Transcripts For CNBC Power Lunch 20150928

Lets take a look at the numbers there for you. The dow is currently off by 266 points. The s p is down by 41 and the nasdaq, look at that, a 2. 6 drop, 125 points being shed off the nasdaq. All three are now in correction territory. Lets get more on the trading action on the floor of the stock exchange. Its a pretty ugly day, it really feels like the market is having a lot of difficulty finding its footing. A number of different factors at work. You had the weaker close over in europe. You also had the disappointing Industrial Production or industrial profit numbers out of china today. Add to that the weakness, the continued weakness in the commodity space. Oil is down. Hasnt broken through that 44 level but youre also seeing weakness in zinc and copper, et cetera, and gold today. All of that is keeping pressure on the markets. The s p also breaking below that 1900 level. People were watching that. Right now were watching the russell as well below that 1100 number as well. One of the reasons weve seen weakness is the pullback in biotechs. Those are the sectors under pressure. Health care, materials, energy, all under pressure in todays session. Again, reflective of the concerns were seeing about biotech, the concerns about the commodity space. The russell breaking below the 1100 mark. Investors were watching that. Now trading at 1094. One of the reasons, i know bertha will have more on this later about the biotechs weakness there. We want to highlight Valeant Pharmaceuticals. House democrats subpoenaing Valeant Pharma over prices so its stock reflecting that, off 9. 5 . A quick check of the impact stocks in the s p 500. Freeportmcmoran down another 11 , almost 12 today on the heels of more disappointing concerns or i should say more concerns about glen core and the Mining Sector and then some of the biotech stocks there as well. The dow off 256 points but its another tough day. Its another very tough day. If were talking levels, were al 1890 on the sbx, broken below the 1900 day. Intraday flash crash is 1870. In the meantime, lets head uptown to the nasdaq where bertha coombs, weve seen a fiveday losing streak. And the numbers dont look better. Were getting a triple digit losses. Its on pace to break a tenquarter winning streak. Take a look today. Were down 124 points at the moment. The nasdaq large caps are off 1. 5 , but its really all about the small caps. Well, really for the nasdaq, having its worst decline since the September Quarter of 2011. Two big factors, one of them is apple. Apples slide of more than 9. 5 of the quarter breaking a fivequarter win streak despite reporting record sales over the weekend, no gains for the tech giant. More than apple it is biotechs that have paid the deciding factor in dragging down the quarter. The ibb down 10 for the quarter after 20 straight quarters or 10 straight quarters of gains. The index is on pace for its worst quarterly performance since 2002 with only 2 out of 145 components not in correction. Mandy . Okay. Thank you very much, bertha coombs. Ill going to hand it back to you, brian. We all know commodities have gotten crushed and were starting toee more movement in many of these commodities. Gold is actually down. Gold not really getting a bid at all. Down 12 an ounce to 1,133. Well have the gold close at the bottom of the hour. Oil also sliding as well. Wti crude is down about 1 a barrel, 2. 4 . Weve got Jackie Deangelis at the nymex for more on oils continued slide. Good afternoon to you. Thats right. We are seeing not only the metals complex and the Energy Complex down today to kick off the week and the main issue here when it comes to commodities traders is really the fed. I know there are other factors impacting equities today but what concerns them the most is the fact that yellen last week, dudley today saying that it is possible we could get that rate hike this year. They really had discounted that factor. And its not just how it impacts the dollar. It could strengthen the dollar and impact commodities to the south side, but at the same time this overall theme of tight b n beenibeetightening could impact. The Energy Complex down across the board with the exception of nat gas which trades differently than oil, but wti is seeing a 2 slide. Were staying under that 45 mark which is a key psychological level but were staying close to it. It shows you commodities dont really know necessarily which direction they want to go in. They want to see more market movements. They want to hear more before they figure it out. Thats why were staying close to this flat line. Gold, as you said, more than 10 slide. Thats fedbased too. Copper, too, fears over china. Thank you. Lets stay in the commodities space. Alcoa shares are higher on this down day because the worlds biggest aluminum maker says it will split in two separate companies. Morgan brennan here with what that split means. Morgan . Alcoa announcing its going to split into two separately traded companies that closes in the second half of 2016. Clau Klaus Kleinfeld saying this is the culmination from an aluminum producer to a finished products manufacturer. It allows us to build those two businesses into the right size, the right strength, and the right scale. So this allows us to put both businesses on their own path. Here is what the two companies will entake. The upstream company will keep the alcoa name. The largest bauxite mining. Casting houses and Significant Energy assets. The Second Company will be the valueadd businesses. Name still to be decided. This will include midstream and down stream products, engineered products and solution, transportation and construction solutions. Basically all of alcoas manufactured products for aerospace. Valueadd will be investment grade. Alcoa expects aluminum demand to double this decade. Forecasts 9 growth in aerospace through 2017. If you look at shares of alcoa, theyre up almost 3 right now. The belief here that this portfolio being split into two companies will see better value and investors seem to be agreeing today with shares up. Back over to you, brian. Morgan, thank you very much. Lets get a market flash with seema mody. Brian, well, shares of chipmaker atmel after an offer to acquire atmel was submitted but its expired. Cyprus was preparing to bid atmel and disrupting its deal to be acquired. Atmel shares up nearly a quarter of a percent. Brian . Thank you. Believe it or not, there is some good news. It is outside the world of commodities and oil and it comes courtesy of apple. Apple saying it had record sales over the weekend of its new iphone models. Josh lipton in new york with all the apple numbers. Josh . Well, brian, im at the iab mix conference in new york but the big news, youre right, in tech coming from apple today with the tech giant saying it sold more than 13 million of the new iphone 6s and 6s plus models over the weekend. And that was a record. Now, a big reason for that, brian, remember, this year china was included in the launch. Last year it was not. Analysts estimate apple sold some 2 million of those new iphones in china over the weekend and that helped boost those numbers. Then the next date to circle on your calendar will be october 9th when apple says the new iphones will be available in 40 more countries, including italy, mexico, and russia. Take a look at apple stock today. Down in todays trade. Fbrs dan ives says there are still skeptics who wonder if apple can grow iphone units in the quarters ahead. Skeptics, of course, point to the tough comps given those impressive numbers we saw from apple last year. Bulls though will point to that last Earnings Call where apple executives said only about 30 of iphone users had moved to new models. That suggests potentially a lot of people still waiting to upgrade. Guys, back to you. All right, josh. Thank you very much. Lets get to eamon javers with breaking news out of washington. Eamon . Hi, brian. Shares of Valeant Pharmaceuticals have been moving just recently in the past couple minutes here on news that House Democrats have sent a letter to the chairman of the House Oversight committee, congressman jason chaffetz, asking chaffetz to intervene in a dispute the democrats are having with Valeant Pharmaceuticals over val kaents decision to raise prices on a couple drugs it purchased. Democrats clearly here now hoping to capitalize on the publicity surrounding this Hedge Fund Manager last week who was in the spotlight for raising prices on a particular drug last week, a lot of bat pr. Democrats hoping to capitalize on that Public Relations could you please from last week with their focus on Valeant Pharmaceuticals. The important thing to know, the democrats and the house of representatives dont have subpoena power. They cant issue a subpoena themselves. They can only request mr. Chaffetz, the republican chairman of that committee, do so. Chaffetz has been uninterested in joining this campaign by democrats so far. He declined to get involved when they asked him earlier this month and in august to be involved. Theres some question now about whether he would be interested in following up on this suggestion by democrats today. I was just on the phone with chaffetzs offices, they say theyll get me an answer as soon as they can. You cant take this as a guarantee that a subpoena will be going out to Valeant Pharmaceuticals at this point. Thank you very much. Coming up on the show, our countdown to a possible Government Shutdown continues. Were going to be speaking with a key player on the hill involved in those negotiations. Also, as you can see here in the markets, we have another big selloff on our hands. Stocks are on track to finish their worst quarter in years. We are off the absolute lows of the day on the dow. Were currently down by 240 points. Thats a 1. 5 drop. As we head out, here is a look at some of the most widely held stocks. Youre watching power lunch. Im mandy drury with brian sullivan. Im here at the nyse. Well be back. Day to feel aliv jake reese, day to feel alive jake reese, day to feel alive great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Comcast business. Im a gas service my nrepresentative. N. Ive been with pg e nine years. As an employee of pg e you always put your best foot forward to provide reliable and safe service and be able to help the community. We always have the safety of our customers and the community in mind. My family is in oakland, my wifes family is in oakland so this is home to us. Being able to work in the community that i grew up in, customers feel like friends, neighbors and it makes it a little bit more special. Together, were building a better california. Welcome back to power lunch. Im mandy drury at the new york stock exchange. Citigroup shares being raised. It is down 2. 