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tv   Closing Bell  CNBC  March 27, 2018 3:00pm-5:00pm EDT

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brave new world there. >> there's a joke in there somewhere, i guess, but i'm not going to try to find it. tiger woods' interview heading into the masters, fascinating stuff. prediction here, if he is in contention saturday and sunday, the golf ratings will be the highest of all time. >> session lows across from all three major averages "closing bell" starts right now. >> thanks, guys. live from the new york stock exchange, this is the "closing bell." i'm kelly evans. >> i'm wilfred frost two breaking news stories. one on deutsche bank but first to washington with kayla tausche. >> reporter: a few headlines on trade from the white house press briefing that just ended press secretary sarah sanders said an agreement in principle had been made on trade between u.s. and south korea there's a five-year free trade agreement in place but the
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president moved to renegotiate that middle of last year that negotiation has been under way. south korea has also been seeking a permanent exemption from the steel and aluminum tariffs, so those issues are likely tied together sanders said we could see an announcement on that very soon she could not provide any additional details she said we'll hopefully have an announcement on nafta soon when asked about the prime minister of canada in a readout that the two leaders, trump and trudeau, had yesterday. trump said trudeau pressed the president to conclude nafta talks quickly. the u.s. readout did not include that information sanders said hopefully there will be an announcement on that front soon the two highest profile renegotiations of trade currently under way. the white house as of today is saying they hope those kblg soon at least with south korea, there's an agreement in principle. guys >> kayla, thank you very much. kayla tausche at the white house. meantime, got news on the --
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are you still on the phone >> just hung up. we got news on deutsche bank that relates to whether or not the bank has, indeed, been searching for a successor to the current ceo. a source tells me me the board approached richard nadi, head of goldman sachs international, a vice chair at the bank, which is a coveted rank that comes below that of ceo, then president, then vice chair. and that conversation has taken place and that richard nadi of goldman sachs is not interested in the role. of course, there's been stories in the last day or so the as to whether they're preparing a successor for john cryan someone close to the bank saying the issues they have at the bank are ones of execution recently, not ones of strategy distancing from the idea any conversations are going on deutsche bank down 1.4% today. it's down about 13.5% over the course of the last two weeks
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alone. so, clearly, the pace against -- >> it's not pretty. >> yeah -- and against the last year-to-date down 26%. since john cryan took over july 2015, down some 48%. when banks elsewhere have been doing relatively well. they did make a full-year loss, partly because of a tax writedown, so that three-year turn-around plan going into a loss - >> one additional wrinkle on this, which i wonder about, is the role of china's hna, a financial backer of deutsche bank there were reports he didn't get along, per se, of the ceo, the chairman and then whatever hna's plans are in a time when all these big chinese investment firms have been forced to pull back and divest assets. >> hna, it's interesting because the course of the last two or three years, they've been active and separately another source suggested that somebody was also interested in speaking to matrt chavez, current cfo of goldman
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sachs. that wasn't a formal conversation i do think it sounds like the bank -- all boards are always planning for the future, so might be as simple as that >> but is this routine success or john cryan is on his way out? >> i think that's a fair question other sources close to the bank would point out that john cryan does speak german, over 40,000 of the staff, well 50% of the staff could be their primary language richard nadi doesn't speak german. >> is that a key requirement for this job >> marty chavez does speak germany. >> really? >> richard nadi was approached whether or not chavez was formally approached is not clear or unclear it seems like those stories in the last 24 hours that the board is actively planning for a successor sounds accurate. the share price since john cryan took over down 48% since july 2015.
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>> thank you very much. let's flip over to deirdre bosa she has the latest on facebook as this fallout continues. >> well, a number of reports today saying that mark zuckerberg will or expects he will have to testify before congress in the coming weeks this comes after no less than three congressional committees have asked him to do so over data privacy standards in the fallout of the cambridge analytica scandal. we reached out to facebook it wouldn't confirm that and just said they received the invites and are talking to legislators. now, one report today saying he will appear on april 12th before the house energy and commerce committee but a spokesperson for that committee issuing a statement that says, quotes, reports of mr. zuckerberg's attendance are incorrect the committee is continuing to work with facebook to determine a day and time for mr. sdmruker berg to testify. now, guys, there's still a lot of questions, clearly. one thing that is becoming clear, it's becoming a whole lot more difficult for zuckerberg to avoid appearing before lawmakers
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himself. last week he said he would do so if he was the right person many government officials are saying, well, he is, in fact, the right person, not one of his deputies or another facebook representative meanwhile, a bipartisan group of 37 state attorney generals are demanding explanations for facebook's data practices. a letter addressed to mark zuckerberg from the group says, quote, facebook needs to answer our questions so we can know if the company is upholding its end of the bargain with its customers. facebook shares taking another hit today. the losses continuing now at the low point of the day, down almost 5%, getting close back to the bear market territory. back to you. >> thank you it's not just facebook i just saw bond traders, wilf, referring to the tech and media social problems as dragging the ten-year yield below 2.8%. the dow is now down 215 points. >> it certainly picked up the pressure this covered the recent u.s. fallout for facebook let's have a look at the uk
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fallout. mark zuckerberg said this morning he will not appear in front of uk parliament's digital culture and sport media. the chair, damian collins, had this to say about that. >> given the extraordinary evidence we've heard so far today, and the things we heard in the other inquiry, i think it's absolutely astonishing that mark zuckerberg is not prepared to submit himself to questioning at the parliamentary congressional hearing given these are questions of the fundamental importance and concerns of facebook users as well as to our inquiry >> zuckerberg not a uk citizen, therefore, cannot be forced to appear, said he would send chief technology officer or chief product officer, chris cox this comes as whistle-blower chris wylie appeared in that inquiry saying donald trump's campaign made him come forward he had this to say about the relationship between facebook and cambridge analytica.
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>> it is categorically untrue, categorically untrue that cambridge analytica has never used facebook data it is -- facebook data and the acquisition using alexander's app was the foundational data set of the company that is how the algorithms were developed. >> came cambridge analytica maintains it did not use facebook data and said it deleted data when asked by facebook saying christopher wylie was a part-time contractor who left in july 2014 and has no direct knowledge of our work or practices since that date. >> the market down 250 points. it just tipped over in the last 15 or 20 minutes, wilf look at the tech names, f.a.n.g., as we call it, in particular facebook shares are down 5% right now. netflix is down almost 6%.
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alphabet is down 3.5%. and amazon is down almost 3% again, whether you look at the ten-year yield noud falling below 2.8% or the fact these major averages have tipped over this afternoon, it's a little bit of an outsized reaction to a story we have been covering for days >> the interesting thing as well, yesterday when we saw markets rebound, it was very much the sectors that it suffered last week it was tech that rebounded very strongly and financials rebounded very strongly. if we look at the sector performance, it's the opposite once again tech very much the weakest s&p sector down 2.9. yields slipping. it's yo-yoing. >> we got the man, santoli, on set with us. michael, what do you think is going on we were up 100 and then all of a sudden things turned around. >> big-cap tech, the sentiment is fragile will. the nvidia news they'll stopping testing of self-driving cars
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took semiconductors down that was a place outside f.a.n.g. that had been working i think the back drop is, these are still very overpopular, crowded names. a lot of house money is in these stocks basically ran up so much and i do think when that goes in reverse, there's want an obvious answer for the market, especially when bond yields are being compressed a little bit and, therefore, bank stocks are not a leadership group. >> banks and tech shouldn't be so strongly correlated as they are. >> there's no particular need for that. >> why does it remain? they account for so much of the market cap together and they are up together or down together >> it's a little risk appetite thread through those, but i don't think it's necessarily that they're moving together it's just that the two single largest sectors of the market that both are hitting friction at the same time i don't think there's necessarily a reason you have to say when the market is up 680 points one day and spills back by 280 points, it doesn't change
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the story. it shows you it's an unusually jumpy, spring-loaded tape right now. in fact, if you looked at the days in the past where you had a three-day sequence, down 2% two days in a row and down 2%, almost all the prior instances are in bear markets where you actually have a very emotional kind of aggressively two-way tape. >> by the way, tesla is down about 7.5% now it rarely has days down this much, even though it's been a volatile stock it speaks to the mood you're describing, whether it's tesla, whether it's social media platforms -- last time we checked on twitter, it was down 10%. >> it's very twitchy right now again, you know, i don't know if you want to necessarily say there's a big theme you can draw out of it except for the fact that the market is a little back on its heels don't forget, yesterday's rally took this market from the brink of kind of going to a new low and violating its uptrend. we got a little room from there,
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but not all that much. >> we should mention the ten-year as well let's have a look in on it because on friday we ended the low 2.8s, 2.81 we got up to 2.85 yesterday, so a big move up in the yield we're at 2.78, breaking below that 2.8 level rick santelli talked so much about hitting below that range it's a big factor for banks. if people are buyinging that bond, it shows likely rather nervous about sentiment. >> risk-off and also the fact that you've hit a little soft patch in terms of the macro data, both in europe and here. no big deal. the consumer confidence number came in lower than expected this morning. still at a strong level. doesn't change the idea we're in a strong economy but the direction of surprise for the economic data has been a little to the downside. >> here's one for you. adobe systems, one of the best performing, most solid stocks, down 5% today. it's not just the companies who
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you think would be directly in the line of fire over concerns about social media privacy or something like that, mike. even one of the stalwarts here. >> where do you have a lot of gains in hot money it's in those stocks how many days did adobe go up , 2,%, 5% on no news the momentum was there i think you have a little you be wind you could say you have a pretty radical unwind in the big cap tech growth stocks today and the market is down, you know, whatever, a little less than 1.5%. it's not exactly decimating things. >> mike, great stuff i'm sure you'll be back in a few moments. market down 240 points on the dow. let's go back to the facebook fallout. twitter is selling data, too, and more vulnerable so he's selling the stock. twitter selling 10% in reaction to that. >> joining is andrew left, executive editor at citron research thank you for your time.
