Transcripts For CNBC Closing Bell 20140124

Important for every company that exports to that country. If they slow down exports to that country will slow down. Thats why its so important right now. And underlying a lot of this is this debate about liquidity versus fundamentals. Here is how we stand in the markets. The dow is near session lows off 256 points at this juncture. I believe the lows today were 262. And were heading back to that right now. Look at that. Decisively below 16,000. Speaking of at least round numbers, the s p 500, 1797. So we are below 1800 having given up about 31 points today or 1. 7 . We cannot emphasize too much that 1800 number what that means to traders. Its very important. Theyre watching that very carefully on the close today. And finally a look at the nasdaq which interestingly enough is the laggard today. Despite juniper doing a little better. We have the composite down 71 points. Lets talk about this selloff and put it in perspective with our guests today. Weve got Quincy Crosby from prudential financial, david sourby from loom missales and company. Kyle harrington. Peter boockvar from lindsey group, and warren myers from illustro trading. Warren, give us the play by play, the perspective from the floor. Whats going on . Ill tell you, you know, the one thing i will say up front is there is no sense of real panic, so i dont want people out there to say that the world is coming to an end. You know i think so many people have been expecting a selloff for so long that once we had a couple days in a row of a down market i think this has been kind of feeding on itself and i think thats really all you really have seen on the floor. Yes, its an accumulation of a few events. I think the surprise events were the emerging markets and china a bigger impact than the earnings in the last couple days but i think those three combined are whats driving the market down but its in an orderly fashion. Quincy lets talk about china. Is this what is ailing the market more broadly . Is it because of that data . I think it had more to do with the worries over the credit markets in china. The shadow Banking System has been something that the chinese authorities are trying to wean investors off of those high returns. Theyve had a problem with a couple of the funds and also there is worry that the chinese authorities will not necessarily go in and bail out every single product or lender who is using the shadow Banking System and thats going to cause a lot of come motion commotion in markets. The fact of the matter is i think that is what scared the markets more than the slowdown. We know that china is slowing down by design. Peter boockvar, were going to talk more about this later, but let me ask you your view of the fed. All the easy money the last few years has helped to fuel the rally weve seen. Now we know theyre going to start pulling back beginning this month. Do you think when they meet next week that this selloff might give them pause in that tapering as we call it . Well i think the tapering is whats causing these problems or at least is revealing them. So i think if they did stop that would prove to the world that theyre completely trapped in a policy that is not working. So they are going to taper, but weve seen this movie a few times. It happened after qe1. It happened after qe2. It happened last summer when they hinted at ending qe and this is happening again. So investors shouldnt be surprised. But peter, isnt the point that that indicates not that what the fed is doing doesnt work but that it does. In other words in order to keep markets functioning the way they are at these levels it requires them to continue having sort of an easier stance than what theyre trying to do now . Its an artificial edifice. Its a building thats made on sand. Once they stop, with he see what happens. We roll over again. This is not a Firm Foundation for an economy and markets. The fed has brainwashed investors to think that investing is a riskfree thing when theyre doing qe but once they step away people realize that, hey, wow, buying risky assets is a risky venture. David, what do you sense is going on right now in the markets and what are you doing about it . Are you putting money to work or are you standing back and letting this thing settle out . Bill if we get another if i have cash on the sidelines and its minimal at best you could expect another 3 to 5 quite easily on the pullback. I would want to put that to work because the statistical empirical evidence strongly suggests even after a great year like 2013 where stocks handily beat bonds, stocks do surprisingly well in the next calendar year like 2014, especially if we dont get a recession. Valuation fundamentals are still fine. Earnings and revenues so far for what i have seen for 20 of the companies that have reported in the s p, they have done well. But here we are, were painfully aware of the january barometer as january goes so goes the market. This is nothing different than fumbling the kickoff in a super bowl, but you have a long way to go between now and december for this calendar year so i would be putting money to work yes. And i do worry about the fed, that they are falsifying the economy, but i think that that will not be a major issue. Peter, just to go back to this issue again here if the market is pushing Central Banks to provide more liquidity and maybe saying look its not just the fed, its the fact that banks in europe are repaying some of their money and