5 in a generally down market. Nex star offering to buy media general potentially disrupting the recent bid for the meredith corp. And Energy Transfer equity buying the Williams Companies for 32 billion creating one of the five Biggest Energy companies in the world. As you can see, weve got some very steep declines for both of those companies. 11 to the downside for Energy Transfer equity. Brian, over to you. Thank you. The countdown to a possible Government Shutdown continues. T minus two days unless Congress Passes a new budget. Who and what will be impacted if this happens. Eamon javers back with us. This is what we call a fluid situation here in washington, d. C. Obviously the bombshell news from friday that House Speaker john boehner is going to resign at the end of this month throws all of the political calculations out the window here. Now the betting is that we are not likely to see a Government Shutdown this week because boehner will now be politically free to make a deal with democrats in order to keep the government open. They expect the play as of this point right now is we expect to see the Senate Voting on whats called a clean continuing resolution as early as this evening and into tomorrow. Procedural vote starting today and then democrats helping republicans pass that on the house floor. So the expectation is no shutdown, but a whole lot of frustration among house republicans. Here is john boehner on cbs face the nation. Are they unrealistic about what can be done in government . Thats absolutely theyre unrealistic. But, you know, the bible says beware of false prophets. There are people out there, you know, spreading noise about how much can get done. This whole idea were going to shut down the government to get rid of obamacare in 2013, this plan never had a chance. So now, guys, remember the key here is that this current continuing resolution only funds the government through december. The question is what happens in a boehnerless republican conferen conference. Who will be the speaker and what kind of deal making will that person be in the mood for. Joining us on this topic from washington is congressman Scott Garrett a republican from new jersey. He is a Founding Member of the freedom caucus. Congressman, its good to see you again. Do you believe we will avert a Government Shutdown . I think we will. Weve averted them every other time. Sooner or later the final bill passes and the government is opened up either on time or a few days late and the speaker obviouy is now free to speak his mind more candidly apparently than he was able to before and it looks as though there is a plan in place for them to, as they put it, reach a deal with the president and the democrats will simply continue spending at the current levels without any adjustments whatsoever on anything. And any comments on John Boehners comments . Well, i think its incumbent upon all of us to try to do what we can in order to make our serve our constituents to make sure that were passing a budget that reflects the will of the people and we passed, you know, during this past year the appropriation bills item by item by item. We sent them all to the senate which is the normal regular way you do things down here, and as you know, they died in the senate. You have to ask the question why did they die . They died because harry reid said were not going to move anything all year long until the very end, and thats once again the democrats in the senate unfortunately pushes us into this untenable position that were in that the rest of the economy and our constituents dont want to always find ourselves in. Outside of the economy, congressman, do you support Kevin Mccarthy for House Speaker . So someone sent out a letter just the other day and i saw it earlier today where theyre saying probably the best thing to do is to take a step back, take a pause, take a breath, if you will, and to do some introspection here. Find out why it is twothirds or threequarters of the american public, you might say our constituents who are concerned about these issues, why do they say theyre dissatisfied with washington right now . And thats even the republican base. So we should probably take a breather right now to look not just shifting the chairs on the titanic but rather we should take a look inwardly to see why are we here . Why in the business parlance, if you were in business and twothirds or threequarters of your customers were dissatisfied for you, before you come out with a new product, you should probably look at your own Business Model and see what you need to make changes. Thats the october we have during october. Congressman, good to see you again, sir. Good to be back with you. Thanks so much. Do not forget, cnbc is hosting the next gop debate. It is in colorado on october 28th. Folks, thats the same day as the fed meeting, mandy, that is sure to be a day with some fireworks. Perhaps fireworks of many kinds. Lots of fireworks. Okay. The biotechs, down 22 from july 20th, that was their closing high on july 20th ending the groups strongest bull market in its history. We want to know, is the run over for is this a really big buying opportunity . As we head out, a look at how some of the biggest biotechs have performed this year. You have amgen down 15 . Biogen down 17 . Gilead relatively speaking has held up pretty well. Up 0. 8 . You know, not bad compared to the others but still not great. Well be back after this. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is, can your business deliver . Go to ziprecruiter. Com and post your job to over one hundred of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. And now you can use zip recruiter for free. Go to ziprecruiter. Com. Welcome back to power lunch. Im brian in for tyler. Breaking news right now on aol. Julia boorstin with more on that. Julia . Thats right. Aol is making a big move into live mobile video creating tools in a platform for any content company to create and distribute live mobile videos and events to as many as half a billion mobile users all around the world. Aols Ceo Tim Armstrong saying the company is committed to streaming 9 to 15 hours of events daily. As well as its 1700 partners and parent verizons new platform go 90. Live is probably the largest white Space Available with mobile and mobile video, and mobile video is projected to be 90 of the data flowing through the internet is going to be mobile video. And if you think about how big live is in peoples lives, its probably going to be the most impactful and important thing over the next five years. Aol will announce a new 40 million ad deal tied to this new live event space and we have to remember as more live mobile video drives more data usage, thats also good news for aols parent, which is verizon. Mandy, back over to you. Thank you very much. Lets get to seema mody for a market flash. Home builders another casualty of the overall market selloff, pulte group, d. R. Horton, lennar and ryland group all down. Uncertainty in Financial Markets and rising prices for homes may be putting wouldbe buyers on the sidelines. Mandy, back to you. Thank you very much. Lets get to the bond market where Rick Santelli joins us from the cme. Ricky, bad day for equities. How are bonds looking . I dont know if id use bad or good. Its definitely a big down day for equities and if you look at the yields, its a big down day for yields, up day for prices. How bad is it . You have to go to the 25th of august to find closes in 10s and 30s as you see on these charts of 10s and 30s. 10s are down 6. Right now 30s are down 8 basis points, but we have covered this ground before. Well continue to monitor it with guns hot on stocks. Of course, stringing many days down over the last three or four weeks. If we look at the dollar index, think about Short Covering on the carry currencies. A twoday chart of hyg really shows what everybody is talking about today, high yield, the loop of equity weakness into the credit markets continues to grab many traders attention. Lowest levels since the fall of 2011. Sully, mandy, back to you. All right, rick. Thanks very much. Tough start to the week for stocks. The s p 500 with the losses today back in correction. The Dow Jones Industrial average on pace for its Third Straight negative quarter. So you might be asking how do you protect your money . Five stocks that will shield you from the volatility. Those names coming up. Were back in two minutes. under loud music this is the place. Sustainable tea tree eir boil and kale. Ade from you, my friend, recognize when a trend has reached critical mass. Yes, when others focus on one thing, you see whats coming next. You see opportunity. Thats what a type e does. And so it begins. With e trades investing insights center, you can spot trends before they become trendy. E trade. Opportunity is everywhere. Why pause a spontaneous moment to take a pill . Or stop to find a bathroom . Cialis for daily use, is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. 