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listen, if everybody else wasn't selling off, we would think it was you who had done it to twitter, but what specifically is your concern with this company? you think it's the most vulnerable in tech to privacy? >> well, i think people today are just looking at facebook in a vacuum by itself i took a step back and said, okay, who else -- when we saw congress was requesting facebook, google and twitter, you then said, who's vulnerable? now you see twitter trading four year short interest at a low on a multiple that spread compared to facebook and google that we haven't seen in years. so stock prices are vulnerable, business model is vulnerable because they do sell a fair amount of data their data licenses business and while it might only be 15% of revenues, it goes to 80 to 100% of gross margins so it's a high percentage of their earnings >> today we've heard from
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twitter and their statement makes very clear that public tweets are viewable and searchable by anyone it's part of the power of twitter. direct messaging is not something that they ever sell. are you suggesting, andrew, that the last statement might be wrong? because if something is -- >> i was referring to -- that was referring to, in my article, i had a link to a story that was done and the story you'll see was an undercover where people discussed about selling direct messages, so on and so forth that was not done by me but i sourced it. >> either way, you said earlier that one of the factors behind your decision to short it is that congress is requesting to see all of these companies but a request from congress doesn't necessarily mean earnings are going to fall or there's any wrongdoing. >> absolutely not. >> do you have a sense of any further evidence than your comment they may have to appear in front of congress >> i mean, what's further
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evidence they're obviously doing it i mean, what they want to know, to what extent is it being done? we're not going to argue it's being done people look to the privacy issue last week. but it's been longstanding, no one cared. going forward, at these multiples, twitter becomes uninvestable until we see changes being made on the social media space. >> just to be clear, though, your concern with twitter is that it's vulnerable to regulation by the way, it's not even clear regulation is bad for these stocks it could actually be good. look how facebook is cozying up. why would twitter be more susceptible to a crackdown when it's saying, by look, our nature is public, that's very different than a facebook? >> there's data licensing business is a very high percentage of their earnings that's the key thing. >> but that data is public, is what the company is saying. >> if it's public, why are they
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able to generate $400 million this year selling? >> half or a good portion, we understand, is their mo pub platform so the other half is them eago gating it but ther saying it's not -- these are your tweets, these are who you follow and that is in the public domain >> no, i understand that i'm just saying that if any restriction comes on data licenses, also when i put out my note, you can't look at twitter, you have to look at it compared to facebook. facebook is 16 times right now look where twitter is. so, in doing that right now, if you were going to buy facebook and short twitter, that wouldn't be a bad move whatsoever this morning when twitter was trading at $31, it was drastically overpriced when you look at the overall environment. simple >> yeah. >> okay, andrew, thank you very much for joining us.
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>> and, obviously, the market's reacting and telling you that. great. have a nice day, everyone. >> the market has taken a lot of these names down with it hard. it's a tricky one. twitter down 10%, facebook down 5% microsoft more than 3% the chips we talked about under pressure as well. >> the nasdaq is down a full 2% as we stand. a lot coming in the last hour or so we've got 42 minutes to go, as we said, down sharply. particularly the tech sectors. >> the "closing bell" is just getting started. stay with us >> announcer: members of congress want to make a very aggressive move against china. that's coming up plus, after two or three wildly volatile days, do you want to buy into this market or bail out? this is the "closing bell" on cnbc, with kelly evans and wilfred frost, live from the new york stock exchange.
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you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. . welcome back to "closing bell." take a look at the s&p 500 50-point range today we were in positive territory up until a short while ago. two little legs. one around 12:15, the other around 3:00. the initial reason here, late in the day, as that ten-year moving down was a problem we hit that 2.8 level where
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we've been sitting for a while broke below that you see that, 2.784. that dropped the bank stocks this is kbe, all the major banks are in that. that moved the rest of the market down. remember, financials are 15% of the s&p 500. then we had a problem with tech. this was a little earlier in the day. about 12:15 or so, tech stocks started moving to the downside i think a lot was moved by nvidia, believe it or not, making a comment out there saying they were suspending their self-driving car tests that dropped all the rest of the semiconductor stocks you might saythey're not necessarily connected, but that's a big component of the semiconductor profits. that's an issue. the whole group dropped here not heavy selling, just buyers stepped back the f.a.n.g. stocks, facebook is a big issue. now we have a couple of major issues around potential earnings issues with not just facebook, but even with nvidia down the road and other semiconductors. i think that's the major issue worrying the market. it's not trade, it's the
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earnings around tech back to you. >> the old bread and butter. bob, thank you very much let's get to our closing bell exchange. joining is sylvia, here with us at post nine, along with steve grasso, director of institutional sales at stuart frankel and rick santelli joins us from the cme in chicago >> over the last couple of weeks you picked any number of things, it was rates what i find is kind of ironic we're looking at the ten-year and what started this whole thing out was a sniff of inflation, worried about rates popping. now everyone is worried about, what are rates telling us? it's the risk-off trade -- >> what's the tail and what's the dog? they said the social media selloffle is taking the ten-year lower so - >> we've had a record run. as soon as you get anything
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that's negative in the least -- you have the facebook story that's bled out through to twitter. you have the nafta originally, and then it was aluminum and steel and now the tariffs. can you go any which way you want the truth is, i think if the market can navigate the next couple of weeks, specifically this week, we start to run into earnings with earnings we have the tail wind of the corporate tax rate being chopped down to 21%. i think that will be enough to get buyers off the sidelines or buyers on the dip. in between now and then, though, the market is extremely susceptible to break that 200-day moving average that could be terrible for those buying the dips. they go into a cave if we break that 200-day. >> what's your take, is it pure risk aversion this afternoon >> well, i'll tell you what, before we get to the answer to that, real quickly, i want you to see
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it isn't just us look at the year-to-date of the shocks, that's two-year in europe, having the lowest close since january 10th the bund, lowest yield close since 9th of january the london gilt, lowest close since 25th of january. fives under 158 are closing at lowest levels since 15th of february if you look at 30s, since the middle of february, and if 10s close without being in the 2.80, last time twe did that we closed 2.71, the 5th of february. maybe why? i think what's going on with facebook opened so many large issues for that space that i think that's part of it, but the real macro issue is, growth. and i think that we're stalling a little bit it's kind of normal for first quarters if we close under 2.80 today, i think any good bond guy would tell you we'll lock in that 2.95 high yield close for the year,
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on february 21st, for a while until we get into the meat of the second and third quarters and actually seeing the data showing a rebound and what's going to be a paltry first quarter gdp. >> you see the trends magazinemy fi magnified. do you get the sense people were overpositioned for the tech trade, keep going and the banks to keep going and all this now getting pushed out of the market >> as you said, i sit and -- i see traders looking at these things very tactically last friday when tech pulled back and facebook pulled back, we were trading the cex bear fund on friday that fund was up 3%. on monday it was up 13% off facebook rebounding a little bit. good news around apple, positive news around microsoft. so, i think, you know, traders can look at these opportunities to tactically benefit and gather
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some alpha if they're on the right side of the trade. >> are they lumping all of tech in with facebook >> on friday that seemed to be the case there was certainly a lot of talk about facebook. we got a lot of questions about which index holds facebook, which etf can we trade on monday it sort of seemed to turned around. a lot of investors and traders were saying, facebook is still five times s&p, three times profit margin, it's a massive marketing machine if zuckerberg can come out and fix this, make people comfortable with the privacy, you know, perhaps regulations will be favorable and it will push the sector back up but buying on the dip is, you know, fruitful with the 3x fund if you're on the right side of the dip. >> if you get it exactly right at the right moment and it doesn't blow up in your face. >> yes. >> what could go wrong, steve? >> sylvia, thank you very much steve, rick, thank you very much as well. a little more than 30 minutes to go here with the dow down nearly 300 points again, a lot of this is just happened in the last 35, 45
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minutes or so. we'll keep an eye on that. also the industrial stocks were hit hard by trade war fears. the sector falling again today still down about 1%. we'll tell you which names have been hit hardest oil with a late selloff as well don't go anywhere. see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know?