the Balance Sheet there is shrinking, the uk has surprised to the upside the bank of japan. How important is it that someone steps up to the tage here . Ble here . Well, were seeing that in other Central Banks. Japan is obviously increasing theirs. That potentially is a factor in global markets, but it just proves again the dependency and the addiction that Central Banks have created with markets and the economy, and that the second they step away everybody cries like a baby. And the question that was broached earlier is does it impact what the fed does next week . Were going to it shouldnt. Over the next couple meetings whether the fed is going to be the parent that says to the kid, no more candy or theyre going to listen to the kid thats crying the kid being the market and saying okay here is one more piece. Kyle harrington its clear the sentiment in this market changed on january 1st. We had a great year in 2013 and its been a very sloppy market to begin 2014. What do you think is going on right now in your view . Well i mean this should come as no surprise bill and kelly. To me its not. This marketplace in my mind was not built on firm ground in 2013 when it ran up to the tune of 30 , and this week is the worst week since november of 2011 and i think that, you know whats amazing to me is the interconnectivity of the marketplace. So you saw chinas manufacturing data be disappointing. You now saw are ajengentina not stand by their currency in the peso and earnings reports coming in soso and off marketplace in the United States where theres 20 names that are in the green today in the s p 500. So and the fed concerns coming up in the near term is and should be of real concern. All right. Lets bring kenny in. He just stepped in from off the floor. What do you sense is going to happen between now and the close . What are you guying thinking about here . My sense is that they want to close it on the lows here, although its a struggle because theyre my guess is theyre going to try to close it right at 1800 you know plus or minus, but if it closes at 1800 psychologically it looks different. What if they dont close above 1800. Either way its setting itself up for further weakness next week. You can get a sense today, although its certainly not panicky, people are reassessing the rick out there. What is the fed going to say next week . Theyve already floated the idea of wanting to increase the taper. I dont think thats happening but yet no one really knows that. So people are being a little more cautious taking money off the table in case you get a spike down next week they want to be able to take advantage of it. Do you agree, warren . I do. I mean i was looking at the market on close and balances early, and they were pretty neutral. I dont think youre going to get too much of a push either way from that. I think 1800 ong the s p is a key number psychological. At the end of the day i think the damage has been done for the day and probably setting the tone as kenny just said for the beginning of next week. I do want to stress everything is calm and orderly here and if you keep your head and maybe thats either a good for bad thing depending how you look at a selloff. Thank you, guys. Thank you. Have a good weekend. Thanks. Got about 50 minutes as we head into the close and match markets sitting near their lows of the day. One of the worst days weve had for the major indexes. The dow off 245 points at this hour. Lets talk about this will it selloff on wall street force incoming fed chair janet yellin to halt the tapering for a little while . In fact could it make her even increase the stimulus untaper so to speak . Well talk about that. How much blame should chinas weakening economy get for this sea of red . Its an important issue. Well talk about it next. Keep it right here. Youre watching cnbc, first in business worldwide. [ male announcer ] this is the story of the little room over the pizza place on Chestnut Street the modest first floor bedroom in tallinn, estonia and the southbound bus barreling down i95. This magic moment it is the story of where every great idea begins. They had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment welcome back. Another big selloff on wall street today. The dow is now down for a fourth straight session and has declined nearly 3 this week alone. Dom chu is sifting through the charn carnage back at hq. Kansas city southern is the worst performer plummeting after posting weaker than expected Fourth Quarter profits after weakness in its Energy Business including lower coal shipments. A tough day for google. The Gmail Service was experiences outages during the course of the day, and then gaming stocks being hit hard again, after jpmorgan report yesterday that macao gaming growth was possibly slowing. The transports are experiencing their worst day in nearly nine months. Airlines are leading the way lower, jetblue, delta, United Continental, american airlines, all you can see to the downside. On the flip side though theres proktor gamble. Its moving higher after Second Quarter profits beat forecasts by a penny. They said they expect to see second Earnings Growth in the second half of the coming fiscal year. Slowing Economic Growth this china part of the threeprong attack on the stock market. We have John Rutledge, chief investment strategist who has traveled extensively through china. It started with this manufacturing report out of china the other day and the market started to sell off at that point. Is