. I think that they are still in correction so if you had to poll everyone now within the marketplace, people are going to err on the side of growth is slowing. Cant find anyone that says growth is ratcheting up. So these have been the bullseye for growthand they have been your cautionary tale thus far within the marketplace and with g20 and with china and everything all encompassing. Microsoft also suffering. Ten year back below 2 all factoring into the selloff lets drill into the big stories. We are dom, bob pisani, Rick Santelli and diana olick, and meg tirrell. And leslie picker has more on why this time should be different for allergan dom, lets start with you. So Jerome Powell speaking today saying that the Federal Reserve will act as appropriate to sustain the economic expansion. He says uncertainty over trade and Global Growth has increased, but he says whether the uncertainties will continue adding that policy should not overreact to any one today i ta data point and hinting at the potential for an insurance rate cut. I think in a world of lower Interest Rates, research seems to show that it is better to act preemgt differen preemptively and this is after James Bullard said that now seems like a good time for an insurance cut, but that 50 basis point cut may be over done but he does still see 50 total basis points of cuts by the end of the year. And lets get to bob pisani on the floor and bottom line is the market did not get any kind of assurance that there will be any 50 basis rate cut next month a little bit of a hissy fit, but visa has had a grit quartgreat , nike, boeing, all down today you look what is holding up, the same leaders that weve had throughout the quarter defensive names, insurance stocks have done well like travellers and the consumer stap willi stapers names have done well and finally one with the big names, a tremendous stock, walt disney look at this, 140 a 25 gain and this is one of the main reasons that the s p 500 is up nearly 4 this quarter guys, back to you. And meantime the nasdaq lags the major indices. Lets get up to bettrtha coombs. It is a tech story. We are seeing a bit of a move up in health care names biotech right now just inching into positive territory. As far as tech though, were seeing some of the biggest winners this quarter giving back at this hour adobe, coupa, microsoft, are giving back. And chips as you mentioned are the big drag ahead of microns earnings but not forget that chips have also been the best performer month to date up about 8 . Having rebounded but of course a lot of caution ahead of g20 and whether well see those tariffs resolved or some sort of peace with regard to them. Back to you. Turning now to the bond market, yields on the move falling below the 2 level Rick Santelli has more you know, this chart starts the of the day fed meeting last week and you can see the day after we spend time at 197 today at 198 but we have not closed under 2 since november of 2016 still time left in the market place. We had an auction today of two year notes, the most sensitive to what the fed may or may not do. Solid. At the end of the day, minus 333 basis points quite a bit of demand along with a 20 month low on Consumer Confidence really pressured the ten year note yields and lets focus in on a sector tied to the bond moves. New housing data yeah, a rough day for the builders overall sales of newly built homes fell unexpectedly hard in may, down 7. 8 , down close to 4 annually. And the supply rose sharply to a 6. 4 month supply the expectation was actually for a bump higher in sales given that big drop we saw in Mortgage Rates during may, down more than a quarter of a percentage point. Home builder Stewart Miller credited lower rates for its better thanexpected q2 earnings, but then the stock tanked during the investor call when lennars president talked about higher labor costs and pivot to lower priced homes. Back to you. Steve, what is your take on lennar i do think that they have spurred some activity. New orders are flat though. New home sales data. So they beat on deliveries, orders were in line. And when you start to blame tariffs when it is an average cost of 500 per home, it sounds iffy to me i dont want to say they are kitchen sinking it, but i think that they are using it as a convenient excuse. I do think that there is a lot of noise this there around the consumer not feeling as confident. Maybe worried about trade. Maybe worried about whatever else and not buying homes. I do think that they rebound from here and margins start to recover. Youd be buying today i always have a three day rule id see where it flattens out, but start to nibble when the stock is overly bearish amongst news that was pretty much out there. Quite the intra day reversal there. Turning now to the bid deal news of the day, allergen being bought for more than 60 billion. Per ter ril h m meg tirrell has more. I spoke with abbvies mvp and he said he wasnt surprised by the stocks reaction he is convinced that he will be able to win them over. He says this deal makes sense because the Company Loses exclusivity on its largest drug in 2023. It is the largest drug in the world. And he sees allergen botox as the answer he also told me he did look at other potential targets and speculation around more similar m a is already brewing bio again is down 20 year to date and of course it is not the first time allergen has been involved in a high profile