Its an ugly day on wall street, all major averages are down 2 . The dow wiping down 900 points in just two days we are on track for the worst start to the Fourth Quarter since 2008 and tech, one of the worst performing sectors today, check out some of these moves, microsoft, apple, visa, cisco all under pressure for more, lets get to bob posani a slowdown, not a recession thats a consensus will change the way you look at things a week consumer would second the country down for an Early Warning sign, ive been watching these big consumer stocks that have done well the last few years doubledigit gains here, theres some cracks showing. Starbucks has been weaker in the last month its down about 12 . That may not be surprising given how china is in its portfolio. You see some of the consumer giants here. You can argue, go to the defensive stocks these stocks have had large runups this year. That play has already happened these are very expensive names right now, coke, kimberly clark, Procter Gamble as you see, all are trading down today the weakness is widespread 5 to 1 decline to advance. All down about 2 . Thanks very much. As the impeachment inquiry is gaining steam, the president is holding a News Conference with the president of finland. Eomon javers is at the white house today. Weve seen him expressing real grievance with the impeachment process. He was live tweeting at nancy pelosi earlier today he used the word b. S. Which raised a lot of eyebrows he felt he had to deny a report that he wanted alligators in a moat at the u. S. Border with mexico, the press has gone crazy in reporting inaccurate information i think we can see a frustrated President Trump the president s been tweeting about the stock market today he said earlier all this impeachment process is driving the stock market and your 401 ks down theyre willing to hurt the country with only the 2020 election in mind the president blaming todays selloff on impeachment, and you have been talking to experts on wall street that are suggesting its that sour manufacturing number that we saw yesterday as a result in part of the president s trade war. This is a president who faces economic head winds now, and hes venting those frustrations in a advisable way. I think we can expect to see more of that. Bernie sanders health, and what it could mean for Elizabeth Warren as well she wants to see Bernie Sanders back on the campaign trail. No real reaction so far to the folks ive spoken to at the white house. They have largely viewed joe biden as the most likely or competitive democrat on the democratic side for this president as the dynamics change this is a president whos paying close attention to that. I dont expect hell get a question about it, you can expect theyre paying intense attention to that over 59 the Trump Campaign eaomon javers at the white house. Lets bring in brian gardiner, director of research at kbw. Lets talk about the overall picture in the economy right now. How worried are either of you. Ill start with you, christopher about weakening manufacturing which has been the banana peel that the market has had over the past two days . I think it is the focus of the market and its whats led to the selloff were well into the 11th year of expansion revenues have come under pressure margins are shrinking. Part of that may be uncertainty around trade policy goingforward. Its a combination of those things leading to the selloff, much more than the immediate headlines related to impeachment or Bernie Sanders health or anything like that brian, you said youre head of Washington Research down there, im wondering what you think of what christopher just said in other words, is impeachment really noise to the market on this particular day. Or could it be masking a concern that the consumer which has been the bull work in this economy might start to feel a little less secure and safe as the country embarks on an unchartered and potentially very divisive collision over impeachment . I think for now impeachment remains noise, the state of the consumer, the state of the Manufacturing Sector thats the driver, at some point politics is a contributing factor to the market selloff, its not the primary driver politics indirectly, the trade war thats been going on for the last 18 months is the policy driver i think the administration has had a good regulatory and tax agenda its inflicted selfinflicted wounding in trade, and i think that is now coming home to roost, and thats what youre seeing in the manufacturing numbers, some of the global trade numbers, and i think thats whats spooking the markets more than the impeachment noise. Its very rare that weve seen a president use a curse word in expressing his frustration about anything publicly i wonder how you think about that, going into the elections, though, and the president s position in greeting the chinese in about a weeks time does it put him in a position where hes more likely to make a deal all of this sort of plays into politics, right . Lets stipulate since the president was inaugurated, i think there are any number of things we could say. Its the first time weve seen this, this is incredibly rare. So i mean i have found myself saying that. I go home every night and say, i never saw that before. I say that day after day after day. Today is another one of those. I think the president is i think hes conflicted about what he wants he wants a short term deal on goods to get more goods bought by the chinese, while advisers are holding out on a intellectual property protections. I think they see it in their advantage to hold out longer what he may want, the chinese may not be on board with that. How does that dynamic play, the two conflicting political interests of the two negotiating partners christopher, similar question to you, how are you positioning into this Fourth Quarter because the muscle memory, you