tv Power Lunch CNBC May 23, 2019 2:00pm-3:00pm EDT
with china and japan, didn't really see a lot of other companies say, hey, let's start developing our own rare earth. still, china commands 90% of this market. >> we'll see if dhanchanges, sea modi, thank you. i'll join tyler for "power lunch" which begins right now. >> indeed, it does, kelly. we'll see you over here in just a moment or two. i'm tyler mathisen new at 2:00, stocks go south as investors look east markets being too optimistic about getting a trade deal done quickly with china so do investors need to reset or is that what we've been a part of the last few weeks? another area, trade tensions felt is in the oil market. crude tanking today down 12% in the last month how low might prices go? another worrying call on tesla and consumer reports, warning about auto pilot feature in the tesla and they will speak to us
first about it as "power lunch" begins right now let's bring you up to date on this sell-off on wall street right now. the dow and the s&p having their biggest drop since may 13th. that's not all that long ago about ten days or so dow falling 445 points at session lows and looking straight in the eyes of its fifth straight week of losses. i mentioned oil a moment ago and crude is down almost 6% right now. on the benchmark 10 year treasury, get this hitting lowest levels since back in december of 2017. there you see it 2.306. over to you, kelly. >> tooiyler, thanks bob pisani is tracking the money flow on the floor of the new york stock exchange. rick santelli in the bond picks in chicago brian with more on the big drop and steve liesman on the fed fallout. three things that chair powell
said were improving are getting a lot worse now. bob, let's start with you. >> the important thing, kelly, take a look at the s&p 500 the bulls keep telling me to calm down, we're only 5% from historic highs what's to worry? that's true but reality is setting in there is no trade talk scheduled here and may not be for a while. we don't know what's going on. it's not generally very good and the most widely passed around note on the street today from nomu nomura they said we think domestic pressures and constraints will drive both sides to escalation 55%. a fourth of tariffs, $300 billion. 25% will happen later, after the t-20 summit meeting and we've talked about the damage, already done, look at this for the month here intel. and everything is down double digits in the trade-related names and everybody keeps messaging me saying, all the names up, pfizer, and it's global growth coming down because of the trade wars and this is a permanent part of the
landscape for 2019 forget it. these stocks are coming down because they have global exposure as well and don't import from china, doesn't mean they're not going to be the next potential shoe that could drop kelly, back to you >> i'll pick it up there, bob. thank you. the bond pick in chicago hi, rick >> reporter: hi, tyler they're fleeing everything that is equities, moving in a lot of u.s. treasuries, but a lot look at a two day chart of 10 year note yield haven't settled at that level since october of 2017. let's look at june 1st, 2017 in the uk hasn't been there, obviously, since june of '17 with regard to the yield. pattern very similar and they haven't been at these levels since september '16, although, july of '16 is when they made the lowest yield close
of minus 19 basis points and there's been a lot of talk on the dollar index and it is but the chart, you'll see it make a big u-turn off the fresh high but we're hovering in the zone we haven't seen since may of 2017 and that chart on the dollar index, even though we've had the setback, most likely fed related. kelly, back to you. >> thanks and oil is also plunging today crude hitting the lowest level in a couple of weeks maybe to march prices. down 13% in the loast month. what's taking oil down >> doesn't make much sense venezuela, the libya in the middle of what's a civil war, if not the beginning of a civil war. all the rattling with iran
mysterious injuries but here's the beautiful thing about oil. it's a perfect commodity the marginal extra barrel has zero value and opec, non-opec sources. united states and russia 1.6 million barrels today more than last year and opec's own demand forecast calling for a slight drop year over year, production up, demand down that's a big gap and that's why oil is not responding to these geopolitical things. in fact, falling >> supply and demand >> i'm simplifying because oil needs to be in the right place in the right location. if we think iran, as we talked about in the exchange, that's a technical term for crazy and not going to hear about it directly >> all right thanks so much
good to see you. trade, brexit, global growth three things fed chair powell said were doing better during the last news conference but all three of those things getting worse since then steve liesman here to take those numbers apart for us. >> early may fed chairman jerome powell better about the challenge to the u.s. economy was fatesing. >> concerns remain in all of the these areas. fast forward to earlier this week, powell talking about just the one issue, trade >> the outcome of the trade negotiations, highly uncertain premature if you try to make that and we'll just have to see how it plays out >> most of what powell was more sanguine about, less than three weeks later. trouble ahead and behind brexit flared up again risk could see the government topple. stress to europe looks worse
than it did after the brief improvement and exploded the trade war into key sectors of the economy and overall inflation and growth and not to mention new concern about iran out there and whether democrats or republicans get together to get the government open. the result and i just did one of the eyebrow raising looks at the feds funds futures have to be one of the highest we've had. for september, a rate cut. 66% for october. so some is automatic yields fall in the bond market there's a sympathetic move in the fed but also increasing that everything we're talking about now, this downdraft in stocks. the effect of tariffs throughout the economy will weaken growth and prompt the fed to cut. >> thank you very much a sea of red out there today with more than half the companies in the s&p in