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A new cnbc wall street journal poll says 6 in 10 americans are opposed to completely eliminating planned parenthoods federal funding including more than 40 who are strongly opposed. Attitudes about the group are virtually unchanged months after controversy over fetal tissue and organs surfaced. Former House Speaker Dennis Hasterts attorneys are talking with prosecutors about a possible plea deal in the republicans hush money case. Both sides telling a judge hastert didnt attend that hearing in chicago. Joyce mitchell who helped two murderers escape from a maximum security lockup was sentenced. She was given a 2 1 3 to 7year prison term under a plea deal. And fifa president sepp blatter selling his staff that he has done nothing illegal or improper and will remain in his job until february. Thats according to his lawyers. Blatter is under criminal investigation by swiss authorities. Youre up to date. Back to you, brian. Sue, thank you very much. The fed is making some headlines right now. Whats new . The day ends in a y. Sara eisen with breaking news. We have comments from Charlie Evans, the president of chicago fed. Hes in no hurry to raise Interest Rates. Hes telling Business Leaders in milwaukee right now that, quote, a later liftoff positions the economy best for potential challenges ahead. We knew he was dovish. This is the first time were hearing from him since the last Federal Reserve meeting. Why is he in no hurry . Hes worried about inflation. He says hes, quote, far less confident about reaching the feds inflation goal over the median term. He also says hes less sanguine, whats becoming a favorite word of fed members, than his fed colleagues about reaching the inflation target. He says it could well be into the middle of next year before the dollar and Energy Headwinds on inflation dissipate. And he also isnt convinced that the job market is fully healthy saying he still sees slack despite the fact that the Unemployment Rate continues to fall. He goes on to say that, in fact, raising Interest Rates prematurely would cause, quote, substantial costs. One of those costs that he is discussing, credibility. Hes worried that tightening before the inflation target is met will actually send the wrong signal to the public and the markets about how serious they are on their inflation target. He says hed rather overshoot on inflation and be extra cautious that they can get there. After the first liftoff, the first Interest Rate hike occurs, he says it would be appropriate to raise rates very gradually. The take away, evans is laying out a thoughtful and cautious view about why this is not the time to hike but this is not the core view of the fed. Bill dudley, yellen saying this year is in the cards. He could be a dissenter because hes a Voting Member if they do raise Interest Rates. You know what it says about the fed, sara . They dont agree. They need to stop talking. The Federal Reserve is like having nine parents, and when you ask them to do something but dont you the market is the child and the fed they need to stop talking. I would only say dont you want there to be a healthy discussion among economists and among investors on when the time is to go because its a the time to go is when the fed does it. The time to go is when the fed does it, just do it rip off the bandaid, huh . Its not a bandaid. Its still a quarter point. Thats one argument, brian. See, were having a debate right now. I. Im not debating. Im just saying the fed needs to stop talking. 60 day moratorium. Gold prices closing right now. Lets look at how gold is closing. Ive got to wait for the board to pop up. Gold ending down 1,131. Silver losing more than gold in the past couple months. Silver has performed twice as weak. In other words been half as bad as gold. You have playalladium and plati also getting whacked. Im looking at the dxy, the dollar is lower and its still not helping those precious metals. You know what we need . We need another fed speaker to come out and Say Something completely different than the one 30 minutes before says. Be careful what you wish before because thats the kind of thing thats going to happen. If you werent confused already, lets add a little more confusion. Lets look at the equity market. You have the dow down 248 points. You have the spx, the s p 500, down by over 2 now sitting on 1890. And the nasdaq is a sea of red to use theres really no other word for it at this stage. Its currently down by 2. 7 . Check back in on the trading action. Bertha coombs is on the tech stock beat at the nasdaq. Mary thompson joins me once again. Were going to put the Third Quarter in the books this week, right . Thats right. I bet there are a lot of people who are happy to put it behind them. And its going to be the Third Quarterly decline for the Dow Jones Industrial average if we stay on this pace. You know what i found interesting about evans comments is he was talking about he doesnt expect any kind of pressure or i should say upward pressure from the Energy Prices until the middle of next year and thats one of the reasons were expecting another decline in earnings for the Third Quarter, something we will start to hear about. Thats going to pressure overall earnings for the s p 500 which some people say is one reason were seeing a bit of a correction is the dau ow is off 252. Goldman sachs having a price cut to 215 from 245 at credit suisse. United health, visa, and nike lower. It looks like investors raising a little money there. Moving on to the s p winners, were going to take another look at it even though the s p is below that 1900 mark, here are some stocks moving to the upside. Alcoa splitting into two. Molson coors getting a bid because were anticipating that offer from anheuser busch. Altria among the winners today. There was a lot of deal talk today both positive and negative. We want to look at vodafone and liberty global. They were talking about exchanging some of their assets in europe. They couldnt agree on the value so that is off the table. On the other hand we have nex star making a bid for media general. No winners or very few winners on wall street today. The dow off 252. Thank you very much. Mary thompson. Bertha, whats new . Whats been happening at the nasdaq since we last spoke . Very few winners. Only a handful of large cap stocks. Fewer than about a half hour and i looked right now. Its just intel, discovery are trading to the upside. Intel, the chip giant is one of 25 nasdaq 100 stocks that are positive for the month. Nasdaq large caps are relative outperforms. If you bring in the chart to look at its the small cap russell 2000. It has been crushed today and crushed this quarter. Down for the First Quarter since the September Quarter of last year when it finished at about 1100 or so. Its falling below that today. December and march quarters last year saw the index bounce back to record highs. But that was when biotechs were still on an uptrend and the sectors break down into bear market territory this month is dragging down the rest of the health care sector, small caps, large caps. Its a very different story. So thats going to be something to watch, and when you look at one bit of good news, the best performing stock for the month and the quarter, Activision Blizzard up 10 for the month, 30 for the quarter. More than 50 for the year and Fourth Quarter is seasonally the strongest one for video gamemakers. Cowan raising the price target to 35 to 28. Thank you, bertha. Stocks are kicking offer the week in the red. The s p 500 falling below the 1900 level and the last time it went below that was in late august. Joining us now, robert luna and kate wand, investment strategist at edward jones. I wanted to start with the jones. We were listening to Charlie Evans who says there is no hurry to hike rates and brian quipped just stop talking. We have too many fed members stirring this pot. Rocket, do you feel its creating more confusion as opposed to giving some kind of clarity as to the direction of Interest Rates . I think so, mandy, and i think brian made a valid point. Theyre trying to be transparent which you cant argue against transparency, but theres such a thing as overload of information and i think thats what a lot of investors are getting right now. People are very panicked when theyre hearing these types of headlines. Its not giving them a lot of clarity. In terms of getting some longterm investor money back into this market, i dont think thats going to do anything to give it a boost. What do you think, kate . I would agree. I think overall were seeing a lot of focus on every little bit of data because the fed says theyre data dependent and in addition with all the differing views, its not helping investors get a clearer view. Its not giving them confidence. In fact, its doing the reverse. So i think the fed needs to do a better job of communicating what its really planning to do as opposed to all the various options that different people think it might take. Yeah. Really feels like this new era of communication and transparency seems to be backfiring a little bit. Robert, talk to me about what youre doing during the upcoming earnings season. Have estimates come down sufficiently to the point where we can get a lot of upside surprises . The usual story in the earnings season, or are we genuinely going to see maybe even an earns recession, just too many head winds out there . I think you bring up a point in terms of earnings season being able to separate stocks that are able to execute in an environment like this versus just the overall market because the overall market, mandy, in general, technicals are breaking down and were down about 10 off the highs, but if you look back to 2011 in my view we could easily have another 7 to 10 downside here but that being said, theres a lot of stocks that have corrected 25 , 30 in this market and i think a lot of that has been baked in. So you can see some positive earnings announcements coming out. I think expectations have been brought down and i would not be surprised to see individual stocks beat expectations and start to break out away from the overall down trend. Maybe we can flash up there some of the stocks you like. Quickly, kate, to what degree do you think the right thing to do now is to avoid or stay clear of Growth Stocks and go more for the dividend payers . Because i can see here on your list the kind of stocks the individual names that youre going for are going to offer you good Dividend Growth. Yes. We think that Dividend Growth is actually really important at this point. They tend to be more defensively positioned because theyve got sustainable competitive advantages, and certainly theyre the kinds of companies where if one part of the business isnt doing well, other parts typically do. It gives them a better opportunity to be able to beat expectations not only in this quarter but going forward, and we actually think that the pullback in prices in many cases has gone across all stocks including ones that arent really appropriate. So we think that now is the time to be adding Quality Companies that can benefit from their stronger growth over the next few quarters and