deal. But will this one fine apple get ov finally get over the line . That is the question question especially after allergen has had several deal situations that didnt pan out back into 14, a hostile bid for allergen which proved unsuccessful and 2015, a merger was called off after a Treasury Department changed the tax rules. Pfizer was hoping to change to ireland by acquiring allergen but scrapped the deal. Yeah, a big blow. And lets bring in jared the fact is that they will redomicile here to the u. S seems like a win for the Trump Administration after the tax changes last year. Seems like it so far. I really dont know how much the taxes ultimately played in to this decision. But you stopped one invirgen and now this is sort of the antithesis so potentially it is debatable whether the Trump Administration or the Obama Administration is responsible for the inversion decisions that have been made. But this certainly goes against that does the share price move that you see make sense to you i feel like im the only person who foeels like this dea is not a disaster. The company is losing a big piece of its business. And so im not sure what else they were going to do. Could you stand still and do nothing, you can comeyou do a sf pearl which is they tried. Or you can do this which solves the top and bottom line growth problem. So i think that the stock move makes sense. This is typically what happens there is a big arc component but i think time will tell and i think the stop will rebound a bit. And for allergan, yes you recalled it a home run. It is a home run for shareholders i dont know how you could wake up today with this on the table and not be super happy about this outcome in general do you think it does make sense for the big phrma names to take on more debt in order to bring on the top line and bottom line growth. You are doing at a. Deal w dh rates at alltime lows so maybe there havent been too many examples that have been overly successful you could point to merck that worked out well. Well have to see. I think that it makes sense if you have a long term time horizon. You are looking past the next couple years with all the botox competition. If you can look out to a five year time horizon, probably not a bad deal and this is the third mega deal in the far inphrma space. How do you splay the trend you cant pick one stock. If you want to go, you go where the beta is, this way if you get a hit or a miss in one name or another, it will lift all boats. But that is up 11 year to date. I think ibb is a little safer than going with the individual play anything stand out to you i agree with bio gen. What you have is still a lot of uncertainty over a key drug from a patent perspective but that sort of fits the bill you could argue insight is an interesting deal but youve seen big time value oriented mergers this year and so maybe this is start of a trend. And so what do people hate about this deal . You think it makes sense on both sides. What is the Biggest Issue . I dont love it, i just again dont know what else investors expect abbvie to do. What are the other options i think the reason why investors dont like it is because it is still youre acquiring a company that had fallen out of grace. Very low sentiment it decreases reliance but not enough i think that is true. I think if you look at the portfolio of the constitution post the deal, definitely better so i think that if you allow some time to elapse and people go back and look at their models and cash flow and look at how this will look in three to five years, not so bad. Thanks for joining us good to see you. Still ahead, much more on todays mega phrma deal when we speak with fred hassan. And investors are closely watching iran developments and the energy market. Well speak with an oil expert who says a Different Event could actually have a major impact on crude. He will explain next and here is our data tracker Consumer Confidence weak in june reading of 121. 1 well below estimates and the case smaller home index rose 3. 5 in april dow down 181 heading toward the lows which were down 199 as your life grows, so do your needs. And with bank of america and merrill, the benefits you get can grow, too. As a preferred rewards member, you can enjoy Priority Service and exclusive discounts. So your growing life can be more rewarding, too. What would you like the power to do . What would you like the power to do . Is where people first gathered to form the stock exchangeee, which brought people together to invest in all the things that move us forward. Every day, invesco combines ideas with technology, data with inspiration, investors with solutions. Because the possibilities of life and investing are greater when we come together. We like drip coffee, layovers and waiting on hold. What we dont like is relying on fancy technology for help. Snail mail we were invited to a y2k party. Uh, didnt that happen, like, 20 years ago . Oh, look, karolyn, weve got a mathematician on our hands check it out now you can schedule a callback or reschedule an appointment, even on nights and weekends. Todays xfinity service. Simple. Easy. Awesome. Id rather not. We have about 42 minutes left of trade. Dow down 184 points. Nasdaq down 1. 