correction territory with the 10% drop from the recent highs and 30% of those stocks down 20% or more. have markets been too optimistic about a china trade deal done and done quickly do investors need a reset and is that what's happening here liz ann saunders, chief strategist and senior vp with charles schwab and guidestone capital management we've swung from everybody saying there's going to be a deal, there's going to be a deal, to more and more throwing in the towel have we swung too far other way? >> anybody saying thdeal, they that was pure speculation. to the extent that was the only basis for the rally we got off the christmas eve low, you could argue it's gone a little bit too far. i think you had other reasons behind the rally, not least being unbelievably washed out sediment with the conditions in the early stages of the rally but clearly now, at a point where we're at the mercy of every tweet and propaganda video and i think the more important
part is that there's more meat on the bones right now last fall, it was more esoteric. some companies talking about the effects. and now we're seeing companies actually talk about the direct impact walmart cfo last week saying we're going to pass these prices on to the consumer major reports saying americans are bearing the brunt of this. one by goldman sachs as well it's a bit more concrete than it's been in the past, hence the volatility >> the sector, david, rotation is interesting now with the year, we have real estate and into second place and the nasdaq, the worst performer and we're talking, seeing more and more articles about a kind of tech cold war with china. what are investors to do here? should they follow these new trends that are playing out? >> i think it's important to take some off the table to look for defense at this point. liz ann pointed out some of the things that drove the market year-to-date one of the things i think has been overlooked is a decline in
earnings growth expectations and that's continuing and get even more pronounced if the trade deal doesn't get done and in that case, i don't know what we're going to look to to drive stocks higher. preemptive rate cut or the cut in december going to drive stocks higher? by that point, it may be too late and investors need to be looking at sectors like health care i'm not a big fan of utilities and consumer staple but had the highest revenue growth of all the sectors out of the first quarter earnings report and valuation very cheap, up 4% year-to-date so let's look at some opportunities there. >> liz ann, in the past six months, i can think of two very glaring instances where if you had gone along with the consensus, you'd have been real wrong and i think that's one of the lessons that keeps hitting me, at least, over the head. that when investors follow the consensus, whether it's on trade or whether it's on the idea that interest rates go up this year, the economy will slow this year, if you do that, and put your
money behind that consensus, often, it's a risk. >> the consensus comes as a result of the market moving in one direction and you get the follow on and the performance chasing and that's typical i don't think there's anything terribly unique about that environment but on trade back to the initial point, i found it odd that the consensus built around a deal being imminent it was purely speculating by the motives on both sides and what we know now more than a couple of months ago, the duration of the game being played by the chinese side versus the u.s. side, it's very different and i think the china side is reinforcing that this is a very long game for them and the fact that there are no meetings set up right now, we're not getting some of the more positive rhetoric is an excuse for a market i would agree with david. i think we're running into some real hurdles from an earnings perspective. you really lost the macro conditions that supported multiple expansions in the early part of the rally and now, we
want to see some decent earnings growth and i think the tariffs story is actually a dampening effect on that not going to help. >> the final question to you, we've now swung all the way to the other side here and the consensus is that there's no deal and everyone is getting defensive, then you've got yourself exposed to the risk that all of the sudden, any tweet, any meeting, any positive commentary, pushes us the other way and everyone caught left footed or wrong-footed. >> i would argue that the consensus is not that there's no deal i think there's a lot of optimism that a deal gets done in fact, the market really hasn't moved that much i mean, we're not used to seeing red on the screen this year so it's a little bit jarring. i think the consensus is still a deal gets done and the fed is going to cut rates and swoop in to save us like they have for the past ten years and i think there needs to be more pain felt more volatility. i think there needs to be more pricing in of these negative head winds where that earnings or the trade deal or whatever the case may be, before we get to the point where it makes
sense to load back up on stocks. >> all right good stuff thank you. liz ann saunders, appreciate it. coming up, shares of best buy caught in the downdraft even after reporting better than expected profits, a big run so far this year, as you see. up 23% more upside possible not happening today. and we're all over the big sell-off the s&p 500 is down. you can see energy, one of the big reasons why. so is technology and industrials also among the worst performing sectors "power lunch" will be right back 401(k)? where do i start? empower yourself with the free tools and resources on investor.gov. before you invest, investor.gov.
