Of the retail trader, the little guy, could be causing more volatility in the market and talk about getting real. One top angel says the beaten down resale retailer, the real real, could be about to make a comeback. Hell be here to explain why hes so bullish. Power lunch starts right now stocks are selling off. Right now, the dow down b about 300 points nasdaq down nearly 2 . Major indices on track for their worst week in february take a look at gold. Lots of eyeballs on this one today. The precious metal is on a wild ride up 8 already this year and near ly 2 today. 16. 49. The defensive tone is evident in todays market. Those momentum names that trade is is unwind names like b facebook and amazon down around 2 the Semiconductor Stocks are also getting hurt today. New lows for a basket of Energy Stocks including exxon, marathon oil and noble energy a political unrest in libya easing there afore oil is given back some gains, plus energy estimates for the First Quarter continue to fall whats working for the market deere. Strong earnings, conservative guidance, but the ceo says former confidence has improved thats enough for the stock to hit a new record high. The 30 year bold yield touching an all time low and are Rick Santelli is tracking the action for us at the cme hi, rick yes, tyler, and 30year bonds are still below that low and thats the key issue there now lets go to the white board because theres something important going on here. If you look at one week of ten year note yields, we were closed on monday. 158 was the high but since we closed last week at 159, were now at 146, were down 13. But look at boone deals. Obviously they were open on monday they close d at minus 43 today. Minus 40 last week only down three, which means the difference between tens and boons has narrowed to the narrowest level since the fall of 2017. Finally, to the charts on the screen if you look at a july chart for tenyear note yields, you see why 145 is so important. Its the low for the cycle establish ed in early september. Right now, were a little above that i cant stress how important that closes on a week, which side of it 30year bonds, that ship seems to have sailed 195 is that point at the end of august did you see on the chart, but right now, 191 it really doesnt look like its going to be as chose as tens and finally, the dollar index. After having 12 of 14 up sessions, today is a big down session. Down over o half a cent, but its still actually up a little bit on the week. Tile leh back to you. Thank you very much larry kudlow saying dont panic about todays selloff. I just think in general, i would be very careful to put too much emphasis on what bond rates are doing or Interest Rates or doing or even in the short, short run, the stock market. I think youve got a lot of mood swings here and i dont think it reflects the fundamentals. So what are the latest monday moves signalling lets bring in Scott Clemens also with us is ron insana, Senior Adviser to schroeders north america. A cnbc senior analyst. Welcome. Scott, is larry roight should we not be worried about whats happening in the stock market i think hes mostly right i grew up as a equity guy on wall street but developed a healthy respect for the bond market the fact of the matter is you rarely need an optimistic bond trader so the bond market always is a glass half efforty type thing. I think its sending us signals its an economic slope because of covid19 or Something Else remains to be seen. We think the its a shortterm patch of weakness. Well move out of this ron, the same question. Is larry right are we wrong to overestimate what the bond market is saying but as scott just mentioneded, we are in the middle now of apparently more blossoming cases of this and you look at some of the Economic Impacts of that and it seems to me that the First Quarter and maybe the second, the numbers are going to take a hit. Well i think thats really important. I think this is now going to be a first half of the year event thats disrupting the supply chains coming from china and most of asia now south korea, taiwan, you know, japan contracted even without the impact of the coronavirus by more than 6 in its fourth quarter. That was because the National Sales tax put in place i want to split hlarrys comments, number one, no, you should never panic if youre longterm investor with a disciplined program. Two, i think you might be underestimating what the bond market is telling us simply because its not just the bond market. Utilities are up 8 for the year as a group gold is surging. Bond rates are down. The yield curve has inverted again, ten years to three months, so i think youre getting more powerful signals from defensive sectors of the market that would suggest this might linger for a period longer than wed anticipated and two, the Global Economy itself might not be in the midst of that rebound that was taking place a few short weeks ago. Scott, talk to me about what ron just identified there. Its not just the bond market. Its other sectors that have been doing well. Thats number one. Number two, we were talking in our pod earlier, there are a will the lot of businesses cutting prices and giving away stuff basically. Look at the Financial Services business look at whats happening in streaming. The prices are coming down this may suggest businesses in the last gasps for air of an Economic Cycle it could be, but i think theres a secular trend here as well and i think people will earn pafs trying to understand why over past ten years with Monetary Policy as easy as its been, theres no great ee eer inflationary pressure. Stagnate. I guess theres already a word for that but i think a lot of this has to be in the yet fully understood dynamic of technology and how it brings down not only the price of goods and services, but the price of delivering. Its difficult to measure, p particularly when its