5 Mike Santelli has the market dashboard. Pay attention, here are the four things that we will look at this howling for deals, more m a is needed and doggy bag delivered, a look at the food on demand on business and some stock dogs that have been neglected and whether they might get rescued. And rollover in banks, investors federal government the fed for relief and of course the Caesars Entertainment deal so big headline deals are hitting the tape these are the stock 3r50prices though the xbd is the overall sector index for brokered deals you see weakness not enough activity for these guys to really necessarily be cashing in even though weve had some good headline deals it seems like the general flow has not been that great. And there is skepticism i think among wall street . General about the long term franchise value of some of these firms. So what you see not telling you that you this is a ripe environment where the market is pricing the stocks for continued deal activity. So whether that is right or not, clearly the Investment Bankers are not cashing in and the stock reaction has not been positive. So dont know if that will disturnlg di discourage or encourage similar moves. Could it be that the bigger guys have taken more market share . It could be usually in an active deal environment, there is plenty to around and it spills over to everybody. So i dont know what the lead tables would show you. But these firms, especially if you have a lot of global deal activity, they shouuld reap something good from that so it tells you it is not such a busy environment that everybody is managing to feed off of it. All right thanks very much prop for the theme. His titles are so good, but so disconnected wow youre right great dog theme. Look forward to the next one extensions between iran and the United States escalating today with irans president calling new sanctions outrageous and idiotic and President Trump calling irans statement ignorant and insulting despite the war of words, oil prices relatively steady joining us to discuss, stris chairman of ihs market dan, thanks for joining us are you surprised that the tensions havent pushed Oil Prices Higher . No, because the other side of it is the demand side. And the most important meeting is the g20 for the oil are market, not the opec meeting because the question is there is a china u. S. Trade deal and that i think will actually be more significant for oil prices right now. But obviously if the tension increases, you will see an oil market that will start to react. Why do you think that trade and demand is more of a factor than iran which is such a major producer i know that it is largely not shipping oil after the sanction, but what about traditionally that would have been a huge mover. Iran as you say is a major produc producer, but fairly a minor producer if you look at what is happening to world demand, this year we see supply increasing by about 1. 5 Million Barrels a day just from the United States and demand has really decelebrated and only will grow about 1. 1 Million Barrels a day. So that is Holding Things steady in terms of iran tensions, have we learned about the importance still of the straits of hormuz, whether there are any alternatives or whether that will remain as crucial to oil trade . For many decades, it has been a key point. Things have somewhat changed with the growth of u. S. Supply and elsewhere. But you about 17 million to 20 Million Barrels a day of crude oil, another 3 million of product move through it, so you are talking 20 , 25 of Global Supply and if it were disruptive, which is hard to do, but if it were disrupted, you only have 7 Million Barrels a day to move oil. So the strait of hormuz has been a choke point as it has been for decades because of the volumes that pass through it and grasso, where are you on Energy Stocks . If you look at xle, were talking large intake gralegrate, they are up 11 year to date but if i asked you up or down in five years, they are down 6 they have done nothing forever the u. S. Is outproducing russia and the saudis it is not about oil anymore. Iran is about nuclear weapons, it is not about oil. That is why the market doesnt move on it anymore were not dependent on foreign oil anymore. Well, we are somewhat dependent on foreign oil but imports are down from 60 to about 15 . But it is striking as you say that it is like 4 Million Barrels a day of oil out of the markets from iran and venezuela and look at prices lower than they were a year ago and what is your year end forecast were using as an average price for this year and of course it fluctuates around 67 for brent and 59 for wti. Dan, thank you for joining us good to see you. 36 minutes before the closing bell take a look at the major averages dow down 161, energy is part of the losing members before actually only positives are industrials and Consumer Staples. After the break, a feast of analystcalls in the food space today. Well tell you which restaurant stocks to buy and which to stay away from. And fedex and my krmicron gearing up for earnings. And here is a look at the biggest laggards in these turbulent times, do you focus on todays headwinds . Or plan for tomorrow . At kpmg, we believe success requires both. 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Time for word on the street. 33 minutes left of trade kellogg got a down grade today firm says the company is taking the right steps, but they see headwinds from rising xwrgrain prices and also in the food space, Credit Suisse out with a number of restaurant initiations. Jeffries raising its price target on microsoft to 90 from 80. It keeps its underperform ra