you never know what life is going[ whimpering ]ou. and from this point on nothing is going to be the same. raising a kid it's not easy. no, no, no. this way buddy. come on. no! gidget could you watch liam? it's like we're his parents. it's like you're the dad and i'm the mom and we're in a relationship. and this is our baby. [ laughing ] well... it's exactly like that! exactly! be the first to discover the secrets. at the fandango early access showing may 25th.
shares of best buy have tumbled today despite an earnings beat. best buy holding off on raising its full year forecast because of potential impact from u.s. tariffs on $200 billion worth of chinese imports. ceo, outgoing ceo, paint add bloomy picture on the conference call saying that the tariffs will result in price increases and will be felt by u.s. consumers. anthony chicumba a price target of 95 on the stock. good to have you with us >> thanks for having me. >> i guess on any other day, this would have been a nice day.
and not by a little bit and a lot. >> that's correct. these are great numbers from my perspective and up 1.1%. that's despite the fact that u.s. tax refunds down 2.4% and generally, were delayed. operating markets up 50 basis points year over year and up 24% to $1 and that was 15 cents ahead like you said. so these were really good numbers. very strong start to 2019 for best buy. >> of course, investors are always looking forward and as the ceo said or warned, the idea that the tariffs will take a bite is very real, the company did not boost its outlook in any way for the remainder of the year >> you have to remember though, i mean, best buy is a company that's a long history of underpromising and overdelivering so they would much rather tamp down expectations for the rest of the year, particularly, given the fact there is an uncertainty
around tariffs and can change by the tweet, as we all know. when i think about the remainder of the year. the year over year comparisons get easier as the year goes on and the other things they have to do is they have this new progressive rent to own solution and i think that's going to be great for best buy in terms of driving and particularly the holiday selling season i think this is just another case of management being conservative. >> anthony, people do have this figure in their heads that best buy gets two-thirds of their products from china. is that true, as far as you can tell and wouldn't they be exposed to the trade war getting worse? >> i hate to use the term but it's fake news right now, 7% of best buy's cost of goods sold are subject to the current tariffs. going up from 10% to 25%
there's no way it will jump. that's fake news. >> they could have that much product sourced and just trying to mitigate the impact, right? >> certainly, no question about it part of it is suppliers and the selected price increases and part of it is looking for other cost-saving opportunities but really great at doing. so yeah, i mean, i really believe that today's sell-off is overdone i mean, i think almost baking in a worst-case scenario for best buy and i just don't really see any good reason to be that pessimistic right now. >> your price target again, 90 >> $90. >> all right, anthony, thanks very much. coming up on today's tasting menu, how big could the meatless craze get? where do you eat dinner? head to charitable champion. why david alts mso may be closi his fund and the markets still
off more than 400 points down 444 at theow ls today. ibm, united technologies the worst performers intel has just turned green. creating the perfect night... just takes a little creativity. the light beer you've been waiting for has arrived. lower carbs. lower calories. higher expectations. corona premier.