years. And you like visa, lowes, and merck. Thank you for joining us today. And dear viewer, you can go to powerlunch. Cnbc. Com. You can always find the silver lining. The donald, donald trump, out with his tax plan. He says it will provide major tax cuts and boost growth. How excactly will it do that . Only three names, j j, intel, and United Technologies are up, the rest, a sea of red. Td amerik hard. Wow, that was random. Random . No its all about understanding patterns like the mail guy at 3 12 every day or jerry, getting dumped every third tuesday. This happens every third tuesday. We have Pattern Recognition Technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. For all the confidence you need. Td ameritrade. You got this. Im mandy drury and welcome back to power lunch. Jcpenney shares are lower but not lower by that much when you consider how bad the damage is out there in the Broader Market, but it got an upgrade to buy from neutral with ascertain saying it is more confident in the companys turnaround plan following a meeting with the new ceo. Those shares are down 5 over the past one year. Ch dutch drug maeger novo nordisk has received fda approval for a diabetes drug clearing the way for the companys largest ever drug lunch. And vodafone has pulled out of talks with liberty global. Donald trump unveiled his tax plan just a short while ago. He says it will provide major tax cuts and boost Economic Growth. How exactly would it do that . Lets go straight to john harwood live in washington with more. Brian, a couple weeks ago it was jeb bush laying out his tax plan. Today it was donald trump at the trump tower in manhattan. He said he was advised by leading economists on this although he wouldnt name them and to look at the top lines, you would think maybe he just took a look at jeb bushs plan and said im going to go a little lower than that. Lets lay them side by side. Jeb bush has a top Rate Proposed of 28 . Donald trump goes lower to 25 . Youve got a top business rate for jeb bush of 20 . Donald trump says, no, 15 will be my top rate. Jeb bush says family of four earning 40,000 or less would be taken off the federal tax roles completely. Donald trump says if youre a married couple making 50,000 or less, you come off the tax role. Thats even more. Now, of course, the flip side of this is what happens to the deficit . Jeb bush had his plan evaluated by several leading economists, including Marty Feldstein and glen hubbard. They came up with an estimate that said it would add to the deficit at least 1. 2 trillion over ten years if he didnt have the Dynamic Growth effects that jeb bush predicted, it would raise it 3. 5 trillion. Now, you cant score a plan like trumps because theres not enough detail. He says its revenue neutral but you have to put a big question mark behind that because on all surface indications it would be more of a blow to the deficit than jeb bushs plan, guys. Back to you. John harwood, thank you very much. We can certainly press donald trump on that on october 28th because that is the date for the next republican president ial debate and it will be hosted right here on cnbc. Its also, mandy, the fed day. Big day. Big day. Take a look at the ibb, that tracks the biotechs. Its now down over 20 from the closing high on july 20th. So do you get in now . Do you stay clear . And what does it mean for the Broader Market . Thats still ahead on power lunch. Do not change the channel. This bale of hay cannot be controlled. When a wildfire raged through elkhorn ranch, the sudden loss of pasture became a serious problem for a family business. Faced with horses that needed feeding and a texas drought that sent hay prices soaring, the owners had to act fast. Thankfully, mary miller banks with chase for business. And with greater financial clarity and a relationship built for the unexpected, she could control her cash flow, and keep the ranch running. Chase for business. So you can own it. Here are this hours power points. Stocks are down this hour. The s p 500 and nasdaq now on a fiveday losing streak. That is their longest such streak in a month. The dow down for the fourth time in five sessions. Charlie he was says hes in no hurry to raise rates. He says a later liftoff positions the economy best for potential challenges ahead. Lets bring in Kenny Polcari and deke guilfoyle. Were down but it doesnt feel like panic. It doesnt. Theyre accentuating everything negative they can possibly throw in and then you have the fed speak. This morning it was a dovish comment, last week yellen became more hawkish. The market remains confused. People want to play it safe and safe at the moment is to raise some cash. Do we need to seed o oil bot . Thats part of it. But i think technically were heading down to 1860s and i dont think you will see panic until we approach that level. Why . Well, because technically we are in a corrective mode right here. And 1867 was the low of that period. I think if we see that capitulation low breached, then you will see a decision made. Right. If you see the panic start to build when we get there, thats the key. I dont think youre going to. I think youll find stability. What do you think people are doing largely at the moment . Do you think as bob has been harping on a bit, theres a bit of a buyers strike . A little bit of preservation of capital. Youre seeing the mo of into treasuries, the move out of every sector even utilities. Youre seeing some people protect their money. Dont forget, its not a buyers strike. For every trade theres a buyer and a seller. The buyers are just being much more selective in terms of how aggressive or what theyre willing to pay at the moment to test the will of the seller. Are you buying anything . Am i buying at the moment . Im waiting until we get to 1860. 1867, thats the line in the sand, isnt it . Right now. If we breach that, we see panic. Then theres a decision. Then theres a decision. Brian, back over to you. Mandy, thanks very much. She is one of the richest women in the world. She ran one of the Biggest Oil Companies on the planet. And she stops by to talk about what the commodities rout is doing to the emerging markets. And here are the sectors and how theyre faring. As you might imagine, theyre all in the red right now. Utilities the only sector up. We are back after this. Here is whats ahead in the next hour. Much more in the selloff. Biotechs once again being sold. We have full coverage coming your way. Also ahead, the big ripple impact of the commodity collapse. The five things that should be on your radar. And we are putting a price tag on the pain in the oil patch. The big number hitting oil investors. All that straight ahead. Mandy . You were talking about the commodities crush. Its had a major impact on emerging markets. Lets bring in one woman who knows a thing or two about that. Thats one of the most influential women in the world. She also ran one of the Biggest Oil Companies in africa. Its a pleasure to have you along today. Its a pleasure to be here. Talk to me about what kind of impact the dramatic drop in oil is having on the nigerian economy and also the Overall Investment thesis for nigeria. I believe the drop in oil prices is affecting all Oil Producing countries and nigeria is not an exception. Actually i believe that nigeria may be facing challenges at some point or the other in meeting its obligations in its budgetary expenditures. Thats not impossible. But theres the wrong perception that nigeria relies solely on oil production. Thats not the case. Theres nigerias booming telecom industry, the banking industry, and the Consumer Retail industry. Is it enough though . Because i think 90 of your exports are from the oil and gas sectors. Well, actually, the oil the oil sector brings in 10 of nigerias gdp, and the Agricultural Sector brings in 20 and the rest bring in 50 . I just want to jump in here. Aside from oil prices, the ka currency is impacting the state of business in nigeria. How is the currency impacting the state of business right now in your country . Its affecting the government naturally to be able to honor its obligations in its expenditures, and then for the populace its affecting businesses, and i believe that it will improve with time, but for now its struggling, but i believe that is going toim prove. And, indeed, we have seen that currency at record lows over the course of the year. Have you seen negative impact in terms of investment dollars, people pulling their money out of nigeria. I dont want to harp on about the oil prices but nonetheless it is, as you say, it is an impact. Have you seen people pulling their money out of nigeria as a result of that . Well, i dont think so. I dont think so, not for now. Not for now but do you expect it to happen in the future . Well, depending on whats happening with the oil prices. But i believe that the other sectors, the other sectors that are cushioning the negative effect of the Oil Price Drop will make people still invest in nigeria in all those other areas because the all those areas are booming and reaping positive effects. You have a foundation and its aimed at improving the state of business, doing business in nigeria. Tell us a little bit about your foundation and what youre trying to achieve. Our foundation basically looks after widows and orphans and widows and orphans that we look after usually most of them are poor, and we help them to be able to get out of poverty by giving them interestfree microcredits. When we give them interestfree microcredits, it helps their businesses. Its an empowerment and we also look after the orphans and we reduced children by giving them scholarships. Great. The scholarships that we give them takes them to University Level and i believe that okay. Were investing in humans and its going to reflect positively on the rest of the country and the world. Keep up the good work. Thank you very much for joining us. Thank you very much. That it is for the very first hour of power lunch. Brian, thank you very much for riding shotgun there and take it away. Mandy, thank you very much. It is now 2 00 on wall street, 11 00 a. M. In bakersfield, california. Stocks are down, the dow is off 270 points as the commodities pain continues to take its toll on investors. Im still brian sullivan. Melissa lee is joining us from the nasdaq. More on commodities in a moment but first lets get to the overall market selloff. Mary thompson is on the floor of the new york stock exchange. We have Rick Santelli in the bond pits of chicago. Mary, just a continued day in a weak streak for stocks. It certainly is. The dow close to the lows of the day as we speak and also the s p joining the dow and the nasdaq in correction territory right now trading below that 1900 mark in todays session. A session marked by concerns about what we saw as a selloff in europe, concerns about a decline in Chinese Industrial profits and, of course, the weakness in the commodity space that we are seeing today even as the dollar pulls back. Thats not giving a lift to any commodities today. S p off 2. 