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welcome back to the "closing bell." 30 minutes to go to the close. we are at the bottom of the trading day. there's the dow, down 320. we just hit 331 a moment ago if you look at the intraday chart, you can see how the selling has picked up in the course of the last hour or so. >> by the way, let's show what's going on in the nasdaq the dow down about 1.4%. the nasdaq is doubly as worse. the nasdaq is down almost 3%, more than 200 points a loss has to do with the common thread for this surprising late-day selloff which seems to go back to the tech. f.a.n.g. names are down sharply. one of the worst performers in the dow is microsoft nvidia being cited after reports of a tesla crash the ntsb is investigating. nvidia said it would halt operations and the stock has been hit. >> some big move on the dows in companies not related in any way to tech names like goldman sachs. if we look at the s&p sector,
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financials, again, have been a crucial market mover down 2.2%. that comes back to that ten-year yield we've seen slip below 2.8% >> look at the nasdaq down -- nasdaq point decline, it's not worse than the dow but starting to get close we're talking about someone with a third of the actual level. the nasdaq trying to hang onto the 7,000 mark with this big drop. >> to bring it back to the interest rate impact, on friday last week we saw all 11 sectors lower. yesterday we saw all 11 sectors higher today there are a couple of sectors that bucked the trend. utilities and telco are higher despite the rest of the market being lower. benefits from the rates slipping utility as a sector is up 1.6% anyone long that today, congratulations. >> the dow is now approaching nearly a 400-point drop. yesterday we were up -- what was it at the end, 600 odd points on
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a monday one of the third best point gain in history for the dow last thursday, friday we were down 1100 points. today it appears to be more of a return to form of last week, unfortunately, especially with the way the selloff is centered in technology. less than half an hour to go so we'll start to hear what the orders on close look like. we're approaching the end of the first quarter so i don't know if that -- if the positioning will feed in. >> we should say, four stocks currently higher on the dow, so general electric still doing well on that possible breakup talk, possible gains there, up 3.7% procter & gamble, coca-cola, nike and verizon all higher. pretty much everything else lower. facebook has been interesting today. we are down 400 points on the dow. facebook suffering partly because of the political pressure as well i wonder whether those political hearings are going to just reveal more than the company, perhaps, wants to be revealed. whether investors will be concerned and more will slip out. the dow is down 400 points
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>> look at facebook. let's go over to bertha coombs at the nasdaq with a look at what's going on there. >> in a sense today, you could call it hitting the brakes on a.i., all artificial intelligence, artificial learning these are the big players in that realm today they're all under pressure for a variety of reasons, starting with nvidia nvidia down today, as it says, it is going to stop its own cars in self-driving in the wake of that uber fatal crash last week in arizona as the state of arizona hits the brakes and suspends uber's ability to restart those tests, at uber for the moment has suspended them as well that is weighing on chipmakers overall. not just the ones that might be involved with self-driving cars such as nvidia or nxpi, which had been positive coming into the hour but now it looks like starting
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to join the rest of the fray overall, chipmakers involved in a lot of these ai things, including the chip equipment makers like lam research and supplied materials that supply the equipment for them to make those chips. this comes today, ironically, as alphabet's waymo self-driving unit says it will be building cars with jaguar and hopes to have a self-driving fleet hitting the streets of phoenix in coming years. you wonder if that will really come to pass until these investigations are completed about exactly what happened with that uber vehicle in arizona and facebook as well, of course, i'm -- i'm forgetting one, tesla, the ntsb is investigating a fatal crash with tesla in which the batteries caught fire after the car hit the guardrail. tesla shares are well beyond
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bear market territory. down nearly 30% from its high over the last six months and really starting to hit some negative momentum to the downside finally, facebook is in correction today as well with this latest pullback today on fairly strong volume, on concerns about how regulators are going to continue to pursue this company still not clear whether mark zuckerberg, when or if he will appear before congress in hearings here. he has certainly said he will not be testifying in the hearings that are happening in the uk this technology, guys, that has really fueled a lot of the growth we've seen in tech as we continue to sort of see investments in machine learning across so many industries. today we're seeing a little bit of the downside, a little bit of concern and a little pullback on some of the momentum we have seen in these investments. >> bertha, thank you very much for that
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nvidia, as well, we should mention ceo on "mad money" on thursday, it's been a crucial stock this week and the last few months just off the lows, in fact, during the -- that hit by bertha we're now down just 324 on the dow. nasdaq down 2.9%, having been down more than 3%. >> for the month, by the way, it's looking like it's not going to be pretty march is going out like a lion instead of a lamb. we're seeing big declines across the financials big declines in tech that chart bertha had up there was extraordinary. down 18% since the start of february some of the best-performing names in this rally for the last couple of years now are being reconsidered by investors. as youmentioned earlier, the place they're going today are those rate-friendly areas where they feel like, you know what, maybe there's some upside to the way the ten-year yield is behaving. >> and the selling in some of those tech names is indiscriminate microsoft is down about 5% now, similar to the facebook move
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clearly, very different positions they're in at the moment let's get an update from seema modi on netflix. >> as we discussed this reversal we're seeing in market sentiment, technology front and center, as bertha was alluding to some big names in social media and large cap tech one other consumer technology name under pressure is netflix it's down as much as 6%. speaking to our markets team here, if netflix was to close down by 6%, it would be its worst close am over two years. what's been interesting about the nasdaq's role in this broader market rally is it's been led by not only facebook, apple, the semiconductor names, and netflix has played critical leadership in the nasdaq movement so, therefore, this pressure we're seeing in netflix, clearly something traders are keeping a very close eye on. not just today's movement, but i would point out, netflix still higher by over 50% in 2018 after
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having a blockbuster 2017. so one of those consumer tech names clearly in focus as we look to the markets turn to the downside. >> seema modi, thank you mike santoli rejoins us. i think it's important to take a step back and say, what actually is going on in the market? it's not just, oh, facebook is in the headline so social media is selling off netflix, sure they're in the data business to some extent, they don't have anything to do with that. microsoft being down does this present an opportunity for the most loved parts of the market or is this howl markets overowned are behaving >> i think it's the latter, at least in the short term. you also have to keep in mind that the market in the past few days has been trying to draw those distinctions, trying to set aside facebook and alphabet, ad-supported companies that might have scrutiny. the other day microsoft got a big upgrade and the stock was up - >> a trillion dollar market
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company company within a year or two. >> on a daily basis you can get swept up in those things i do think it's about crowded stocks under some kind of liquidation and a sloppy kind of rushed rotation is what's happening. it's not really rotation into anything that has kind of a similar risk profile it's just kind of sell them now, figure out what the right valuation of these things are over time. >> one thing that benefitted last week from selling in equities was gold, up 3% down today the dollar is also a little higher with yields falling might not make sense necessarily anything to draw from that, particularly the gold weakness it suggests it's not that much of a rush to safety. >> it's not. i would also point out that in general for the past two months it's been slirly an equity market event it's been an equity market that raced out too far, too fast. by the end of january it was too overloved. it's had to retrench hard. all the while the credit markets have been relatively calm. they've had some cracks but nothing really serious
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the currency markets have not moved a lot. the dollar has been weak but it's not been the epicenter. similarly gold, i think it's been a little more of an after-thought. people have been pointing out that the gold/silver ratio has gone higher which is a little sense of risk aversion but, again, you're stretching to find those signals it's all about stocks, what's overowned, what needs to be taken down a bit and the fact there's not an obvious alternative at these levels. >> bonds are starting to play into the debate the last week or so. >> in a very narrow range. not so much what we got used to, let's say, in the past couple of years. >> dow's down about 350 points so, we're hovering close to session lows a little off that right now. bob pisani, what are you hearing on the floor >> it's a better than 70-point move in the s&p. we have two issues number one, uncertainty about the effect on earnings from trade wars some of the analysts say not likely others disagree. and, number two, affect on earnings from what we're hearing from the tech group. we heard from nvidia with
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suspension of self-driving cars, downgrade of facebook and twitter. it's a dreary picture for techs as well. these are fundamental issues, not technical issues for the market there's the s&p. two waves, one after 12:15 when nvidia made the announcement, semiconductors dropped, and 3:00, the ten-year yield dropping below 2.8%. that's the lowest since early part of february that caused an overall droop in the market, but particularly bank stocks led the charge banks have been holding up well. you see they drift when tech is weak, banks join in, that's 40% of the market and whole thing fell apart at that point. then we had the tech stocks weakening throughout the day there you see a little after 12:00 as they went negative, largely on the nvidia news semiconductors down as a group it wasn't so much the volume went up heavy, it was the canceled bids. buyers simply lacked interest in
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moving into the markets. this has been a generic problem for stocks in the last couple of weeks. then industrials weak. this is the trade war dispute. a lot of fighting about how much fundamentally any of this trade war will affect boeing the whole market sort of drooping down here bottom line is, still fighting about earnings, earnings related to the fundamental picture, earnings related to tech issues, earnings related to the trade wars we'll have a lot more on the markets from the floor of the new york stock exchange. don't go away. we'll be right back.