welcome back to "power lunch," everybody. big down day for stocks but there is one place you can find safety in the sell-off. diana olick is looking at real estate stocks. hi, di. >> reporter: yes, reaps the sector and overtook best year-to-date sector up of a low interest rate play up over 17% year-to-date last week, rose 9% when trade talks broke down with china and a safe haven relative to the market the fundamentals of reit is pretty strong. $15.9 billion in the first quarter of this year and occupancies are at 93.8%, just off the record high of 94.1% in the third quarter of last year top reit performers, single family rental reits, home, industrial and office. >> great stuff thanks teper may turn his fund into
a family office. leslie picker with that. >> david tepper with his hedge fund about converting to a family office, according to a source with knowledge of the matter timeline with converting into a family office not yet been established. said, in other words, it could be imminent or it could be years from now we weren't able to determine the exact reason for the move. have converted to family offices in recent years, lamenting the difficulty generating alpha in this current market environment but performance doesn't appear to be the driver for tepper. generated 25% annualized returns since inception 26 years ago unable to outperform the market. own represents 70% of the $13 billion management and typically
returns a portion to investors to manage the size of his aum to maximize returns it would be surprising to see the convergence to the family office >> leslie, thank you big sell-off on wall street this hour. now, here's a taste of some of the other stories we're watching today. alternative meat will be a $140 billion market in a decade the pace of rapid growth with the animal free industry could capture 10% of overall 1.4 global meat market rallying in today's sell-off. >> daily beyond meat check. >> up 220% since the ipo, you know, thee weeks ago there is clearly a market for alternative meat i like that phrase >> alt meat. >> alt/meat. the dinner table may be going away with the dodo bird. 30% of americans, this is the
sign of the decline of american civilization 30% of americans say their couch is the primary place where they eat. 17% say they take meals to the bedroom. interestingly, while 72% grew up eating at the dinner table, only 48% do so today. >> you don't even have a dinner table. >> right now, the dinner table is, we're doing a kitchen reno the dinner table is quite a mess, but i really do believe that it is critical for families to have dinner together around a table and put the devices away >> good luck with that >> good luck with that. >> until people are eating in the bathroom, i'm not overly concerned. >> dinner to the bedroom oh, man. meanwhile, hot streak continues. his 25th win last night is also his 25th in a row, obviously it brings the prize money to just under $2 million. he started to do some good with
that money by donating tens of thousands of dollars the several charities in hometown of las vegas. ken jennings with 74 consecutive wins but earned $2.2 million in that time. they finally got over the teacher's tournament the last couple of weeks. i love the teachers, but glad he's back. this is only his third night >> what did i hear you say third of the way to jennings win total? >> did 2.5 just under 2 he might cross it tonight. >> i see but in terms of the number of consecutive wins >> only a third in total appearances. >> very good gambler he plays the daily double. >> very well >> very, very well even money bet i'm sure our producer paul could explain that, but it's actually a good bet because you usually get 70% of the daily doubles right. >> he gets credit but the way he
knows word games is astonishing and that's what lets him get the daily doubles in the first place. more on your abc station tonight. ahead on "power lunch" -- growing trade tensions. we'll tell you what global investors need to know dow down 406 points and tesla's auto pilot raising serious safety concerns. the expert behind that will join us live and as we continue to monitor the sell-off, we're down 444 at the lows. we'll get the trader's take when "power lunch" returns. i'm working to keep the fire going for another 150 years.