4 . The russell breaking off what some people call the key psychological level of 1100. Now off 2. 75 . Quick check of the sectors driving the markets lower today. Health care remains under pressure on concerns about price gouging, et cetera. This has been a group along with biotech thats seen a sharp selloff. Energy under pressure as cruel o crude Oil Continues to fall. Weakness in oil, zinc, copper. And discretionary were seeing a pull back in some of the home builders. Disappointing numbers on pending home sales today and that is putting pressure on this group. As you can see, off more than 4 across the board. The dow now at the worst levels of the day, off 282 points. Brian, back to you. Mary thompson, thank you very much. We should note we are now on our lows of the day. The dow down 280 points right now, about a 1. 7 move down for the Dow Jones Industrial average, which is now down more than 10 in three months. Lets get a check on bonds for whom the bell tolls, our own Rick Santelli. Tell you what, brian. To really get a handle on bonds, we have to start in europe as we were just discussing. If you look at the dax, basically a chart going back to december, were flirting with the lowest closing prices of the year. And how did that show up in the currency . Well, Short Covering pushes the euro higher. It is used in a carry trade. That ends up putting the investors short. If we look at bund yields, well, we settled a few basis points above 56. 56, you see that flip on the right hand, thats the 21st. Thats what traders are paying attention to. Our 10year that you started out asking me about is down a half a dozen basis points. We havent settled under, under 212 since the 25th of august, although theres been plenty of intraday violations. As you see on this chart going back to the 25th of august. So brian, we continue to dance to the music being played by equities and the equity market is listening to the global sha rinkage story. Health care is right now in the negative territory. Abbvie hitting session lows over 5 . They were upgraded from neutral to sell following a near 19 drop in year as well as an extended time line before abbvies best selling hue mara faces generic competition. The stock is down 5. 3 . Health care, biotech, those are the big stories. We saw the nasdaq hitting fresh lows, a full 3 . Down 141 points. Biotech is the ones to watch. Biomarin, regeneron, and m wyla. Facebook is down almost five full percentage points. Amazon down 5 . Netflix down 2 . The one bright spot would be intel. A bullish note based on positive cloud demand and that stock is holding on to its gains. Back to biotech, its on track for its worst quarterly performance since 2002. Lets bring in david seeberg, and jerry castle. The question investors want to know is now that we see biotech back to 2014 levels, is it a time to buy . I know youre going to say the Institutional Investor base, theyre not showing signs of panic, but the fact of the matter is what helped push biotech higher are the tourist traders who are buying it because thats where the momentum and the growth was in the market and now youre seeing the flush of those guys out of this market. Shouldnt there be a rerating here . Look, i think you pointed into the right direction. Its the renters versus the real owners. I look at the renters as the etf holders. I do believe that some of them are coming out. A lot of them may be coming out. Look at the volume in a lot of etfs. Its been off the charts. So were probably going to see massive, massive volume again today on the bell. Its just the fact, but the reality this pricing discuss were going through, this is waxman all over again. Remember last year when waxman many commentary on pricing and we saw the space get dismantled again. Clinton makes comments on it. Shes not going to be able to implement change in pricing. Even if a democrat comes into office, youre still going to have a republican controlled congress. Were at least three years away from any legal change being implemented. So if you look at the space and say, yeah, its had an incredible run over five years. Were seeing some global concerns. Youre seeing the entire market come off and then the commentary from hillary about pricing has fueled the fire here. I think were getting to a level thats very interesting. Youre seeing some big large cap names being totally dismantled for the wrong reasons. Youre looking at a setup that could be one of the best buying opportunities jerry, it seems like a baby bath water situation. 144 names in the ibb, 141 of them are down today. 3 are higher. Everything is being sold. These companies are different, different products, different markets, different intellectual properties. Investors are just dumping them. I know, and gilead is a great example. Somebody who has a great new solution for Something Like hep c but the step back is the reality is this group ran much further than people would have given it credit when there was no chance of an Interest Rate increase, when the large pharma was looking for and desperate for something to buy to fill the pipelines. There might be a change now and throw in the fact there was no real regulation issue on the horizon. These names move because people feel longer term they can discount five, ten years from now of earnings. If theres going to be question marks over that five or tenyear time frame, the stocks are not going to enjoy the same valuations and the valuations are what theyre required to have if youre going to step in right now in an environment like this. My feeling is that youre going to have a good three to six months here where were going to watch this group consolidate and possibly trade significantly lower if market continues to deteriorate. And thats just because some of those great Drivers Behind them arent going to be there anymore for at least the next six to nine months and thats why i would step away here and let the dust settle. Steve, i think jerry makes a good point. Thats one of the drivers of the biotech boom had been the notion that Large Pharma Companies were buying smaller biotech companies. With the volatility the dealmaking will screech to a halt. Regardless of the pricing brouhaha that may be the excuse to sell this week, are you concerned that with the dealmaking drying up, thats going to be yet another thing thats going to be taken out of the market to drive the stocks higher . You know, to be frank with you, weve seen a real migration to the best performers, the Largest Company performers within the space over the recent several months. Smaller names, the smaller cap names some of the smaller mid cap names have not done that well. Theyve had a difficult time in this environment. I think from an acquisition perspective, yeah, it could take its toll. I think more on the smaller cap names but the larger cap names which weve talked about a lot on the show, the larger cap names are still innovating. Innovation is still there and going to be there for a long period of time. Pricing, pricing is not an issue. Is this hey, hey, david, david, david. I know were running out of time but i want to jump in. Its a hot topic and we have talked about it offline. Is this another sign that etfs are not some magic elixir, they can be dangerous . Absolutely, absolutely. I think the evidentfs, the etfs absolutely driving this bus right now. Theres some sort of reweighting coming on thats forting sales within a group of etfs and theyre definitely coming out. So this is i think a risk off scenario for a certain segment of that market. I dont think its going to last. I think its going to be a very shortlived phenomenon. David and jerry, guys jerry, last word, go ahead. I just said thats another reason why i would be away from it. We dont know how far the etf run has on the outflow side, so its another reason to stay away. Jerry and david, a good discussion. Thank you, guys. Appreciate that. All right. Up next, the big ripple impact of the commodity collapse, the five areas that are getting hit hard right now. We have all five for you and reaction. Another look at the major market averages as we head to break. The Dow Jones Industrial average down nearly 2 . Headed for the worst quarter in five years. Happy monday, everybody. Were back right after this. Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . Im a gas service rep for pg e in san jose. As a gas service rep we are basically the ambassador of the company. We make the most contact with the customers on a daily basis. I work handinhand with crews to make sure our gas pipes are safe. My wife and i are both from san jose. My kids and their friends live in this community. Every time i go to a customers house, their children could be friends with my children so its important to me. One of the most rewarding parts of this job is after you help a customer, seeing a smile on their face. Together, were building a better california. Welcome bark to power lunch. Im brian sullivan. Stocks continue to be weak. Here is what is happening in the markets right now. The Dow Jones Industrial average down 287 points. Goldman sachs, visa among the biggest decliners. The nasdaq is a full 3 lower. Gold also down more than 1 . The dow is now on pace for its worst quarter in years and investors increasingly blaming the oil and commodity rout for the market slide. But the oil and metal fallout, several things are at play, including this, how the oil and Metals Market are leading the selloff. The miners because the commodity names are getting slammed along with the commodities themselves, what happens with deals and reorganizations . A couple headlines there today. More spending cuts are likely in the oil patch and finally maybe more stock losses for the emerging markets. Our team of reporters in place to hit all five of these different angles and let us start with the big breakdown in commodities themselves. We have this debate all the time. Is the market leading the commodities complex lower . Are the commodities taking the market down . Traders here will tell you that its equities taking us down, and reason for that is because there are concerns about demand. Not just here at home but also globally, concerns over china, concerns about a rate hike from the fed reiterated today by dudley, janet yellen last week. I know the fed doesnt all agree but it could potentially be back on the table. Were looking at oil prices down about 3 today just near session lows at this point. Approaching that 44 mark. At the same time youre seeing the products get beaten up as well. In the metals complex, you mentioned gold, more than 10 slide today. Gold was able to get over 1,150 last week but not able to hold. And copper down 6 on the week. 15 in the last three months. This to commodities traders means theres a problem globally theyre watching and that is why the selloff is occurring. Copper an indicator of what the broader economy is going. Brian, back to you. Jackie, thank you. Well, a few months ago mining giant glen corps was a mining giant a 70 billion company. Its worth 14 billion and falling. Lets get to kate kelily. Youre right. They plunged on massive volume to an alltime low and it was one of the heaviest volume days since its ipo in 2011. And really on precious little news. What was out was an Analyst Report from invest tech that questioned forward earnings if Commodity Prices are to remain low which many people expect. The report rightly states that debt is, quote, fast becoming the most important consideration for Mining Company management, unquote, as a higher debt base makes Company Equity worth less and less. Glencore is hip to that and had been reducing debt in recent weeks. Announcing other measures to fix its balance sheet. That includes the possibility of asset sales. All eyes on that right now. That would probably include precious metal is digs up a as a byproduct of base metal mining and a piece of its agricultural business. However, that piece originally envisioned as bringing on a minority shareholder to coinvest could morph into a sale of the entire agribusiness. Company watchers have told me if the pressure on the Company Keeps up. Meanwhile, glencore debt remains a huge focus. The price of swaps to protect against a gloncore default shooting up to recent highs. Shooting up massively today and the question of Counter Party risk, of course, this is familiar from the financial crisis, this is what banks or other creditors could, you know, get hurt, how much damage they could sustain if glencore were to collapse is becoming more prominent, brian. So a lot of looming questions around this name. All right. Ill take it, kate kelly. The commodity route is also sparking some dealmaking and reorg. So alcoa announcing it will split into two publicly traded companies. One thats going to be focused on the upstream business, mining, refining, smelting, casting, energy assets. The other on valueadd. Manufactured finished products or aerospace, automotive, and construction. Why . To unlock a greater value for its growing portfolio. Shares have traded similarly to aluminum on the london metals exchange. Now, that despite the fact that alcoa has been transitioning aggressively beyond just aluminum production into high margin, high growth finished products. On an investor call the ceo pointed out that alcoas been compared to other Materials Companies but that aluminum is experiencing, quote enormous demand growth and this is the culmination of a multiyear transformation. Also today getting headlines around Energy Transfer equity. Its announcing it will acquire Williams Companies in a 37. 7 billion cash and stock deal that includes debt. Thats going to create a massive Natural Gas Pipeline Network nationwide. This after Williams Companies rebuffed an all stock 48 billion bid back in june saying that that offer significantly undervalued the company. Well, since then weve seen nat gas prices have falling over 5 so far this quarter, and crude is down 25 . Shares of both companies have plunged on this news. So given the lower accepted bid, investors not too impressed with this deal today either. You can see right here Energy Transfer equity is down nearly 12 . Its Williams Companies are down 11 . On this news. Brian . 32 billion deal not even on the front page. That tells you the kind of environment that we are in. Morgan, thank you. All right. The dow now down 300 points. You might have seen it flash at the bottom of the screen. Probably not if youre listening on the radar, the radio, oil sitting below 45 bucks a barrel. Seema mody is rejoining us with the commodity story. Shares of Royal Dutch Shell falling almost 3 today. The company says it will stop exploration activity in offshore alaska for the foreseeable future. This after failing to find enough oil in the region. Shell had spent billions on the project hoping it would bring a big boost in revenue. It will take a write down of 4. 1 billion. The Unsuccessful Campaign is shells second major setback in the arctic after it interrupted exploration back in 2012 when a drilling rig broke free and ran aground. The stock, keep in mind, down 31 so far this year. Thank you. And finally rounding out our five angles to the story, the steep drop in Commodity Prices putting intense pressure on many countries and their emerging market stock indexes. Cnbcs chief International Correspondent Michelle Carusocabrera joining us for more on that angle from the u. N. Michelle . Hey there, brian. Yeah, im going to focus on three countries in latin america. Lets start with brazil. Thats pretty obvious. Petro gas getting pumbleed. The bovespa hammered over the last year and brazilian bonds, look at the yields in brazil, suffering tremendously as theres growing uncertainty over whether the leader of that country can retain her position. Two others, cuba and ccolombia. These are directly related to the fall in the price of oil. Cuba being willing to reestablish diplomatic relations with the United States and the farc rebels of columbia finally made a peace deal last week. What do cuba and columbia have to do with the price of oil . Their patron state is venezuela which is just falling apart. Some latin america watchers i know call it the somalia of latin america because it is so devastated not only by internal corruption but by the decline in the price of oil. They need that revenue desperately to hold on. Michelle, thank you very much. Lets bring in now david, Global Investment strategist with guide Stone Capital management. David, are you buying any of these stocks or these markets or do you see more losses ahead . Actually i would say its a little too soon to be diving in there. Theres just still way too much uncertainty. You really have three cs driving emerging markets right now. You got capital outflows, you have commodity price declines, and you got currency devaluations and its a vicious cycle. The more currencies falls, its hurting the Economic Growth. Its creating inflation in a slow growth environment. Its a very difficult situation, and theres just not enough certainty right now to really get in front of this train. I think also, david, with all due respect, you left out a fourth c, idiocy. Because a lot of leaders like in venezuela have promised benefits to people they need to keep pumping the oil out so you dont get that natural supply demand sort of resuscitation where lets stop pumping for while because but they need the money so they have to keep pumping so were seeing the world flooded with more and more oil. Were seeing that in the u. S. We had this story just now on shell. Youre seeing a lot of reduction of capacity and the Shale Oil Plays and a lot of quill thats being idled. Were going to have to see more of that. Were going to have to see the Smaller Companies go out of business to bring supply down to level thats commensurate with demand to create a floor for prices. The other side is we have to hope that china and the emerging markets, particularly china, can level out in terms of Economic Growth so we dont see a significant decline in demand, but we are a little concerned that these big drops in commodities could be a canary in the coal mine with regard to chinese growth. David spika, thank you for joining us. The dow is down 300 points. Down five day this is a row. Headed for our worst quarter in more than five years. As we go to break, here are some of the most active names. Bank of america, pfizer, and freepo freeportmcmor freeportmcmoran. Alcoa up a bit. They say theyre going to split into two companies. Much more when power lunch returns. All right. And welcome back. Its 2 25 in the east and the dow down 293 points but the nasdaq again continues to take the brunt of the heat. It is down 3. 15 . In the dow united hale, visa, pfizer, and Goldman Sachs are the biggest decliners. We should point out the russell 2000 has broke below august lows of 1102. Its now at 1088. 