that really what this has been about just the fears about the growth rate in china . Well no. I think it started at the beginning of the year when we saw a lot of the emerging market currencies decline due to the fact that the fed started to taper. What we had was twopronged approach where we had the fed withdrawing stimulus as well as the fact that china pmi slowed. If you look at the top trading partners of argentina and some of the countries that are having the biggest currency fights on their hands right now, the top three is basically china, the United States, japan or germany depending on which emerging market youre looking at. So thats a doublepronged assault on those emerging markets. We saw a lot of vix buying. I dont think people are selling stocks. What theyre doing is hedging in the vix. The vix went up to 17. As well as selling the futures in the e minis. We use that 1835 series a pivot premartin luther king day. The yen strengthened and the correlation there was very high. We think right now this is playing out just as expected. John rutledge explain to people what this is really all about then. What has been the catalyst for the selloff . Well people have an itchy trigger finger at the moment and to paraphrase yogi berra, investors want to be pessimistic, nobody is going to stop them. So i think weve had this is mainly sentiment driven but to echo what my colleague is saying theres a huge carry trade element to this. The fed and other Central Banks have been forcing developed country Interest Rates down to zero for a long time which means investors borrowed money in these currencies to invest in the emerging markets to capture the spread. As the fed pulls out of tapering and people start figuring out theres still a lot of reserves out there, the u. S. Rates are going to go up. Europes growing, japan is growing now, which means people are shutting down these carry trade positions. So you see big drops in emerging stock markets and in currencies and also in the commodities that depend on them. I think the reduction in the china manufacturing report was really minuscule actually. Actually the level of Manufacturing Activity in the report is still growing. Its the outlook thats now a little bit below 50. Its mainly a financial issue, not a fundamental growth issue. So were unwinding essentially the gains we saw in the markets because of the easy money policies of the fed. John, how much lower do you think we go especially if we close below 1800 on the s p today . Well i think right now were in the a 1 move right now is a lot different than it was at 1,000. Were looking at 1 moves were moving the market 200 points and 20 spot points. So we dont think that the downside is too critical. If we look at 10 , thats 1662. So what i wanted to say was if we look at the mexican crisis the russian ruble crisis every one of those in the 90s was a buying opportunity. So no matter if the correction is 3 5 6 , all those corrections were bought heavily because everything fundamentally in the United States is fine. So if we close our eyes and say you didnt have fed intervention in those previous currency crises. You did after the crisis happened. Thats not true. We had fed intervention in the fact they lowered rates and started to raise rates. But to the degree were having right now. Other thing i want to say is the fact that were so worried right now and if we look back in time, those again were buying opportunities. If we close our eyes and say that growth in the United States is 3 and the fed is still adding 65 billion we hear you. Sir, we hear you. Bottom line bill i think that this is going to spook the fed out of more tapering this time around. And there you go. The same thing happened to greenspan in 98. Go ahead, John Rutledge. The same thing happened to greenspan two johns sorry. The fed does not announce more papetapering and theres a change in the character of growth where the developing countries are growing and the emerging markets are slacking off a little bit. Developing countries dont buy commodities. So this is also weak for Commodity Prices but i suspect next week finally i get to buy some stocks again unless remember prices today are still 40 higher than they were two years ago. But just to be clear, John Rutledge rutledge, because a lot of people including john are saying this is a buying opportunity, but in each of those prior cases when for example a rebound in the yen, an unwind of the carry trade, caused a crisis you didnt want exposure until after the crisis hit. How do you know whether were going to head down a similar path or not . Are you that confident that next week already the sands will have shifted . I think that there by the time the fed finishing taper, there will be 3 trillion of undeployed excess reserves in the banks. Those reserves pushing into the asset markets is the fundamental for us lifting dollar asset prices. Those are not going to go away. In fact, that number will be bigger six months from now than it is today. All right. Got to go, guys. Thank you both. Have a good weekend. Okay. We have agreement there. Well stop right at that point. See you later. 40 minutes left in the trading session, and were starting to set new lows for this day. The dow now down 266 points 267, and the s p continues to fall below what is considered a critical level of 1800. Were at 1795 right now. Thats right. Bonds are rallying big time today as well as stocks keep selling off. It makes sense but will this correlation last and which is the better place for your money right now . Both sides of that debate are coming up next. Also we want to know how you think investors should be playing this market right now. Tweet us your thoughts on that. Well reveal your best responses later on the closing bell. [ male announcer ] the new new york is open. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. Welcome back. Want to send it straight over to dominic chu for a quick market flash. The dow transports worth another look because they are now down session lows 4 on the day. This is the worst day that theyve had, the dow transports since september of 2011 down 4 . Big names, kansas city southern, United Continental and the Airlines Delta air lines, kirby. A lot of big transport names leading to the downside. Worth noting as we head towards the close, the real weakness in those transportation stocks. Back over to you guys. I think it also bears repeating that Natural Gas Prices are up what 9 10 today. Absolutely. Nat gas up 24 just this year. A lot of the cold weather, of course, but weve got demand its going to be a higher cost for consumers and producers that benefit from generally much lower Natural Gas Prices. Thats it up 10. 3 , almost 10. 4 just today. While most predicted this would be a tough year for bonds, turns out it was too soon to tell. Just take a look at the chart. The muni bond etf, Exchange Traded fund, other bonds, theyve outperformed the stock market, and for a while both stocks and bonds were a good bet. Now theyre sort of going in opposite directions which is more historically normal. So whats the better investment in 2014 . Stocks or bonds . Lets ask john stolfus and michael gied. Both here as the markets are selling off so sharply today. Just got to ask you, john, do you stick with equities here . I think you absolutely stick with equities. This is part and parcel for the First Quarter of the year. We usually have some kind of a stumble. You establish an opening trend. Everybody thinks thats the way its going and then you have a little drama. We just finished a year up 30 . You have china heading into the lunar Holiday Season thats traditional season. Everybody always thinks a hard landing is around the corner when that stops. You have bonds in the process of facing normalization of Interest Rates. You think thats intact . I think its intact and Global Growth is on the way. This normalization growth has to be countered with addressing Inflation Expectations. Look, emerging markets are a symptom. The real core of the issue is deflation. Make no mistake about it thats why were not seeing yields rise. Thats why were seeing tips starting to show weakness against nominal bonds. Thats in general i think could you see a rocky period ahead. For . I think for equities. You have this massive disconnect between what u. S. Stocks think and but why now . You have been talking about deflationary problems for the last year. The fed is concerned about the lack of an Inflation Expectation in this economy, but yet even as that discussion was going on in the past year stocks were up 30 as john was pointing out. So why the selloff now . I think the market is starting to realize the demand pull wealth story is nonsense. They badly started underperforming after the payroll report. The market is replacing the Federal Reserve. This is a very Important Development thats happening here. Unless you see a real pickup in Inflation Expectations i dont see how anything is going to hold its gains from last year. Last year was an outlier. This is a classic risk off period. But the low point for Inflation Expectations if you want to tell that story was in the spring of last year and if you look at whats happened so far in 2014, they havent budged. In other words, theres not the same sense of fear we had last time around and i wonder if that doesnt put the fed in a corner here as the better relatively better unemployment picture means there could be a little more wage and price pressure than we might have seen in the last couple years. If that were the case you would see it reflected in consumer stocks. Youre talking about wage inflation. Those consumer stocks which have been stellar leaders are now looking like theyre turning around. It has nothing to do with turkey or china. Its a u. S. Specific issue. Credit spreads are widening. Thats not what the fed wants to say. That said though this is a nearterm transitionary period. I mean well agree with the deflation story. Thats one of the reasons why Central Banks around the world have been operating in concerted and parallel effort for a long time, but related to the consumer, for example, the consumer had a cold spell, there was a loss of confidence. You had obamacare. You had the increase in the payroll tax from last january. It was amazing how well the consumer has done and our expectations would be that the consumer will be back once they regain some confidence as we move forward in the year. So youre willing to sort of make it through whatever this pullback is going to turn out to be, you would be buying as were going down here . I think one of the biggest risks is that you miss the dip and i think weve got a dip in here that is likely a buying opportunity. I stick with cyclicals. I prefer to get paid while i wait with cyclical dividend payers, but on the other hand you know when i look at bonds, i think perhaps municipals look good because its a higher tax society today, but otherwise ill stick with stocks. Thank you both for your thoughts on stocks and bonds today. See you guys later. And the happy talk hasnt done much to help the market here right now with the dow still off 270 points. Thats 1. 