welcome back, everyone i'm sue herera here's your cnbc news update at this hour. acting homeland security secretary kevin mcaleenan testifying before the senate homeland security committee this morning to request funds for his agency >> to address the border security, the funding of approximately 200 miles of the new border wall system, a deterrent requested by front line agents and calls for 750 border patrol agents, 273 officers and over 660 ice front lines and support personnel. >> judge ordered a file in the
jussie smollett criminal case unsealed he ruled the "empire" actor forfeited his rights to keep the case sealed by talking to the media before and after prosecutors dismissed the charges against him. a new commonwealth report shows roughly 24 million people are spending a large amount of their annual income on their overall health care. over 13 million spent at least 10% on premiums alone while another 6 million spent that much on out of pocket costs and all of them had health insurance through their employers. you are up to date that's the news update this hour back to you. >> sue, thank you very much. about 90 minutes to the closing bell let's take a check on the sell-off this hour if you're brave enough send your children to the other room dow is down 420 points about 1 2/3 percent but the big loser right now, down more than 2% or
155 almost and oil is closing for the day. crude sinking 6% today alone on pace for its worst week, kelly, in six months. >> ouch. and india reelecting prime minister mody, seen as pro business but certain could benefit more than others during his five year term seem seem is lo seema mody is here to look at it. >> the hope is a strong to give modi to expand reforms indian stocks with a record high on news of modi winning but up 3% for the week outperforming china and the broader emerging market david cornell, cio of two india funds betting that india will become a better term amid u.s./china trade tensions rising two sectors that stand to benefit? the u.s. energy frusers as india
continues to buy more lng from the u.s. and tripled the amount from the u.s. in 2018 versus 2017 and sees the deepening defense ties with the u.s. as china increases its assertiveness across asia and has the neighbor, pakistan, you know how they celebrated india? conducting a missile test. kind of like, this yere you go we're ready. defense bigger budget under modi and more purchases from the u.s. defense contractors. we'll see. >> absolutely. >> why is he so polarizing in india? >> even though he markets himself as pro-business, a lot of his policies have been controversial and ultimately, bad for business case in point, demonetization.
>> apple issues with the iphone there. >> tariffs increased, risen under his leadership he talks about being pro business but things like demontization, a lot of progress needs to be made if you want it to be a destination. >> cseema, thank you not just india that global investors need to watch right now. major elections coming up in the european union, i believe it's this weekend and then growing trade tensions between the u.s. and china, maybe even some in the u.s. and europe. emerging markets, the eem. trading in correction territory and pushing closer to a bear market jim paulsen. david, the world seems like a scary place right now with all of the tension and trade in the
middle east. >> there are tensions around the world and investors do need to be aware of them but i think you can still pick winners around the world. southeast asia and then indonesia a five year term sets stage for stability and growth there. good opportunities in india after the new mandate and definitely buying latin america. a new replacement for some food and products that china will still need during the trade war as well as replacing some of the tremendous part of the pork industry in china that's been devastated by the african swine flu. it's a dangerous time but you can navigate it with careful selections around the world. with respect to what you just said, latin america will take the place of american farmers whose pork and other agricultural products are going to be too expensive in china
>> meat products are ready to step in and replace some of the exports that won't be leaving the u.s. >> a lot of production moved to thailand and i wonder if mexico can emerge as a winner here. >> i think there will be winners. i agree with that, kelly i think it's important to remember the times of tension, times of unrest are also, not all the time but a lot of the times, they are the greatest opportunities to buy it's put on sale and the biggest among them, i agree with david, a lot of the international markets, including much of the emerging markets. and here in the united states, i think the look to pick away at
some of the areas on the more cyclical side of the universe. and not because we blew out a balance sheet with major repair before we can get back on track. it can be very quickly reversed. and it's more about fear as we see today, than attacking fundamentals wait for the good stuff against the bad. because of the crisis, a lot of policy support being brought to the party and greater fiscal stimulus here, i bet that's ultimately going to win and if you can give yourself more than a couple months here to perform, think about where you want to be a year from now, i think you want to take advantage of this. >> i think it was churchill who said never let a good crisis go to waste and maybe that is one
of the watch words for that. you've got a weakening chinese currency on the other. how do those two counteract one another and which one, ultimately, could be more important for the global economy? the weakening currency, which makes those chinese products cheaper, or the rising tariffs >> i think the weakening currency, certainly. the tariffs are a tax on american consumers and much more burdensome on the u.s. side. china has many other markets they're turning to $3 trillion of foreign reserves, a 20 year or 50 year view, not an 18 month or 4 year cycle view so very compliant citizenry willing to go along with some pain so i think china will go to markets in africa, south asia and around the world as the u.s.