9. Art cashin was speaking earlier in the day about how he was watching the 1100 level. Art, weve broken through it. The next stop would be 1040 which would be the 52week low on the russell 2000. Social security has become a hot button issue. Some candidates are calling for cuts while others are calling for tax hikes and expanding benefits but its also a hot button issue among financial advi advisers. Lets get to Sharon Epperson live at the Financial Planning Associations Annual conference in boston. Hi, sharon. Hi, melissa. This is First Time Ever that the Financial Planning association and aarp have released a joint survey on Social Security. Joining me now is aarp president janine english to talk about some of the results and also to talk about this market selloff were seeing and what a lot of retirees and nearretirees are facing in terms of their retirement security. Your research has shown a lot of folks are very concerned about a decline in their retirement portfolio and dont think theyll be able to retire. Well, they do think that it would be a big problem if they had a 10 decline. They would have to delay retirement because their portfolio is that important to them. Whats also interesting in this survey is that youve looked at Social Security which is a main component of Retirement Income and many people dont realize the way they claim their benefits could result in a possible 30 reduction in those benefits if they claim too early. What are some of the things that came out in the survey . Thats exactly it. The fact is that many people are claiming at the earliest stage in life, and, unfortunately, if they could delay that a little bit, they would be able to bring really hundreds of dollars, maybe thousands of dollars into their retirement every year. In addition to that, if they look at the normal retirement age of 66 and 67, if they could delay it to 70, they can increase their Social Security by 8 per year. Its a big number. Its the significant amount and its something thats guarante guaranteed. Whats interesting when we look at markets selling off, the Financial Planners are saying and i know you tell people as well, you cant do anything with knowing whats going to happen the next day in the markets necessarily, but you can plan for what you know is going to be there for you and thats Social Security. So what are some of the most important factors that in your research it shows that folks should be looking at . Well, they definitely should be looking at delaying claiming Social Security for as long as possible. Because one of the things that we know is a third of the people that are getting Social Security are able to stay out of poverty because of that. And the other thing we know is Social Security goes right back into the economy because people that are getting Social Security are spending it. And so theyre looking at things like their work history, looking at their other Retirement Income, their health, to make sure they find the right age for them to claim these benefits and make sure they make the most of them, right . They definitely need to look at that, too, but they also have to recognize that widows, widowers are going to also be reliant on that Social Security. So if someone takes it too early and they pass away, their widow or widower may have a much smaller nest egg to rely on when theyre in their 80s or 90s. What about the pessimists out there who say Social Security as it stands today will not be here as we know it. We already know that by 2035 we could see a significant reduction. So what do you say to those folks . What i say to those folks is Social Security is really the greatest program that we have. Its an 80yearold program and its kept people out of poverty. It has really given back on its promise. And its something you can count on even in market fluctuations like were seeing right now. Thank you so much janine english from aarp for joining us. I know its a big day here in the markets. A lot of these advisers are talking about what theyre going to be telling their clients to calm then down when we see yet another selloff. Its an important interview because i just sent a note out to the team reminding us, if we lose a couple percent, you have to double that effectively to make up for that down the road. So it definitely goes to peoples retirement and College Savings calculators. Sharon, thank you. Absolutely, absolutely. Appreciate it. Have a good day, sharon. Lets get now to the oil close and Jackie Deangelis at the nymex. Well, oil bouncing off the session lows but just barely. It looks like were going to close somewhere around 44. 50. Its 1. 25 loss on the day, roughly 3 . Commodities getting hit not just in the energy space but the metals as well which is interesting because weve got a little bit of a weaker dollar today but what traders are really saying is theyre worried about a rate hike and worried about it coming this year potentially in october as come of the fed officials have indicated. So this is something on the radar for sure and the concern right now is not just about a stronger dollar but also about demand globally. The concerns that were seeing not only in china but the issues that were seeing in the eurozone as well. Thats why commodities have seen this kind of a hit today, when you have an equity market like this thats taken a hit as well. Back to you. Thank you very much. Again, folks, if youre just joining us, a reminder stocks are selling off. Maybe not going there bad to worse but we are down a bit, down nearly 300 on the dow. Off four of five days. Headed for our worst quarter in more than five years. Youre watching power lunch, youre watching cnbc, first in business worldwide, and were back right after this. Im sue herera. Here is your cnbc news update at this hour. German prosecutors opening an investigation into former volkswagen ceo martin want erwi corn. Theyre the investigation will concentrate on whether fraud was committed. Hundreds of taliban fighters launching an attack on a strategic northern afghan city. Officials said battles with Government Forces were under way in at least four locations. The professional hunter charged with aiding the killing of cecil the lion in zimbabwe appearing in court. He was asking the charges against him be dropped saying he was wrongfully charged. And chipotle say car nitas are back on the restaurants in 90 of the restaurant and the return to all restaurants should be completed in november. It stopped serving pork in january after one of the suppliers violated their Animal Welfare standards. Thats the cnbc news update this hour. Back to you, brian. I guess its good for the diners, not so good for the pigs. Oh, that is all i can think about is charlottes web now, sue. Thank you very much. Sorry, brian. Some pig. Shed a tear. Exactly. Lets find some opportunity in this down market. We do every day, its street talk highlighting key analyst calls every day. Stock number one, a little social media startup called facebook. Town and country raising target to 115 from 110. Thats about 20 upside. They see a large monetization opportunity on the instant articles business as well as a larger Instagram User count. Facebook one of the few nasdaq 100 stocks up this quarter. See if it can hold on though, especially as people are looking to sort of take profits in some of the other stocks as sources of funds so well see if facebook holds. Now down 4 . Stock number two is atmel. Dialogue semi acquiring atmel but theres skepticism about the deal given how the stock is trading. Theyre at a 13 discount to the Intrinsic Value of the dee. The analyst believes the transaction will go ahead. I wonder if well see more headlines, concerns over deals mount as stocks fall. Next stop, citigroup. Credit suisse upgrading them to a buy. They know potential top line headlines but they say the stock is discounting the news. They did cut their target to 60 but thats still 20 upside from here. Interestingly, jeffries also upgraded the stock to a buy rating. The price target 65. In todays session though, as you recall on friday, we saw the selloff of biotech. Financials do really wiell. Today financials doing poorly. Morgan stanley also feeling the brunt of the pain. Fourth stock, knowles. This is a little spoken about apple supplier. Fbr is upgrading them a market perform. Up to a buck to 18. There are four knowles microphones in the iphone 6 up from three. Would it be fair to say investors have been crazy in love with knowles. Thats beyonces last name. Okay. That was terrible. Stock number five, endologics. Up graded to a buy from a neutral. Their target, 16. 30 upside to the current price. They see higher uptake prospects for nellix, a treatment for abdominal aortic aneurysms. But 17 is still not the april highs. That was 18. So this stock is sill down 36 from those highs. Seems like every stock is x down from the highs. That is true. A tough day all around unless your short the stock market in which it was a fantastic couple of days. Lets talk about whats ahead with the trading nation team. Jonathan and andrew join me. Jonathan, starting with you, youre looking at what you consider maybe a troubling indicator about what may be to come for stocks. What is it . Well, yeah, were looking at the 12month moving average on the s p 500 and for our viewers out there, its basically the same as the 200 Day Moving Average but what we like about it is because it only takes data once a month, it tends to take out a lot of the false signals. And really whats concerning us here is for the First Time Since 2007, the slope of that 12month moving average is actually inflecting down from a positive slope. Prior to that it last happened in 2000. Its a very slow moving average. It takes a long time to change directions but when it does, we think you want to take notice and for the first time in about seven years, its now turning to the downside. Now, we dont actually think necessarily were in for anything like we saw in 2000 or 2007. One of the things were looking at is the support levels with he saw from late august which many people are looking for the retest of the low around 1867 on the s p 500. We know the russell 2000 broke its august lows. We do think youre probably taking out 1867 which would bring in the october 2014 lows around 1820 and we do think you will find some shortterm stabilization around that area but we think to ignore this longterm moving average turning from a positive to a declining slope would be a mistake. Negative sign there. Fundamentally are you seeing the same kind of concern out there . Yeah, brian. So, yeah, we still think were viewing this as a bull market connection. Anything in the 10 to 15 down range at the august lows, i think were down about 12 . If we were to go back down and retest those which we think we will, it will still keep news the bull Market Correction zone. Anything bigger than that, 15 , 20plus percent, i think you have to think about down earnings, down economy. Just really dont see any evidence of that still. Most of the Economic Data is still pretty positive. Earnings are going to be slightly down with energy. Without energy theyre actually still pretty healthy. So, you know, overall we still think were going through this bottoming process. If you want to be really aggressive, buy near the lows, 1860 on the s p. If you want to be more conservative, wait to see if those