tech lodge kachlt but its there and real good point. Ron, what would you argue i would argue that same point, plus two other factors. So you have deflation then you have especially sodic deflation. When you get these crises over time, they tend to disrupt what had been b the inflation picture. I think broken the phillips curve that low unemployment produces higher inflation. I think thats a broken relationship and for not just the reason that was stated, but for other reasons, this is a c secular phenomenon and it does leave policymakers in a bit of a lurch because as layla said earlier in the week, at the next recession, they have to get very aggressive the only thing about that theres another way to look at it which is this is just a drawn out cycle. The rate doesnt capture the fact we are still bringing people into the labor market so its not that the curve is broken we havent gotten to the point thats generated higher wage gains. There were a ton of regular laces piled on the economies and as theyve started to come off under trump here, other president s elsewhere, thats generating a lift in growth, but you dont have the imf out there calling for deregulation but the one thing id argue, kelly, i saw your guest previously from the council of economic advisers, the notion this economy is different than the one before, job growth in the first three years of the Trump Administration is slower on a monthly basis than in obama years. Gdp is roughly the same. Because of the demographic issues, youre not getting a massive return of people into the labor force the Participation Rate has remained somewhat stag nat immigration as Mick Mulvaney may have hinted, is extremely important. We have to grow the size of the population to increase gdp growth so i think there are a lot of things going on. In the shorter term, however, this coronavirus weakness in japan and disruptions in production are going to be a six to nine month event thats going to force efb to lower their gdp estimates and possibly their earnings and this hiccup were seeing in the financial markets. Thats an interesting point let me conclude with you, scott, if i might what would it mean, the United States optimism is at an all time high. Never, ever been higher. What would it mean to the United States economy and to the Global Economy if chinas economy has a zero growth rate in the First Quarter in the first half . Zero. Not much is the qualitative answer quantitatively, we figure its 0. 1 to 0 tnt 2. If were wrok, heres how. I think people are so positive because they look at their own paychecks and job security but theyre still going out to dinner the movies, the mall if god forbid when covid hits here in greater strength and people stop doing that, thats when the impact on the u. S. Economy is much bigger were a very domestic economy. We are. Scott, thanks. Good to be with you. Ron, thank you as well thank you coming up, momentum names including tesla, Virgin Galactic are taking a breather. Are those in jeopardy . Well discuss. Plus, one stock bucking the trend is the real real its rohrecovered from recent l d ttg gred ltalk to the analyst who made that call next on power lunch. Worked like that. Well have you tried thinkorswim . This is totally customizable, so you focus only on what you want. Okay, its got screeners and watchlists. And you can even see how your predictions might affect the value of the stocks youre interested in. Now this is what im talking about. Yeah, itll free up more time for your. Uh, true crime shows . British baking competitions. Hm. Didnt peg you for a crumpet guy. Focus on what matters to you with thinkorswim. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. The real real is bucking the trend for the resale retailer. A cnbc investigation back in november said that not every luxury item was actually authenticated. Since then, the stock is down b about 30 . The company has been fighting changes to fight back against fakes on the website joining us is aaron kessler, Senior Vice President of Equity Research at raymond james. Why are you so positive on the realreal now. Trends have been positive since the ipo. Youve seen gmv growth 40 plus. Nice improvements in operating 15 points of operating leverage improvement last quarter and at the time of the ipo, we thought the stock was. Its been down b about 30 , but we think around four times enterprise value to gross profit multiple, below the industry marketplace averager on five times. We think it has come down at a point where we could start buying at these levels we think valuation is comeing about 30 the stocks around 16. 50 right now. The average price is 25. Youre at 21 thats a decent amount of upside, but how big can this company get . How profitable do you think over time still a long run when we look at the resale markets. Real just Getting Started. If you look at the size of the luxury market, you have roughly 90 billion per year sold in the u. S. Theres been a study, about 200 billion could be available for resale over the next five years. If you look at that, about 40 billion of resale. The real real is the number one player in the space and theyll do about 1 billion this year. So about 2. 