know, when it am coulds to october, when it comes to a Fourth Quarter of the year, its pretty negative. After we finished, the Third Quarter that set some records, is a little bit head spinning. If there is no pickup in business investment. Its going to be hard for that consumer to stay stronger much longer the consumer goods from china will put a lot of pressure on the markets goingforward. Those are the things well be watching for going into trade negotiations next week almost no matter what happens in those negotiations next week, tariffs are part of our exchange with china right now thats going to be looming over almost every conversation you had with the chinese and businesses better get used to it i havent heard any of you guys remark about Interest Rate policy around the globe, is very sort of easy money. And favorable to economic developments and to investing, does that back stop recession worries and market worries i think that gives most people confidence. Thats whats behind most of us who say, theres not a recession looming around the corner. But we are clearly headed to a much weaker patch if you have the Central Banks on your side, the recession tends to be shallower and shorter. Our Attention Spans tend to be short these days when we focus on the news of the day. The broader monetary picture looks relatively supportive. You can see on the lefthand side of your screen, a live picture of the east room of the white house, were awaiting President Trump and the president of finland lets bring in the btig directing manager. Julian, you still think were going to hit new highs we do why this is the kind of day where you have to step back and think about the things that are actually good with the economy the employment picture is fantastic, the consumer is still relatively sanguine. Muchmore present, a lot of tha has to do with concerns with regard to where the future of the trade war is going you step back and say Interest Rates are low, the consumer is there. The job market is there, the but is the problem that has been with us for 18 months now the market has chosen to ignore for 18 months, the trade war, the ism number yesterday basically has put the markets on warning, that were at this tipping point, particularly with regard to ce oo confidence where the weakness thats been offshore now has the potential to move on shore what the market is telling us today is that it wants progress in the trade war and it wants it next week . What if it doesnt get it what if the headlines that come out of history in beijing, there was a highly fev ant nationalistic parade celebrating china. The president of china is all about chinas acen dense the president of the United States is being dogged by an impeachment inquiry. It could well be that the combination of external circumstances surrounding President Trumps sort of decision mindset is going to create better conditions for a deal. In other words, the u. S. President will bemore inclined to do a deal because he needs a win . Absolutely. When you look at it, you look back to 1992 when the economy was soft coming to an election year, that was the last time we had a one term president george h. W. Bush. President trump is well aware of that, and wants to try to skew the outcome to where you have north of 2 . Where does the market go. The market will test the bottom of the four month trading range which is around 2800 were moving in that direction today. Is there more down side . There could be at this point the other thing were finding out whether its the fed or globally, is reaching the limits of its effectiveness, its certainly reaching the limits of how much it can keep the consumer confidence. It doesnt feel like Economic Activity is being held back. Money is too expensive not at all. If youre a manufacturer, your capital is abundant. Plenty of capital you dont have the confidence to make investment decisions. You dont know what the rules of the game are going to be six months, two months, 12 years down the line. If were going to get new progress, were going to test the bottom end of the trading range, what sectors do youlike for us, the message of the last several months and the fact that the market hasnt been able to break out to new highs with the leadership that was there in technology, with the leadership that was there in defense of utilities and consumer staples, in our view, this is going to have to be something where that ism number as was the case in 2016 was really sort of the recession that wasnt. So with the turnaround, whether its confidence driven or deal given, we dont expect a grand deal, just sort of a framework for the next round, is that the answers are going to be the more cyclical areas financials which have been under a lot of pressure the last several weeks but had a very good out performance as bond yields stabilize in september. And the more cyclical areas. A difficult place to have been in recently. And the other area for us is health care which has been under the political crosshairs defense cant carry the broad market higher any more the prospects of an Elizabeth Warren candidacy and financials are beholden to rates. These are not defensive sectors. In the case of health care, its even more offensive minded but our view would be that what youve seen in the bond market this year has brought tremendous discount both absolute and relative to those sectors combine that with politics, and to us, the risk reward given the fact that the dynamic is that there should be a path to greater growth in 2020 would lead us to those sectors julian, thank you so much dows down just under 500 points right now were awaiting President Trump who should be holding a News Conference with the president of finland any moment now were all over this big market selloff. A scary month for october so far. Theres a chart that could explain that and auto sales