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mike santoli also with us. i'll start with you, if i may, arthur talk us through what you feel is driving this and also about volumes volumes have been light on some of the big moving days recently. is that true today >> yeah. today has been kind of a story of the nasdaq. nasdaq led on the downside, followed closely by the s&p. andthen when they finally got to the dow, things really started to come apart. nasdaq had a variety of things nvidia backed out of the automated car services and that started things down. facebook is getting banged around it was easy to see nasdaq as the primary target they weighed on that the selling in nasdaq and the s&p started much earlieearlier. when they cracked the dow, it's in freefall.
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>> anything about the close, art, or the fact we're kind of finishing up the first quarter here that's contributing to the recent weakness or - >> no. the last time i looked, the close looked rather neutral. you know, it's not like we saw thursday and friday when it was the market on close indication that dragged us down there is some hope that on the last day of the month, you might see some buying. but they could get some bargains today, then, if they moved in. >> chris, look at your notes coming into this, it looks like you -- despite a couple of short terms, you rl bullish on equities is that still the concern when you get days like this >> i think it's healthy to always get concerned about days like this, particularly when the market leadership is the one that causes the rollover to happen as art said, you get the s&p to the dows you should be concerned about that if you go back to the three pillars of strength of the market, when they go, then you change your outlook. and that's profits, inth rates
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and the dollar if the dollar remains relatively stable, if not slightly weak, that's a good green light to keep this train on the track profit cycles should be double digit earnings growth, if that changes, that's a negative interest rates have a hard time getting over 2.9, a hard time. and this whole story of the discount rate going up and pushing down valuation is not there right now. so this is really a spate of news environment let's get into earnings season and see what happens but we're still bullish. >> mark, this is -- when we call it a correction, usually you're referring to what happened before we came into the year rip roaring. we went through 1,000-point threshold after 1,000-point threshold and everyone was talking about the melt-up. is this a healthy correction for you? are this opportunities here on a day where we see more what feels like indiscriminate selling or how do you assess this >> for us it is. we fully expected this year was
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going to be far more turbulent than the tranquil past we've had over the last 18 months or so. to us, this is not a disruption of the bull market this is a delay in the resumption of its advance. we're using this to advocate buy the dips orientation we're not surprised weesh seeing a retest here of lows, flirting with 2600, maybe flirting with the february low that's natural and customary we see that kind of retest before we can put in a durable bottom upon which we could see a reassertion of a more bullish attitude it might take the economic surprise index to turn around as well it's fallen for three months they move in waves as it starts to reaffirm that economic conditions aren't rolling over, i think investor sentiment will turn, positively. >> if you can all stick with us, we'll continue the discussion in a moment the dow is down 411 points as we
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speak. but there is one of two stocks positive ge is one of them and morgan brennan has a look at why it's higher. >> that's right. shares of ge are up about 4% right now. i've been following the stock over the last year, you're probably wondering why, especially given the fact that the dow is down about 400 points, more than 400 points right now. the reason, there are reports, we'll call it rumor, speculation on the treat today that there is a major buyer in ge, and the rumor is speculation is pointing to warren buffett's berkshire hathaway ge has not commented, and we reached out to berkshire hathaway and waiting to hear back there's no indication or evidence to suggest that this is actually the situation that's taking place here, but just the fact that there are these reports floating around is sending shares of ge up about 4% on this down day for the markets. this is notable given the fact this is a stock that just
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yesterday broke below $13 a share, which sh seen as a key level for that stock also given the fact it's down about 54% over the past 12 months meantime, while ge is an outperformer here, other industrials not the same situation. major industrials in the dow and otherwise, names like 3m, united technologies, boeing, honeywell are trading lower. again, taking a look at shares of ge, it's an outperformer today. back over to you >> morgan, thank you mike, they're always the counter -- i mean, lately. >> it's the anti-bellwether. >> the anti-bellwether for this market what are the bellwethers then? >> it's the ones we've been talking about. in terms of portfolio manager performance,ist been big cap growth, the stuff that's leading the downside today and there's not really a place that i think is an obvious place to hide. i think the dynamics of this market are very noteworthy
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this could be the fourth 2% day in a row it's the kind of jumpiness you don't typically see -- >> i would be surprised if we had four all of last year, by the way. >> that's basically right. clearly, you know, there's a lot of raw nerves and a lot of what seemed like ill positioned investors. i'm not saying people are trapped but i think they feel trapped when you've had -- before this you had three 5% down moves in two months who knows if this will be the fourth. >> you said ultimately you're still bullish. what are you buying? >> i think you have to look at the leaders that have cracked and fallen below the market multiples. the names in the sector that michael talked about, the tech sector, old techs are falling below a market multiple but growing above market multiple, some industrials have come down, whether it's tariff and trade tantrums or a view overall on what interest rates will do longer term. wage growth feeding into lower margins. all of this, i won't say they're excuses but you tend during
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correction phases to start with one thing, and a lilypad, you go to another and another and another until a positive catalyst comes along to pierce the ceiling, to grind up and take that sawtooth market back up in a grind-up fashion >> art, what do you think are the bellwethers here >> as we just said, i would go back to looking at the techs i think people are frightened they got in a little too early ideally you retested the 200-day moving average it looked like it was perfect. things seemed perfectly set up for the rebound. you retested the lows. that test held people started buying and then they climbed all over each other. now when nasdaq is headed south, it's the, oh, my god, was i too early? that's why you're seeing nervous selling here. >> mark, overall, do you feel like the data of the u.s. economy underlying has slipped enough to justify this equity
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market pullback? >> i don't think so. i think what's happening is extrapolation of the equity market and it will continue in perpetuity, but i don't think that's the case. the first quarter has shown a weakness relative to the other quarters of the year secondly, with the tax reform package and the fiscal boost and budget act that have yet to gain much traction, i think you're going to see an acceleration of economic activity over the balance of 2018. therefore, investors will -- they will have wanted to take advantage of the pro growth, pro cyclical trade. >> thank you appreciate you joining us to talk about the selloff today dow is down 425 points let's get back to bertha coombs at the nasdaq where it looks even worse. >> yeah. talk about getting in too early, as arthur was mentioning if you take a look at a three-month chart of the nasdaq
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100, that's where all the pain is today right now the large cap index is just close to correction territory. when you think about the fact that we hit an all-time high at the end of january, we corrected in february, hit an all-time high again just on march 12th. we closed at an all-time high. we're almost back in correction. this is where the volatility is happening right now. the vix today is up above 20, the overall volatility index when you look at the nasdaq volatility index, it has been hovering near 30, showing a big spike as those big f.a.n.g. names today are all getting hit. for the moment, amazon and apple are higher, but netflix and alphabet are both in correction territory once again and then we have the gang that is in bear market territory led today by facebook and tesla. but other tech names that have
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really been lagging, maxim and qualcomm among the chip names. we're starting to see the same kind of damage we saw back in february when we had those huge washout selling sprees in a number of sessions the volume today, not quite as intense. not quite as frenetic, if you will, but, wilf, heading back over to you, nonetheless, the negativity is a little bit serious here, it appears. >> it is, indeed we have just under three minutes to go. the dow is down 370 so a little off those lows which were down below 400 points let's start with the two-day chart in the nasdaq. bertha has already run you through the crucial things today. but just a reminder that yesterday we were up more than 3% today down more than 3%. of course, coming offwhat was terrible week for the tech stocks last week interesting hearing art cashin
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talking about the selling in the nasdaq started an hour or so before the other markets started to get dragged down. the likes of nvidia, crucial facebook right in the eye of the storm, down a massive 5%, dragging down the rest of the index as well. nasdaq is down better than 3%, i.e., 2.9%, as we approach the close, just two minutes away a look at all three indices because nasdaq is the laggard, dow outperformer down 1.5% s&p down 1.7%. we're off the lows of the day as we approach. the dow now down only 350 as opposed to 400 points. let's have a look at the sectors today because tech is crucial as it has been for the last couple of weeks but there's a big interest rate theme running through this some sectors are, in fact, positive utilities up 1.6%. teleco up 0.4% they tend to benefit when we see interest rates fall. technology is the worse. financials down as well, 2%.