66 . Were seeing consistent declines across the s p and the nasdaq. Well talk the fed. This ought to be interesting coming up. Will incoming fed chair janet yellin have her hand forced by this ugly stock Market Making her perhaps reverse the stimulus tapering that ben bernanke has begun . Were going to sort of debate that issue coming up. Also got to talk earnings. The fears about the guidance has been a big catalyst in this weeks selloff. Next week the earnings bonanza does continue. Apple is on deck for monday. What will it mean for the direction of the market . Well talk earnings coming up in just a bit on the closing bell. Humans even when we cross our ts and dot our is, we still run into problems. Thats why Liberty Mutual insurance offers accident forgiveness with our auto policies. If you qualify your rates wont go up due to your first accident. Because making mistakes is only human, and so are we. We also offer new car replacement, so if you total your new car we give you the money for a new one. Call Liberty Mutual insurance at. And ask us all about our auto features, like guaranteed repairs, where if you get into an accident and use one of our certified repair shops your repairs are guaranteed for life. So call. To talk with an Insurance Expert about everything that comes standard with our base auto policy. And if you switch, you could save up to 423. Liberty mutual insurance. Responsibility. Whats your policy . Tte or au lait . Cozy or cool . Meow or woof . Everything the way you want it. Until boom, its bedtime and your mattress a battleground of thwarted desire. Enter the sleep number bed. Designed to let couples sleep together in individualized comfort. Hes a softy. His sleep number setting is 35. Youre the rock, at 60. And as your needs change over time you can adjust your bed to sleep better together. 48month financing available through february 2 only at your local sleep number store. Find your sleep number setting and know better sleep. Buckle up. This could be interesting. The markets are having their worst week since may of 2012. Could the selloff cause the fed to rethink tapering the monetary easing . Gregwith us our own Steve Liesman and from the bond pits mr. Rick santelli. Steve, first to you, how likely is it if things are really starting to get ugly out there that the Federal Reserve changes course . What would it take . I think what the fed will do is analyze these events in terms of whether or not they create Systemic Risk for the Financial System in the United States and globally, whether or not we have a potential to impact real aggregate demand. I suspect the answer to both questions would be no. If they were yes i think what the fed would do in that case would be to try to do what its been trying to do over the past several months which wouldis to lean increasingly on greater Forward Guidance and stay the course on taper. All of that is a long way of saying i think its going to take an awful lot to get the fed off of its course of reducing by 10 billion a month. I think you agree, greg. Lets face it you have to expect some market dislocation when the fed changes its strategy. Its the strategy that got us here and when they change course the markets might change course as well right . Yeah absolutely. Bill, weve been talking about this for months now. I think the big mystery is why we didnt have this correction sooner in the face of the winding down of one of the most aggressive monetary stimulus plans in history. Im totally with steve. I think there are two circumstances under which weak markets would pause the feds hand. Number one, if the decline in the market is so severe that its a systemic crisis in the making like in 1987 or 98 or if its symptomatic of a worsening outlook. I dont see the fed sees the evidence that the weakness in the evidence is telling us anything broader about whats going on in the economy. This is interesting about the timing point that greg brings up, right . Because we did see a little bit of a freak out in markets in last june. It was eerily similar to what were seeing now, vix spiked emerging markets are routed. We were seeing pictures of what happened across the country front and center on wall street across the world front and center on wall street. Does that means everyone just needs to buckle up or does it mean at some point if it gets bad enough they will be forced to respond . My feeling is first of all, lets take one comment you made about the vix. As interesting as options are, if viewers out there have a near death experience my guess is theyre going to increase their Life Insurance but it doesnt mean they know what day theyre going to xidie. Volatility, it doesnt surprise me its going up. B, when it comes to the Federal Reserve, it isnt just the Federal Reserve. Its Central Banks everywhere and on the Forward Guidance issue, you might as well put those goalposts on gocart wheels. They have changed thresholds theyve changed because in the end it really isnt about those metrics. Its about programs that have outlived the crisis and, see, this is why they werent a good idea. If we do get near crisis where is their encore performance . See, the issue with Central Banks is that they always overstay their welcome because its a bureaucracy, not a profitdriven enterprise