pumping the brakes well look at how the car industry is looking to turn around slumping sales. And much more on the broad market selloff here are the stocks pulling the dow lower this hour. Much more on all of this after this short break right here on power lunch. U. S. Car Sales Numbers are out for september. Zm despite a mixed bag of results, the automakers are down. We got the q 3 results from the big three. Yesterday we got the foreign automakers they were mixed but generally speaking, when you look at the entire industry, the Third Quarter was up relative to the Third Quarter of last year whether its gm, Fiat Chrysler it is in comparison with last year, its a little better than expected for Fiat Chrysler in terms of the pace of sales right now, were running at a 17 million clip that means if the Fourth Quarter comes in at the same sales pace, it will be the fifth Straight Year where auto sales are 17 million vehicles in the u. S. A couple stocks to watch today, tesla, were awaiting word on q 3 deliveries, could be later today, more likely many believe it will be likely tomorrow when we get those, the number to focus on, the estimate is 99,000 delivered. Talks will be between gm and uaw. When they start airing their grievances and saying, that offer really wasnt good enough, thats a clear sign that they are not close to a deal. Back to you. Stay right there, lets talk about whether the automakers can rev up their sales into the end of the year. What do you think, we know black friday is a huge selling day for cars here, we know from this journal article, that theres the credit terms that have been extended or are already extremely generous, how much higher can sales go . Sales have a little less in the tank americans are buying according to their budget. As we move into the Fourth Quarter of the year, Interest Rates are going to be as low as they have been for the year. Incentives, thats usually a sign of desperation, right a little bit. But its to move inventory we should be looking at sales of about 17 million should be the fifth Straight Year where history meets that mark. Fords were standout but not in a good way. Vehicle sales down ford is deemphasizing their vehicles we believe their suv sales were lower also correct me if im wrong, where does this put ford fords in a position period right now, they dont have the truck that ford has. Thats certainly one cause for the decline. Also the explorer and the escape are going to be brand new, they havent hit the market just yet they are trickling into dealership luck. Once they hit dealership lots in full, records should be reached. What kind of economic backdrop do we need to have in order for those forecasts, do you think to hold true what are the analysts saying in terms of what theyre expecting. What they need to see in the context of the u. S. Economy in order to get to 17. 1 the biggest indicator is consumer confidence. If you see that fall off, then its likely that youre going to see auto sales drop they generally move in lock step with each other when you look at the new vehicles that are out there. While these prices are going up. I know kelly mentioned 7year loans. You still have people saying, given the Interest Rates, theres a great selection on the used side. Were not seeing people who are saying its not a good time to buy a new car. When and how does the gm strike start to affect sales or has it already not so far. Weve been tracking those numbers, it hasnt because the dealers have plenty of inventory, and tyler, i said this from the beginning. They have enough inventory where theyre fine for four or five weeks, then you would start to see people say, i dont have the vehicle im looking for at this particular dealership, even then, keep in mind, if youre looking for a chevy silverado, youre a chevy guy youll say, okay, ill put it off for a month or two we saw some pretty weak numbers from neeson, toyota and honda, is there a trade war in effect or whats going on . A little bit of a demand declining for those models specifically ladies and gentlemen, the president of the United States and the president of i think we have the announcement that the president of the United States and the president of finland are entering the east room lets go to that picture and listen in. Thank you very much thank you. Look at all the press you attract, do you believe this i guess they are not after me i hope not, youre lucky. Thank you very much, today its my honor to welcome the president of fin land to the white house. Mr. President , its wonderful to host you once again in washington weve gotten to know each other over the last period of time, and its been a great experience the president and i have just concluded very productive discussions on a number of exciting opportunities for our two nations. Before going further, i want to express our deep condolences over the horrific stabbing attack that took place yesterday at a college in finland. America is praying for the victims and their families and we send our unwavering love and support. The american and finish people are lynched by an unbiding government, individual rights, democracy and the rule of law. This past may our country celebrated the 100th anniversary of americas recognition of the independent nation of finland in 1919 as president wilson wrote, our recognition was prompted by our sympathies that caused our own declaration of independence in 1776 a century after we establish established our alliance, our nations close cooperation on defense. Finland is not a member of nato. We can save a lot of money finland participates in many Nato Missions and exercises and im pleased that finland is substantially increasing its military budget. America and finland are working together to advance stability freedom of navigation and respect for National Sovereignty in the arctic. Both of our nations are commi