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again, they tend to suffer when interest rates fall. the treasury note slipping below 2.8%, where it's been above for quite some time. the move today has been a steady sliding of yield today buying of the bond down to 2.777. if we zoom out to the year-to-date chart, you'll see how long it's been in a 2.8% range. we dipped below 2.7 for the first time since late january. bob pisani joins me today. talk us through your main themes in terms of what we're seeing. >> we had debates before about what the issues were around trade wars that was dominated for several weeks. now in the last few weeks, week or so, we have two issues emerging we have separate issue of facebook, how much is it going to impact earnings on social media in general and broad this could be google, in fact, if you get less user engagement. now the nvidia news. the question, how much might that impact any earnings around
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any semiconductor groups as well so, a little bit of fundamental issues here floegt around. these are not technical issues at all i think they have some soul searching to do. >> yesterday's bounce short-lived. we're down 343 points on the dow at the close the nasdaq down nearly 3%. ringing the bell at the nasdaq is bravo's sell it and the nyse was the new york mets. baseball season kicking off. that's it for the first day. kelly with the second hour >> thank you, wilf welcome to the "closing bell," everybody. i'm kelly evans. you're right, john, the applause on days like this at the bell feel so out of place, you know it's such an ugly session on wall street. anyway, john levin is with us, mike santoli here's how we're finishing the day. dow dropping 340 points on the bell, 1.4% drop.
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the dow is the outperformer. the s&p 500 down 46 points to 2612 the russell 2000 down nearly 2% to 1513. the nasdaq codown 3% at the bel mutting it just above 7,000. we have full team coverage of the selloff. bertha coombs up at nasdaq and bob pisani on the floor of the nyse. >> 75-point range in the dow even since the standards of early february, that's quite a move let's take a look at the s&p 500. we were modestly positive throughout the day about 12:15 or so we saw a slight dip this was related to some tech issues overall really starting to move south. about an hour and a half prior to the close and that's when we saw some big moves down overall. the tech issues we've been talking about all day around nvidia and the semiconductors, all drooping middle of the day facebook and twitter on the weak
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side as well the really important thing happened at the ten-year level and the ten-year treasury about an hour and a half ago because we dropped below the key point of 2.8%. that's the lowest we've seen since the early february moves remember, we're supposed to be moving up. moving down is a bad sign because stock guys say, what do the bond guys know we don't because we're supposed to be moving up in yield right now that immediately dropped all of the big banks. not just the money center banks like bank of america, but the regional banks like u.s. bancorp and regions financials you have 40% of the s&p in those two dprupz we saw the industrials generally droop. remember, all of these, particularly boeing, are proxies for the trade war issues that was not a major theme today, but, again, the market got engaged in this soul-searching about what exactly it's going to need, if anything, for overall earnings earnings are expected to grow
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20% this year. the reason the market held up so as well is because you put the global economic recovery with the tax cuts you have 20% growth in earnings. the big issue is this -- what's the impact of the trade wars there are people arguing there won't be many impacts and the market is overreacting that's a big debate. more importantly and more recently is the whole tech earnings question. issues around social media and facebook is broader than just facebook hits social media and potentially companies like google you might have less user engagement, people going to other kinds of platforms then the nvidia news, not a help anything that questions high earnings, causes the big momentum names to immediately pull back, sell, and then the buyers loose interest. you don't have to have big volume the buyers step back and stocks will drop without some kind of enthusiasm buying into those stocks didn't close at the lows, 344,
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but not far off it back to you. >> bob, thank you very much. mike, i have good news i don't think i can see mr. met -- >> mr. met left the floor. >> he left the platform. >> plus the markets closed, can't go down any more. >> when the futures started trading. let's get to bertha coombs at the nasdaq twitter down 12%, facebook down 5%, netflix down 6%. it was ugly. >> mr. met always seems to be around when those gains are lost from earlier in the day. yeah, we've got the nasdaq 100 down 9% from its recent march high not quite in correction territory. had led by these big cap stocks today. that moved lower facebook, of course, now in bear market territory amazon, netflix. take a look at some of the self-driving cars. that's really where the damage began today. nvidia intraday announcing it was basically going to hit the brakes on its self-driving cars,
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road tests it would just do virtual tests for now. that sent the stock lower. it also hit the chip sector. artificial intelligence, that kind of learning, self-driving has been one of the big drivers in tech right now. and in most industries as they try to embrace the technology. among the others getting hit and feeling collateral damage include alphabet it's waymo division will be launching new cars and, in fact, it believes it will actually have a fleet of self-driving cars that people can hail for ride services starting in phoenix in coming years. this comes on the heels, though, of that uber fatal crash in arizona where arizona has put the brakes on ber's tests. then you have some of the chipmakers also involved there today feeling some of the collateral damage. tesla today right now well into bear market territory. down nearly 30% over the last six months
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tesla is being investigating now by the national transportation safety board a crash there last friday, the car -- a car that crashed into an oncoming guardrail, the battery burst into flames and then it crashed into another car, a fatality involving that vehicle as well. and then again, the big cap tech names. right now many of them holding up microsoft yesterday after a monster day and an upgrade, analysts saying this could be the next $1 trillion company today, reversing course and being one of the biggest drags here on the nasdaq in terms of point impact netflix so far has held up, but some of the stocks are starting to look, once again, very, very weak technically, kelly. we are seeing a bit of a replay of what we saw back in february so quickly after having hit an all-time high just on march 12th >> yeah, even last week. bertha, thank you very much.
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joining me as i mentioned a moment ago, cnbc senior market commentator, michael santoli and john levin is on set as well, ceo of levin capital strategies. john, just want to start with you because you can be our wise man who has seen so many - >> that's impossible - >> seen so many ups and downs. you can tell us how silly and foolish we are to focus so much on these one-day or maybe not. what do you make of this strange slide in the markets lately? >> my wife says, she doesn't, don't worry. you own good things, they're going to be fine but my view is that the interesting points is that you've had a very strong market for many years and there are many people in the market who have done very well and have had a momentum at their backs. when stocks -- we had a nonvolatile period now when this volatility, it
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raises questions. >> what are those questions? >> i think the -- i think the biggest -- the way i would rank the questions would be the ultimate question of trade policy are we going to have a really breakdown in trade >> i thought you were going to say the question is, is the expansion over, is the rally over >> i don't see - >> is the recession -- >> quite the reverse we speak to many companies. >> if that's not true, do any of the other questions matter >> yeah, they do that's the second point. i do think trade's important i think you may be in a process of exceptions to trade but the technical position of the market where so much money has gone into index funds, so much money has gone into etfs and so much algorithmic trading has occurred that there's a certainty in price discovery don't forget, thursday morning,
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friday and today the market was not down to 2:00 nobody can points to something that broke it. >> in fact, mike, earlier in the last couple of days we've been talking about how we looked -- we were trading poorly when europe was open but we closed, we kind of rallied and today we had the dump at the end. >> let me summarize. >> quickly. >> the companies we speak to, they're doing well. >> well, that's quick. in a nutshell, that's all you need to know, right? >> the market is having its own adjustment almost independent of what the fundamentals are right now. >> that's right. >> by the way, it's a giveback from the market having outperformed the real corporate economy for a good, long time. especially in the concentrated momentum stuff i don't think this is some kind of, finally the momentum people got their comeupance we're assessing how soon this digital magic feature will be brought to you by the largest names in nasdaq. that's the big question. when facebook goes down as much
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as it does, for legitimate reasons in the short term, who owns facebook and what else do they own >> i was going to say, we were talking the last couple of months about how are these big platforms actually kind of a defensive place in the market? can you just count on the cash flows and treat them as the new enterprise or consumer staples in a way now it feels like, all right, maybe it's all momentum up it's momentum up, momentum down. what do you think? >> i think that's overstating it a little bit when you look at the earnings growth of a facebook or google, it really is a phenomenal story. just look at the earnings from mobile advertising from facebook just five, six years ago it's just incredible to that regard, kelly, i think the market is overstating some of its reaction to what's gone on mike's got a good point. there might be legitimate concerns there to think self-driving cars are somehow not going to come to our roads and whatever a pause in a
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program here or there, it doesn't matter in the long run they are coming. they're going to change exactly how we drive and how we get around and there will be companies that profit from that to me it seems an overblown reality. >> but i think it's worth taking a step back. >> why is it overblown when the stocks go down, dennis, and not when nvidia more than doubled in a year and 50 times earnings was that overbought? >> that's a fair point, mike i'm saying if there's a collective leaf out there that it's not going to happen or happen two years slower, if anything, these sorts of things focus the regulators' minds to figure out how to get these cars on the road. you could actually argue it's in some ways a positive for actual products that are tested and accepted by the public and by the government >> john, with these names that were -- you know, kind of the classic -- so much of the market momentum, facebook and the rest, is that stuff you would own, stay away from or now are there
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opportunities that they've come in a little bit, to mike's point about how much they've ramped? >> we generally own google, which as down, as mike said, in sympathy with facebook and then you question the advertising model. i was thinking about it today. it's different than the tech boom in '99 where companies were high without earnings and speculative. it's different from some of the other crazes because these companies, as we said, facebook has 2 billion customers. google, amazon have multitudes of customers, millions of dollars on their balance sheet there's no financial crisis and they don't seem particularly expensive. i think the issue is, they've been bought in the index funds when the money comes out of the index funds, they'll be selling. >> go ahead, dennis. >> you know, i was prepared to talk about how the market was up and then i turned around and, oh, well, the dow is down 350 points i think there's some
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algorithmically here, as you touched on before, we can't quite put our fingers on it, but there is something strange going on and the vol has gone through the roof god bless those short-vol traders out there. there's something algorithmically, the complexion of the market feels different than five years ago. the way it can turn on a dime as we've seen in the past few days in particular. >> the rhythm and mechanics of the market are definitely changing they are always changing they're different right now. but i actually think that we want to get away from the mechanical explanation for what's going on. two months ago it was those short vol funds and then it was, it's just trade wars and then it was just -- well, no, it's a correction and the market will find a reason for what's going on after the price shows them that people were selling stocks. >> when does it end? >> look, this morning you checked off most of the boxes for a successful retest of the lows, as dennis said that was the story line up until about 2:00 we didn't give up all those
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gains. we're still about 1% above friday's lows. but i think it dents the psychology to see a day like this. >> let's talk earnings lululemon is one we were waiting for. kate rogers brings us those numbers. >> a very strong fourth quarter. this is their holiday quarter. they beat on every metric. eps came in at $1.33 revenues came in at $929 million. estimates called for $912.4 million. comps, a nice beat, 11% gains for the quarter. estimates had been calling for 8.7% rising. also their direct to consumer net revenue up 42% they also gave very strong q1 revenue guidance the stock is up slightly for the year so far, but right now up by nearly 8%. also one more thing, nothing in here about a new ceo their ceo search is still ongoing. if we get anything more on that after the conference call, we'll bring it to you. back over to you >> that's right. it's up 8%
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it's not all red in this market. john, before we go, what is your advice to investors right now, then >> value, rice a lot of things are down in price. value, ders fiction, different kinds of things, yield, yield opportunities. >> any examples you want to give - >> not going to mention -- i don't want to mention names but i'll mention a group in general, industrial companies seem to me really interesting. lots of cash flow, capital, the debt will get paid back in a couple years u.s.-based is good >> are you looking at ge i just have to - >> sure. >> i just have to ask. there's speculation if warren buffett might be looking at is it. >> my partner -- 7,000 people at ge, and my partner jack murphy are looking at ge. rumors are berkshire is there and it would be great because we bought the stock at the wrong price. >> all the price have been a wrong price today. >> we all know around here dennis, what about you, what are you going to be watching now as we go forward?