5 of the market being sold to the realreal we think they could become a much larger player can you trust the merchandise . Its been a question. We got a few questions from investors on that point. Theres some data the Companies Put out in october that suggest theres about 500,000 items they processed. Of those, about 20 were return ed any commerce category, youre going to have some fakes the return rate is less thap. 1 weve had pretty good, if you look at other sites in industry in terms of potentially fraud, but we think theyre best in class in terms of isdentifying fraudulent items to that point, you responded by improving the processes somewhat, maybe hiring more people reminds me of the fang companies, hasnt stopped those stocks to be sure, but could higher expenses be a hurdle for the realreal over time its always a risk, but we think what they are doing is starting to automate some of the functions like copy writing. Theyve had them do some identification with the fraud detection and by automating some oof these areas, it frees up more time for authentication work as well so we think some of these automation processes theyre going to be doing over the next couple of years will be a positive for margins and freeze up more time on the awe thentification side as well. Apart from local shops, who are what are the competition sites like ebay, we think a lot of players can benefit in this category. You have posh mark, thread up, also as a mass market player we think its a trend thats going to play out. Were still just Getting Started online and think its going to be a much bigger category in a few years. We appreciate it u. Thank you, sir, for joining us today coming up, much more on todays market declines. Were being led lower by technology, energy and Consumer Discretionary and next week, well learn a lot more about the health of the consumer as several big name retailers wort their results. So which of those stocks should u y w . Thats next on power lunch. Dont get mad. Get e trade, dawg. The new rx. Crafted by lexus. Lease the 2020 rx 350 for 419 a month for 36 months. Experience amazing at your lexus dealer. The unparalleled landscape of park city, or the famed peaks of whistler, youve faced the hassle of lugging your gear through the airport. With ship skis, youre just a few clicks away from having your skis, snowboard and luggage shipped from your doorstep to your destination. With unrivaled pricing, real time tracking ship skis delivers, hassle free. Ship ahead and go catch those first tracks on fresh snow. Ship skis. Your skis. Delivered. When yowhat do you see . Itical issues facing our world, we see a billion more people breathing free. We see access to fresh food being the global norm, not the exception. We see homes staying cooler, without the planet getting warmer. At emerson, when issues become inspiration, focusing core strengths to create a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Welcome back get ready for a massive week for retail earnings. Next up, macys, home depot, tjx, foot locker, all gearing up to e release their reports lets bring in your trading nation team. Steve, things are good in consume r land, arent they . Looks good. Unemployment at a 50year low. Look at the 30year yield today. Oil prices that are benign so the consumer looks healthy. For those companies that are on trend, have a Good Shopping experience, theyre going to do well and those companies that are a little bit more obsolete are going to struggle. Thats been the story for the better part of the last couple oof years but the exhumer looks strong youre speaking e liptically there, steve so what are you driving at there . Companies that give the shopper a good experience versus those that dont i assume that means ones whose merchandising is good versus ones whose products is more xhodtized Like Department stores its the quality of the product. If youre tied to housing, thats strong. Athleisure is strong then are you convenient. Is it convenient to shop with you or do you have a store eck appearance thats attractive lululemon or t. J. Max have had attractive kind of store experiences. If its the same old bland product delivered through the same old Bland Department store, then maybe youre not doing as well all right, craig, take us through the charts do they confirm steves overall hypothesis well, tyler, when i look at the charts, price is fact and less than half of these names are outperforming the s p 500 year to date now two of these companies that look interest iing to me is firt and foremost looking at the chart of o best buy. If you unpack that chart, heres a stock thats making new highs. Its broken out. You can see that on the earnings announcement, you can probably see an implied move around 7 , but ultimately, i could see a measured objective that could push the stock hire from where it is. So we like the chart what we see with best buy. Second chart to take a look at would be home dee toe. Another stock making new highs its in a nice upper trending price channel. If you see a move to the upper end, it could put it up to 160, 165. So those are two stocks id be buying we want to own the home builders, play some other names online and avoid other retailers. Thank you very much have a great weekend and for more trading nation, head to our website or follow us u on twitter. Ahead on at power lunch, Growth Stocks getting hit hardest today, but investors have been pouring tons of cash into the momentum name this is year well explore if the run can keep going plus hard seltser sales surge ing and the big brewers want to cash in. Their plans are next and has disney plus already hit its pique . One analyst seems to think so. One explain when power lunch returns. Now, we know the trump strategy try to win by attacking, distorting, dividing. Mr. President it. Wont. Work. Newspapers report bloomberg is the democrat trump fears most. As president , universal healthcare that lets people keep their coverage if they like it. A record on job creation. A doable plan to combat climate change. I led a complex, diverse city through 911 and i have common sense plans to move america away from chaos to progress im Mike Bloomberg and i approve this message. Heres your cnbc news update u. S. And afghan officials announcing a sevenday period of reduced violence beginning at 2 30 p. M. Eastern time its part of the signing of a Peace Agreement between the taliban and the United States aimed at ending 18 years of war in afghanistan iran is attacking saudi port facilities in the port city. This just hours after mike po pompeo