consumer is hit by these increased taxes in the form of tariffs and i think it's the yuan with the bigger impact in the immediate and longer term. >> good to see you both. shares of tesla down more than 40% this year on concerns about cash burn and production target a much more base worry hitting the company too. the quality of the car it can't recommend a single tesla model. the editor who compares the navigate feature to a nearsighted first time driver. stay with us
tesla has been down 11 of the last 13 days and lost half of its value since last august. the latest firm to weigh in on tesla's woes the electric car maker probably won't meet delivery target for the year in the meantime, consumer reports raising concerns about a key feature of tesla's autopilot. the latest version of the navigate system allows the driver to change lanes automatically, but consumer reports says that feature is far less competent than a human driver, adding, it's like a first-time driver being nearsighted. jake fisher is senior director of auto testing at "consumer reports. welcome. >> thank you >> we've seen a dramatic change from giving that model s a perfect 100 score to now not recommending any, does the navigate feature play into that? >> well, overall, the issue with a lot of the tesla models is they perform very well and are testing the impressive vehicles. the problem is reliability
and those quality issues we see and that's not our testing but survey so we have thousands of owners telling us the problems with their vehicles and makes us unable to really recommend them, considering those problems the latest issue in terms of the autopilot, that's a different animal so, you know, it's interesting i've been testing cars for 20 years with consumer reports and nothing like tesla because they are constantly changing. can't just test it once and wait the latest update is this change on navigate on autopilot so autopilot is this driving automation system. navigate on autopilot actually suggests changes in lane changes and can execute them too if you accept them. the latest change, is they've actually beamed an update to these vehicles so it can, depending on your settings, i don't want to confirm the changes, it will just change lanes for you. without having you confirm them.
our testing of it, it was a big concern, the way it operated >> dangerous, concerning >> well, i mean, like i said before, it's almost like you've got a pilot there. you've got someone who's driving the car that is a first-time who really can't see very far. sometimes, it will just cut cars off. it doesn't really, it doesn't seem able to sense the car coming up behind you sometimes, if it tries to pull over, it starts slowing down slow on the highway. so it's not a situation that really helps you drive because it's actually more nerve-racking if you operate it this way and it certainly is not safer. >> jake, is it also, there's the navigate issues and also, the issues like you said about reliability on the cars overall. has that gotten worse as they've ramped up production so that more vehicles tesla is making, more of the factors come up? >> it's actually interesting the tesla model 3, early on, we
had reliability information that looks quite good pretty much average for the mark market when they started really ramping up production, that's when we actually did see more problems, more body hardware issues. it was the glass breaking, the doors, hinges. interior, plastics more issues there, yeah. >> finally, jake, if your concerns about navigate are that strong, is there another level of the consumer reports in terms of recommending people stay away from it or something like that how far down that line have you gone >> specifically, the settings. when you, we would not recommend anyone shutting off the confirmation or shutting off the settings for the lane change it doesn't really make sense we did this to test it, but i would definitely not do this it's very nerve-wracking experience the concern though, it really kind of shows how far we are from a truly autonomous robotaxi
type of environment because we're so not ready and this feature really shows that. >> all right, jake, thanks jake fisher from consumer reports. we reached out to tesla for comment and drivers using the optional setting successfully have driven millions of miles and executed millions of automated lane changes regularly say they appreciate the feature and find it fits their driving. the shares are slightly higher today. tech stocks today, apple, microsoft having the biggest impact there amazon trading below its 50 day moving average much more on today's tech wreck when "power lunch" continues from managing inventory... to detecting and preventing threats... to scaling up your production. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.
let's always put investors' needs above our own. as investment management professionals, let's measure up. cfa institute. dear tech, let's talk. we have a pretty good relationship. you've done a lot of good for the world. but i feel like you have the potential to do so much more. can we build ai without bias? how do we bake security into everything we do? we need tech that helps people understand each other. that understands my business. we've got some work to do. and we need your help. we need your support. let's expect more from technology.