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>> we haven't talked about this at all today, kelly, but rates look at what libor has done, back to its post-crisis high rates matter immensely across the economy. and so are we going to be in store for more fed action, more than the market anticipates? that to me is the ultimate question >> trillion dollar question. guys, thank you so much. appreciate it. dennis berman and john levin joining us to talk these markets. guess what we'll talk about it, the yield on the ten-year broke below 2.8% today. for more on the move in bonds and across the markets, let's bring in our steve liesman and ricky "rick" santelli. rick, let's start with you and what we saw play out in rates today. >> it's interesting. i just want to address that last comment. if you're looking at libor going up as a structural issue to get nervous about, you're on the wrong path the path you should be looking at is ten-year note yield. closing in 2.80s for 22
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sessions today is the 23rd. here's the story it's not only the ten-year the five-year, the 30-year bond, the gilt, the shots, the bund. we're seeing global rates closing below key levels granted, we're at 2.78 now and there's still a couple hours left in the cash market. i don't look at 3:00 fixings for interest rates old school on the cash market closing but it looks like that's going to be the case as you see on the chart another thing to look at maybe you should look at other short instruments. december fed funds it has rallied about six basis points since tuesday and wednesday's fed meeting. it's at the loftiest levels since the 20th of february when that contract rallies, it diminishes the perception of an aggressive fed i'm not saying the fed is going to be affected but no doubt a variety of issues seem to have put more buyers in treasuries and the only thing i can think
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of that would be is, outside of inflation, and i don't think that's the issue, at it's moderated, is growth not only domestically but globally is not as rich as it was a quarter or two ago. >> steve, you know, it's definitely been a little choppier the last couple of months but maybe you have to go through this so the data can start surprising back to the upside again i don't know >> i think that's right. i'm going to say i completely agree with what rick just said i talked to a couple friends of mine and it's worth going through the tale of the tape here first of all, bonds woke up, if you look at the ten-year in the morning, bonds woke up happy yeelz were on the way down from the very beginning and then they took down the auction in a pretty good way, considering the amount of supply we've been through and considering we get another round of supply tomorrow in the seven-year auction that's going to go on so, you wouldn't necessarily be buying bonds if you were worried
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about supply that supply issue is not really running as a good -- as a good reason for what's going on in the markets. then what i heard is essentially the drop in yields later in the day was more of a victim of stocks bonds didn't lead stocks lower bond yields went lower with stocks here. so i'm not seeing a reason for what happened in the bond market more just reacting to stocks i will say one thing quickly which is if markets are going to trade like this, 600 up one day, 300 something down the next day, it just shows me that nobody seems to have very much conviction in what they're doing here that seems to be the most operative idea nobody believes in what they're doing. >> steve, let me jump in there is another way to look at it we had a rally of proportions we've never seen that started in december 2016. why should the corrections be any less unique? i don't buy it inspect anybody
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who wants to cut through all that, just do a monthly chart. every month put a dot on the close and it will smooth out in essence, when you go up thousands of points every six weeks and then you have a correction, why would that correction be any less unique? i think there's some merit - >> i'd point out, you have a short week here and i heard some guys say, look, you're doing your end of the quarter trade but you might do it early today in part because thursday is a partial day. that could be something. i don't know if i can say this on tv, but i called up a bunch of guys and said, wtf? they said, we hope you were going to tell us wtf nobody knows what went on today. i hope if anybody comes with a definitive answer, i would question their certainty >> it's a whoholy week. >> later on. not till friday. >> why the face? >> exactly we got to go i was going to ask you guys in a word, what you make of the fact that, look, there's no difference in the rate you'll get for holding something 30
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years versus six months these days, rick that has a lot of people scratching their heads >> the flat yield curve has a variety of reasons to exist, not to mention central bank ownership of a variety of sectors, including fixed income. unnatural outcomes because unnatural conditions exist. >> thank you so much rick santelli, steve liesman joining us to talk about these bond markets. it was another wild day on wall street. down nearly 500 at the lows. dow went out 344 and nasdaq got brutalizeded tethteam coverage continues afr e short break live from the new york stock exchange after this
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welcome back to "closing bell." market action has not stopped after hours. restoration hardware climbing back it was down as much as 13% now higher by 6% after hours revenues -- excuse me. earnings beat revenues, $1.69 adjusted revenues missed expectations, $670 million analysts were looking for $67 be
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3 million. strong earnings but weak on top line that's something analysts are digesting in extended trade. shares now up better than 8% in after hours. kelly? >> thank you r.h. and lululemon popping on earnings despite a brutal market day. let's talk about that. the dow is down 344 points, nasdaq down about 3% joining us, kenny and gordon thank you for staying with us. i know you wanted to skedaddle, especially after a day like this what do you make of it, kenny? >> i think it's a continuation of the story the market's anxious, it's been vulnerable, there's some technical stuff going on as the market's broken down i have to tell you, in your previous segment when you were talking about the market being different and the automation and the algorithm and you wanted to get away from it as a reason why, you can't get away from it as a reason why the market turns as quickly it was -- we're down 300 and down 500 two minutes later. >> that's exactly what someone
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said i looked at the market and we were up 100 and turned around and it was down 200. >> you can't dispute it's the technology and algorithms that cause those moves to happen as swift as it happened >> which includes up 680 >> that's absolutely true. >> and that's what's scary like you said, we were up 200 and then down 400 in three minutes. you're scratching your head, saying - >> what headline did i miss? >> right what you have to realize is that that part is what's changed. why is that happening? i think it's because of all the issues we've been talking about the vulnerability, the anxiety is very much there. >> gordon, what do you think, if it's magnified by that kind of trading, what's going on here? >> the market structure is an interesting discussion to have one of the things you have to look at that's interesting, when the volatility picks up, people stay away from dark pools and come to the exchanges. we've seen a lot more actions in the room it's been exciting for the traders. it's been kind of revitalizing
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for some ways it's been rejuvenating and we've enjoyed it. >> you may be the only ones on days like this. >> the fact of the matter is, we want the volume to come here you know, it allows us to focus on our skills, which is trading equities for customers all that being said, there is a lot of headline risk out there and you're seeing this market being vulnerable to that we have had some deals, there was a small banking deal today, some takeover news but everything seems to be vulnerable a rumor comes out that north korea went to visit china and their reactor is back in play and now what does that mean for president trump, who's got some of his own baggage to contend with that seems to drive both the bond and stock markets into frenzy. >> do takes like this become selloffs in search of a story? we've had plenty of headlines since this president has taken office, and even before trump, that, you know, we just sailed
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right on by blissfully up a quarter of a percent - >> i have to agree with mike ultimately the stocks and the market is telling you something. it tells you it's concerned -- it's not in search of a story. it's going to tell you the story. it's going to tell you why when you -- when it ultimately finds its level. i won't be surprised if we see a test of the 200-day probably tomorrow, the way it felt tonight. it needs to test it again to make sure. if it fails -- listen, if we didn't have that news over the weekend, on monday morning - >> what news >> the news about the u.s. and china coming together. everyone playing nice. if we didn't have those kind of positive moves, the market would have tested. on friday wet closed right ate the lows, right at the average on monday morning, the market never closes low on friday on monday it would have gone lower had we not had those that was the saving grace. all of a sudden sh breathed a sigh of relief because - >> you think it put it off >> i think it absolutely put it off. >> last year the market had calluses it would look for excuses almost