lows hold and get a better rebound but youre going to be a little later. But overall we still think were tracking in a bull Market Correction. Quickly andrew, because its almost been a year since we were out in midland, texas, on this show and saying i thought that the oil slide was going to hurt the United States from an earnings perspective and maybe a jobs perspective. Not tooting the old horn, just simply saying we heard so much for months after that that this is a net positive for america, low gas prices are going to rescue everything. What has happened . Why havent we seen a better benefit at least to the stock market from this . Well, i mean, i think its two things. One is the magnitude of the decline. Youre talking about drops of 50 , 60 in terms of earnings on the Energy Sector where youre not really getting commensurate benefits to that that quickly. And now youre starting to see a little bit of signs. We got some personal spending and consumption data this morning started to show a little bit of an uptick in Consumer Spending last month. Maybe the gas benefit is starting to trickle in but the immediate negative has been bigger on the oil side. Honestly, been eight new restaurants opened upper in my house. Big chains obviously feeling it Strong Enough to come in. We appreciate it. Jonathan, were watching your charts very closely. Thank you very much. For more trading nation go to tradi tradingnati tradingnation. Cnbc. Com. There you go. 28 stocks down. Were back with more power lunch after this. House. Were back with more power welcome back to power lunch. Im melissa lee. Were continuing to track the selloff were watching in biotechs. Look at Regeneron Pharmaceuticals down again losing 10 of its value in the past ten trading days. Thats 5 billion in market cap wiped o ed out. Tyler . Brian . Im not smart or handsome enough to be tyler but i will do my best, melissa. Thank you. Not everybody tyler, if youre listening, youre welcome. Not everybody is getting slammed today. If you put money in some of these inverse etfs, youre doing pretty dog gone well. There are short etfs for not only the overall market but also for sectors like energy, some of these pro shares short s p, the sh, the dog, nice name, proshares short dow 30 and the pro shares ultrashort oil. Those are up. So even on a bad, bad day for people that are longterm investors, people who are short the market or inverse invested in these etfs are having a good day. Lets bring in ben willis of Princeton Securities Group and art cashin of ubs financial services. Art, the reason i asked our team, theyre great because they put those things up in about 20 seconds, to put those up on the board is that i made a comment about etfs maybe exacerbating selling earlier. Im not knocking etfs but now that mom and pop can actually short the market effectively by buying these kinds of etfs, should we not expect more volatility from here to eternity . I think etfs will be a factor in more volatility, but its not just when theyre directional or contradirectional. You buy a whole package of different parts of an industry and sometimes when theres mispricing, it spills out the other day. Thats what we saw on august 24th when there was some ordinary mispricing and the market opened down 1,000 points which it shouldnt have done. Ben, we have a dow down 10 over the last three months. In your mind what is the maybe one or two biggest things causing the selloff . Biotechs. Thats your story on the move in the market. Oil and the commodities complex. China obviously where the big story is, but i think the market was trying to find its bottom, if you will, from that story forward. But once Hillary Clinton started this whole arbitrage now in the Biotech Sector, today you have valeant vrx because congress decided theyre going to subpoena and make the company justify their pricing, biotech is doing all the damage in my opinion. Part of whats also having impact biotechwise is the russell. Art, i know that earlier on the network you said 1100 was the one you watch. We broke the august flash crash low on the russell 2000. Whats the next level youre watching . Is this a canary in the coal mine for a Broader Markets . It will be for a while. The next level in the russell for support is around 1082. We could see even more damage done here and to give you a wildcard, weve got people now talking about the fed and whether boehners move will move the fed target around. It looks like were going to have a debt ceiling fight in december, so that may eliminate december. Does that put new pressure for an october move . So thats the kind of debate were hearing as oil and the biotechs are falling. All good points. Thank you, art and ben, from the floor of the new york stock exchange. Brian . Carl icahn out with a big warning about the markets. Well tell you what it is ahead. And as we head to break. Look at how some of the most widely held stocks are trading down. The dow down nearly 300 points. Im here at the Td Ameritrade trader offices. Ahh. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place that lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim . For all the confidence you need. Td ameritrade. You got this. Warning and in a peculiar way. Really interesting of mr. Eye skaun. Both for the timing and message itself. Danger ahead, thats the warning from billionaire investor carl icahn in a new video set for release today n that video produced by mr. Icahn himself the outspoken activist says low Interest Rates have caused bubbles in art, real estate and high yield bonds and the fallout for the markets could be dramatic. Its like giving somebody medicine and this medicine is being given and given and given and we dont know whats going to happen. You dont know how bad the end of this is going to be. We do know, though, when you did it a few years ago it caused a catastrophe. It caused 08. Where do you draw the line here . Well, in a separate telephone interview surrounding voots release in icahn told me he is, quote, more hedged now that ive been in years as he believes stocks could go down a lot more. The fed may have backed itself into a corner he told me, they should have absolutely raised rates six months ago. Icahn says thats more difficult now because of concerns over china and the emerging markets. Icahn also said donald trump is the outsider washington needs. That video is for release comes tomorrow morning and we will have much more on it tomorrow. Okay. A comment and a question. The comment would be i would have rather seen him come on your show so you could press him on this because this is sort of a oneway message. Number two, you talked to him on the phone, how did he sound . The things that he says that weve just showed you are not necessarily new. Delivering alpha our marquis event that we have in the summer he has been negative on high yield for quite some time. Ask larry fink about that. Exactly. And the ripple effects that it could have in the marketplace. Maybe you could say he is a little more dyer now, feels like he needs to do what he did with this video to sort of underscore the message that he is trying to get out to investors. And your story written around that and what your conversation was up on cnbc. Com. One of the most read right now. Well, we are tracking this sell off today, the nasdaq the worst performing of the major three indices. The Biotech Sector is off of session lows right now. We will have much more on this selloff right after this break. Have been a top story after its first weekend of sales for its 6s and 6s plus phones but it is holding up better compared to the rest of the market on this big sell off today. So is apple your ultimate safety play . We will have more on that tonight on fast money at 5 00. Thank you very much. On stocks, this market and your money, tim dryling joining us now. Tim, its been a tough couple of days. Glen core, its a company most of our domestic viewers have probably never heard of or maybe heard of but dont know anything about, its a swiss based skp, its gone from 70 billion in market cap to 12 or 13 billion. A lot of concern about its leverage as a money manager how worried are you about that story if at all . It does present some concerns. One of the things that weve talked about even just today is the counterparty risk with all of their trades and the contracts that they are doing, there could be a fairly big reset as the counterparty risk ask assessed and if trades have to be unwound. So it could present some pretty bigrisks. Not trying to send out any worries, but that big market cap loss does open some eyes. You also have the feds sending seemingly nearly conflicting signals nearly every day. How do you cut through the noise and how do you focus and worry about making money . Well, for us in the private Wealth Management side we have the benefit of taking a longer view. Certainly the risks in the near term are pretty prevalent in the next month or two we see more down side risk for any investors that have mere sber immediate i cant tell to longer term time horizons its much easier to sit out with some longer term prospects. But to your point the uncertainty hasnt gone away, in fact, i think were getting more uncertainty from some of the fed actions tim, just quickly, we have with b. 30 seconds or so. You like healthcare. How are you feeling about healthcare because biotech is trading terribly, thats 20 of healthcare, its not just biotech, the hospital trade, insurers, large cap Pharma Companies that are underperforming the Broader Markets at this point. Right. In todays trades notwithstanding we are still bullish on healthcare, its a sector for all seasons. Within the sector you can have rotation between defensive and pro growth. With the innovators were still bullish on them. Theres still near term weakness to have had. A real pleasure. Thank you. Melissa, big show tonight at 5 00 well watch that. Closing bell starts right now. Announcer this is cnbc breaking news, market selloff. And welcome to the closing bell im Kayla Tausche kelly evans will be joining us from the Buckeye State shortly. Im bill griffeth. The volatility continues on wall street street, sometimes its a 200 point gain, today its a 300 point decline. China growth concerns weighing on commodity driven stocks for one. Take a look at some of the big