just over an hour until the closing bell stocks hitting session lows just moments ago. let's get traders' take on the sell-off on the floor of the new york stock exchange matt cheslock of virtue financial. also tim anderson from pjm investments. matt, what do you see going on here is it fair or uncertainty or both what >> it's a little bit of both but we're just not really seeing anyone step up to buy anything right now. there's no real reason to. with all the uncertainty that's
going on it's clearly better to wait and see what happens down the line really there's more safe haven play going on right now. gold a little bit of a rally bonds are rallying utilities are strong really everyone's kind of getting defensive right now and just moving their portfolio around, going into a long weekend on top of it >> no reason to buy, tim, says matt do you agree, number one, and do you expect that condition may persist for a matter of not just weeks but maybe months >> well, i certainly think that in the next week the market's going to be very uneasy. not only do we have a lot of uncertainty over not just the outcome of trade talks with china but the timetable for those talks to take place. and then i think we also have that spreading into other areas of the market with some issues some big sell-off in some big tech names today qualcomm's giving back a big
chunk of its gains post the apple settlement the oil stocks are getting hit west texas went through 630 on the dow very easily. oil service names down about 7%. you get tech and oil service both having large declines, it's just hard for the market to stabilize. >> what are you guys going to be watching into the close, matt? >> i'm going to watch to see if we can get any kind of rally at all. we're trending toward the lows here at the end of the day as i moengsed, we're going into a long weekend people are just bailing out right now. so if we can't firm up here, this market could move a little bit lower. you know, we've got a big volume day on tuesday in the small caps sector there's a lot of portfolio adjustments that may occur going into that. we need to find some kind of stability. >> tim, same question. what are you going to be watching >> i'm certainly going to be watching the 2800 level on the s&p 500 because that was a level that we held on an intraday basis about ten days ago and that right now is clearly the near-term support level. a lot of people are going to be
looking at >> what about the well, the na got to deal withs issue that a lot of high-profile nasdaq names are going to have a hard time sorting out their supply business that they used to do with huawei, which is a huge global company and now a lot of that seems to be interrupted clearly, the semiconductor stocks got hit hard on that earlier in the week. and we're seeing that spread over into some of thear other names right now. >> gentlemen, thank you very much matt, always good to see you tim, you as well appreciate it. coming up, we'll have much more on this market and a sensational softball play you have to see before we go today we'll be right back. yes it is. you know, maybe you'd worry less if you got geico to help with your homeowners insurance. i didn't know geico could helps with homeowners insurance. yep, they've been doing it for years.
it's the last inning two runners on the pitcher receives the ball from the catcher fakes the throw to second. wait for it. fakes the throw to second and pretends like it went past -- in the outfield but it didn't. there's the pitcher. she tags the runner out on that fake play. the pitcher had never thrown the ball >> she faked it to second. >> see how the other woman dives in the outfield. >> and tags the runner out
oh, boy. >> you needed some levity. restaurant stocks are heading lower back to what you do most and best maybe trade tensions and other issues are weighing on those names and kate rogers is following the story for us >> the restaurant stocks are taking a leg lower today with the broader market mcdonald's, starbucks and yum china, those are the three names that analysts are continued to watch as these trade tensions unfold as those companies have the largest exposure in china. starbucks, remember, also owns its locations meaning it would feel a more immediate impact if consumer sentiment were to shift there. chipotle's another mean that's down today, 5% on a downgrade from bmo this morning over concerns about swine fever and pork inflation now, chipotle told cnbc that pork represents less than 2% of its total food costs and because the company purchases higher quality and more expensive pork than commodity pork it has price agreements in place and does not expect a significant impact on
costs. interestingly enough, wing stop. >> they're 99 china. >> they are doing a lot of international. but not one of those big names that -- >> was it on your earlier program where someone was saying that american companies may be boycotted by chinese consumers >> interesting stuff in the past whether it's been boycotting the philippines and their banana imports over a south china trade dispute. in japan when it came to the rare earth metals last time around, even japanese cars korea, they stopped sending chinese tourists to korean markets. we talk about how much -- there's not a lot of imports they can slap tariffs on in china on us. there's a lot of other ways -- >> those are company owned locations. they can off-load some of those. if sentiment were to change they're collecting royalties they've been there 20 years.
we've talked about it a ton on your show. they truly have an understanding of that culture and they don't seem scared about any of this just yet >> kate, thank you very much why don't we take a quick check of the markets as we head into the final hour of trade. the dow industrials a bit off the lows but not very much 424 points lower thanks for watching "power lunch," everyone >> "closing bell" starts right now. >> welcome to "closing bell. i'm sara eisen >> and i'm wilfred frotd we've got 59 minutes left of the trading day. we'll tell you everything you need to know before the market closes on this wild down day >> here's what's driving the action today china trade rhetoric is heating up, especially in the chinese media where the global editor says the u.s. is becoming a fachist country. more chip companies cutting ties with huawei. and the