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not to move a lot. we had the same trading technology, the same systems were loaded up the same way now and what was the conversation six and eight months ago this market is asleep. it rotates magically sector to sector it's the same technology but deployed in a different way because the environment is different. one of the con tech actual issues -- a lot of investors feel it's a late stage a late stage of the financial cycle. >> if we go to september, this would make it the longest rally ever it would surpass the 1990s. >> whether that matters or not is almost irrelevant in the moment because i think it creates this reaction habit for new news oh, if this happens, then maybe the fed gets more excited and rates and inflation go up as opposed to everything is going to be fine because the fed has our backs. >> what are you going to be looking for? >> part of the am replify indication is because we're going to a quarter
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march has always been an active month. you couple that with the fact it's a goo friday holiday, you have a three-day weekend which is very unusual for an end of march quarter. now you have a lot of this energy and anxiety and people may or may not want to carry it. >> i totally understand that but in january, when we had this incredible month, everyone was bracing for the ent d of the month. we're up so much on the dow. you get the opposite effect where it's like, gee, we had a rougher february, rougher march, maybe people rebound and start buying does that mitigate that pressure >> to me it's one of these things where something that's in a certain direction will stay in that direction without a compelling reason to turn it the next compelling reason i see is going to be earnings based on tax savings. those won't be coming straightaway we're still vulnerable to headline risk for a while until we get to earning season that's where the rubber meets the road we may be disappointed there and then this thing could --
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>> final word, kenny >> like gordon said, thursday's the end of the quarter because friday there's no trading. so, you got two more days. so, i think he's right i think the market feels like -- it almost feels like it wants to flush. i don't think you'll get thursday all these people come in and the market rallies 1,000 points i don't think you'll get that. quite honestly, i wouldn't be surprised if you saw the market testing, holding but testing the 200-day moving average at the end of the quarter. >> it will be an interesting couple of days thank you. let's see how we finished today. the dow was the best performer with a 1.4%. s&p was down 1.7%. the nasdaq was down nearly 3% as big cap names like facebook, amazon, netflix, alphabet, all down big and the russell 2000 down today over to seema modi at headquarters with some names that have given back the most from yesterday's rally. >> from gains to losses, we looked at the stocks that have seen the biggest percentage drop
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from yesterday's highs what you'll see is that it's highly concentrated within technology but even abbvie down 3% nvidia, micron tech and advanced my crow devices seeing substantial losses to the downside between 4% and 7% from yesterday's highs. as you were pointing out, technology playing a big role in today's selloff. netflix losing over 6% its worst close in nearly two years. alphabet, apple, and facebook lost nearly 5%, once again in bear market territory. twitter moving lower on this bearish report from citron research that closing down 12%. that gives you an idea where we saw the big moves. >> seema, thank you. seema modi with the selloff, it wasn't just tech banks were also leading the way down wilf is back with those details.
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>> let's go into it because clearly yields have been an important factor if we look at the ten-year, just today we can see it's down below that 2.8% level. if we broughtaden out to look at year-to-date, it's the first time we've seen yields slip below 2.8% but year-to-date we still have yields higher than we start the year quite significantly we started at 2.4%. that plays into which stocks are affected when. let's use bank of america as the most interest rate sensitive if we look at it over one week, down 8%. down 7.7%. a big selloff because it's an interest rate sensitive bank stock. if with he look at it year to date, it's still flat as the sector goes. yields, as we said already, have
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risen over the course of the period year to date. if we look at investment bank performance, goldman sachs down 6% relatively speaking it's outperformed over the course of the last week, only down 6% because it's not as interest rate sensitive year to date, it's down 3% it hasn't enjoyed as much of that pick up in terms of yields. it's really that yield factor in the last week that's played things out over the course of the quarter. other factors come into play if we look at one thing moving much more than any of these u.s. banks, it's some european banks. deutsche bank highlights perfectly, one week down 11% much more sharply than any of the u.s. names year to date deutsche bank down a massive 27%. again, i just would keep looking at what europe is doing each morning, whatthe yield picture in in europe and risk on/risk off sentiment. europe is suffering. we've seen american markets pull
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back but european markets more significantly in correction territory. >> is it okay if i call you wilfy or - >> just occasionally in the 4:00 p.m. hour. not sure i like it for the 3:00 p.m. >> wilf, thank you very much sticking around and bringing us news on deutsche bank. how about ge, as mike calls it the anti-bellwether one of the few bright spots in today's wild market. the stock rallied the most since april 015 with 4% gain there were rumors about warren buffett planning to build a stake in the company yesterday the stock hit the lowest level since the financial crisis let's bring in our "fast money" traders, david sieberg and guy adami to talk more about this. welcome back david, i'll start with you, what's there to glean about -- do the -- does the rumor mill in overdrive tell you people are getting desperate or what do you think? >> possibly. at the end of the day we did -- i think late january we described that we didn't believe breakup had
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any merit. we walked through the valuation, roughly 11 to 13 bucks we described debt-like aspects i see the disconnect from fundamentals you'll have trading ranges today the stock was up on speculation warren buffett is going to take a stake. i think it's gotten to a level where it's exhausted i think it's dead money. i wouldn't touch it. you can trade it, but you can't invest in it. >> now that we established in the 4:00 hour that wilf is now wilfy, is it just a simple "y" or a wilf-i-e. >> i see it as an i-e. >> i'm an i-e guy as well. what do you think about general electric i think david makes a good point. i will tell you more than five or six months ago they said the stock would trade between $11.50 and $15 when everybody was doing is it much higher. i will say the stock bounced on a lousy tape if you're looking to trade the
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stock, you can do it against yesterday's low which i think was like 12.78 or something. i would still say this, the problems at general electric are ten years in the making and they don't get unwound on a warren buffett headline i think tremendous headlines for general electric in this environment. >> what happened i lost you not paying attention >> i've been told it has to be wilfy with a "y. i have a wilfy with a "y" if my ear. i'm being chastised. i'll let you go. top of the hour, 5:00 p.m., much more coming up on this market day on "fast money." >> wilfy sounds like an adjective. >> i know. >> it's a "y". >> tech dragging down the market today. we'll discuss whether this is a buying oornipptuty 3.5% drop for the tech sector, right after this that's the beat of global markets, the rhythm of the world.
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welcome back to know "closing bell. we have a news alert on nike and the nfl. they did a renewal of their agreement to have nike be the official apparel sponsor of all 32 nfl teams that just got announced. that's a big deal. nike and the nfl, in particular, had a lot of controversy over the last several months. this business deal shows there's still confidence in this deal. multibillion dollar deal long term back to kelly at the new york stock exchange.
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>> what was the controversy? is it because of the anthem protests and how to deal with that or the nba where they're coming up with too many uniforms -- >> this isn't about the too many uniforms this is just about the business of the nfl, the ratings down, the anthem controversy, some domestic abuse issues, concussion issues, fighting with president trump, the commissioner renewal issues. there were a lot of problems with the nfl over the last several months but the sign nike is willing to do a long-term deal, given all of that, shows some confidence in their business sponsor ship community that could be healthy for their business for the next few years. >> we don't know the numbers, do we i imagine something like this is a huge top dollar kind of thing. >> i think, if my notes are right, about $1.1 billion deal in 2012, so that was about five years or so. this would be at least maybe eight years, i think, but we don't have the details you're looking at some over billion dollar number. >> and we'll see how many more uniforms they come up with. >> lots of fancy colors.
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>> yes thank you. much more ahead on the market for this volatile day. utilities, staples, why interest rates were down. so, too, were financials and tech those fared the worst. the "closing bell" is coming back with more, especially on the tech grid, live from the new york stock exchange. pssst. what? i switched to geico and got more. more savings on car insurance? a-ha. and an award-winning mobile app. that is more. oh, there's more. mobile id cards, emergency roadside service... more technology. i can even add a new driver... ...right from her phone! geico. expect great savings and a whole lot more.
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welcome back if you're wondering what happened to the market today with the sharp late day selloff, look no further than tech, big declines in that sector, including names like nvidia, tesla and facebook nvidia was down 8% facebook down 5% how should investors play it now? kevin o'leary is here along with jason, ceo of grit have you both along kevin, i know you made your thoughts on this facebook thing being a teapot clearer why do you think it is all of a sudden the whole attitude on the whole sector, companies that have nothing to do with facebook, have turned sour >> facebook doesn't fall into the kacategory of overheated pe but many other tech stocks do. tesla is an automotive company
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trading at stratospheric price at some point it's going to fall to earth and maybe it's starting to do that now and will trade 14 to 11 times like other automotive companies do. that's the risk. i think the pes in tech are still very high and people are saying, i want to compress those because there's all kinds of new risk there's a change about to happen we don't know where it's going to be. i'm at 28% cash right now, and that's high for me i've been sniffing around energy i'm fascinating by the price of oil doing very, very well while all the underlying names aren't working. exxon, chevron they're not working and i think if you get it right, if you can get the sector right, you can pit it up and dividends as high as 4%. that's 10% on the year if you get it right and i'm starting to smell opportunity in energy.
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>> jason, the sort of keep it simple for f.a.n.g. and f.a.n.g.-like stocks for so long, they were so dominant, these almost inevitable monopolies in their segment. i just wonder right now if the market is rethinking whether that dominance is now going to make them targets? obviously there are is, or is this a basic shakeout, basic evaluation adjustment? >> the pe for facebook isn't that high. kevin's correct there. but what kevin doesn't realize is people don't want to facebook aanymore and that's going to be a huge problem for their future and the regulations are going to start impacting their bottom line in the ad networks and they're not going to be able to do m&a transactions the way they've done in the past with such ease buying instagram and whatsapp kevin's wrong about facebook on the tesla front, he loves the product, as everybody who loves tesla products does and they
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can't shut up about them because they are the greatest cars on the road elon has been a little late getting every car to the road. he's always late model 3 has been a little challenging. we say in silicon valley, it's better to be late and great than on time and subprime the car i drive every day is sxroerd. tesla will come roaring back obviously, it's a fully priced stock. nvidia is wildly fully priced. kevin is right the pes can get out of whack and you have to look at each individual name if you look at nvidia, they're going to get their butts kicked over the next couple of months because cryptocurrency lost two-thirds of its value. that was a big part of nvidia's story. self-driving is obviously going to take a little pause as we adjust and investigate some crashes. that's not good for them and so nvidia has some big challenges also vr was going to be their big push and nobody is buying vr
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goggles. that's dead on arrival for the fifth time probably. nvidia is in trouble for sure. >> kevin, you mentioned energy, which i don't know if it's your roots there, but is is it a sector -- the oil prices have been going up but is it for the right reasons, quote/unquote it started when trump brought john bolton into his cabinet and some concerns if there's a flareup geopolitically speaking. if you were to put market timing aside, is this a space you feel comfortable being for a long time >> i think so. the saudi want to work with the russians, but none of that stuff is mattering it's actual use and demand is increasing slowly as use continues in the asian market. even though we're producing a ton of oil, it's not satisfying demand on a global basis my premise is, i'm going to bet
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with my dollars, which is always putting money in harm's way but i'm putting it into balance sheets producing a lot of cash right now with the price of oil where it is and bag me dividends north of 4%. i want to fight back a little on facebook management and the number -- and the quality of people.there i want to fight back on facebook ngt and the quality of people. i do a lot of work with facebook kroo all my portfolio companies. they are the best management company in social media. they are miles ahead of anybody else nobody is running out the door. >> incorrect >> this is a bunch of hype. >> last word, jason. >> people don't want to go work there now, you don't want to go to work -- especially liberal tech people don't want to go to work for a place that's involved in a conspiracy to put trump in. >> what does trump have to do with facebook? what are you going with that. >> a lot, a lot. >> what does trump have to do with facebook average lot. what happens was they took these
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profiles and targeted people in swing states with ads that were racist and sexist and anti-hillary. >> that's ridiculous. >> you can be sure that people here in california on the coast don't want to work for a company that they feel is going to swing the company in the divisive place. >> jason, you are saying people think facebook is right wing >> no, no, no it's not right wing they are all pro hill terry. they are all donating to hillary. >> the problem is what what does politics have to do with this is this. >> i'll tell you let me explain whchl you you go to a party in silicon valley and say i work at facebook everybody goes i'm sorry you work at facebook what a terrible place to work. people don't want to work for that company that's the truth. >> one point i think he makes well is you can compare facebook -- i know they are to the going to like this, to an al treea after the regulatory
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hammer came down on the cigarette space and look how well they did including under you had administrations which you would think would be unfriendly for them. >> thank you for making my point. who wants to work for a zbraet company? >> if facebook gets regulated the barriers to entry are so high there will be no competition. that would be the worst thing to do no one can afford the compliance and that will actually make facebook even a stronger company. >> yeah. all right. guys. >> in that case, kevin is right. they will make facebook stronger because there already no other options. in the short-term facebook is going to go down in the long term it's going to go up. >> guys thank you. took an interesting turn.kevin and jason helping us dig through the wreck of the day facebook down 10% one of the worst performers financials were second worst in terms of sectors whether there is more pain ahead or not that is coming up. about half a gallonre sendig of gasoline up in the air. that amounts to about
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welcome back the banks were also hard hit today. the financial sector down 7% this month one of its worst performances in a couple of years. joining us now the chairman of whalen global advisors let's start with what you think is happening near the last couple of sessions. >> these are large caps. that's what you focus on in the financial space. they are going to go down with everyone else. that's acceptingly what is happening here there are a variety of reasons why financials are overyou would have a they have had a great run for the past 18 months
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i think a little bit ahead of themselves earnings are are going to be good this quarter partly because of the tax bill. revenue, volumes no i think that's a dichotomy that investors are going to have to digest i think the bloom is off the rose in terms of expanding net interest margin. so the street is going to have to start thinking about that and then credit costs are rising i think they are going to double in the next 12 to 18 months. the numbers are still low but it becomes significant for earnings if that happens. >> chris, we actually didn't hear the very beginning of what you were talking about but i'm wondering about your thoughts -- because of a technical issue. your thoughts about this increase in libor in short-term overnight funding rates pour banks. we hear it's technical and mechanical issues but is it also weighing on the stocks a little bit? >> i think people have been watching that relationship for a while, i don't think it's related to a change in the benchmarks there is technical and macro
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economic reasons why the cost of funds in europe is higher than it is in new york. it is worry some because you don't like to see the spread get too wide it suggests that the europeans are having funding issues. this takes you back to 2008 when the u.s. had to fund the u.s. operations of all of the european banks and the fed had to extend themselves as well i think there is two different things going on here they are trying to create a new benchmark a new short-term indicator for labibor but the widening of the spread is a different issue. >> chris, i wonder who you tactically think is worth owning here no matter what kind of volatility we see. >> the exemlumbars in the industry are pricey. morgan closed at 1.6 times, boochl i think they are really fully valued and the you will smaer premium names are higher than that i personally would not be diving in here. inthe banks have got to adjust to what they are really going to do in terms of volumes
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we had the mortgage bankers talking about abysmal profitability in residential mortgages. that's going to affect the bank. all thing considered they still look good and they are overcapitaled. they would like to double their dividends because their equity returns are 30% below in a they were a decade ago. they are bigger and they have more capital so the equity returns are below where he were this that's probably a good thing because those days were extraordinary and you had a lot of cheating. we don't need to go back there there are no troubles in banks right now. they are run very well comerica was up 20 understand a 12 monday period they are going to give a little of that back. >> we'll see if they move on the dividends further. >> he can. they certainly can they are way i don't have capitalized. people don't like when i say that but that's the truth. >> they don't. chris whalen
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headlines. the news after hours isn't slowing down after the wild trading session we saw shares of lulumemon are higher after reporting earnings athletes you are also raising profit and revenue guidance. restoration hardware shares rising after beating wall street's estimates posting strong full year outlook nike surgy after hours after the nfl approved a long term he can tension of its apparel deal with the dow component. there. >> people are shopping but stock investors have other thing to worry about. i'll go back market wide to the metaphor of the concussion protocol i think we are back into it. you had three days in a row of 2% or more drop interrupted by a 2.5% gain. the market is did he havely unstable it doesn't mean it's vulnerable to the downside but it's not operating in a way where it seems to have things figured out.
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>> what was the swoosh thing they did for the broncos. >> a three point stance they made a swoosh. >> all together. the way they were bend of we will see if they come up with more clever tactics like that. thank you we will see you tomorrow and see how the market recovers overnight that does it for "closing bell." "fast money" starts now. >> "fast money" starts right now live from the nasdaq market site overlooking new york city's times square i'm melissa lee. traders on the panel today -- tim seymour david seaburg, david kelly and guy adami. tonight on fast, twitter is. >> at thatting after andrew less says it is about to suffer a worst fate than facebook could it be a chance the buy the stock? the traders weigh in general electric is having its best day in months we will tell what you had investors running to the stock first we start off with a selloff on the street. check out the nasdaq 100 mid day selling the off hard and taking the rest of the market along


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