from a psychology standpoint. So they want to stay until everything looks perfect. Everything never looks perfect, but the problem is if these programs ended a couple years ago and we had this maybe they would have some wiggle room. But i still stick with the idea that they have the programs cant go on forever, and i think markets are very attuned to that and i think that whats going on in the world isnt only that. I think you do have to look at china. Theres a lot of issues here that are all meshing at the same time whether its rates never coming down many people not trusting the numbers in china. Sen pral banks really ought to take a backseat and if they have to get involved i really dont know to the extent they could make a huge difference. One thing you might imagine happening is long rates go up because theyre not buying as many bonds see, i have never bought into this. Well but my point is go ahead. The only hedge for a stock market that gets in trouble, said it on your show a month ago, the only hedge is treasuries being purchased, and as strange as that may sound, its no more strange than having record deficits when Interest Rates hit historic lows. And, steve, here is what i wonder. If the last time around that we saw some of this volatility back in the summer, that period passed, things looked okay through the end fltof the year, was that all because the japanese story was working and people could use the carry trade and the same thing will happen again or is there a sense in which this time around the story starts to unravel and it forces more of a response . I think theyre very different and i think whats happening right now, rick was talking about the tenyear yield declining. That engenders a different sort of nonresponse from the Federal Reserve because what is it that they want after all . They want lower Interest Rates to help the real economy. And to the extent that those real Interest Rates have been declining and are lower amid this episode, it will engender less of a response from the Federal Reserve. What happened back in may was that they had to come off when they saw this huge rise not necessarily only in the tenyear but it was really the rise of the two that made the fed the most concerned. The two and below that made the fed the most concerned. I would say its a different set of circumstances. And i also think its a different set of circumstances compared for example to 1998. I think the Economic Situation is fundamentally better underlying it than it was back then. Very quickly, do you expect the fed to say next wednesday that theyre taking 10 billion more off the table in their program . I absolutely do bill. I think that the bar to going off this taper is very very high. Number one, it just takes a lot of prepping the market to shift this thing. So if they paused or dialed it back this week, it would be a big hassle to dial it back. And number two, we know that fed officials have been saying that they think the marginal benefit of this program has been declining. Like steve, i think if they need to act theyll do it on the Forward Guidance with respect to shortterm rates. Such an interesting situation for yellin to inherit. Thanks guys. Heading towards the close. Holding near the lows of the session right now. The dow was down 279 at the low. Were down 269 right now. And once again it bears repeating, the s p is below 1800 which was considered very key support. Well talk about that coming up. And weve got earnings continuing to roll out. A big week next week. Thats how stocks roll over lately. The numbers behind the numbers and the impact on this market coming up next. After the bell Apple Earnings come out monday. It was 30 years ago today that the mac was revealed to the world. It didnt just change computing, it created a culture and products that simply revolutionizerevolution revolutionized the world. Later, one of the first reporters to chronicle it looks at the macs 30th anniversary. If you wear a denture, touch it with your tongue. If your denture moves, it can irritate your gums. Try fixodent plus gum care. It helps stop denture movement and prevents gum irritation. Fixodent. And forget it. I need proof of insurance. Thats my geico Digital Insurance id card gots all my pertinents on it and such. Works for me. Turn to the camera. Ah, actually i think my eyes might ha. Next Digital Insurance id cards. Just a tap away on the geico app. Huh, fifteen minutes could save you fifteen percent or more on car insurance. Everybody knows that. Well, did you know that when a tree falls in the forest and no ones around, it does make a sound . Ohhh. Ugh. Geico. Little help here. Welcome back. Another big selloff on wall street today. Earnings reports are seen as one of the culprits. Sheila is joining us with what the latest string of reports are really telling us. Sheila . We have literally been combing through these transcripts reading the socalled earnings tea leaves and the first thing we found, a word we saw a lot of especially when it came to retail disappointment. Coach, for example disappointed in its performance. So was best buy, five below, elizabeth arden. Investors showing how much they didnt like the word and, in fact, all those stocks saw a lot of earnings pain. The number two theme we saw, china. Despite all the macroconcerns about chinas growth it has been a bright spot for several companies so far. Double digit growth in china, even coach had a 25 growth rate in china. American express, general motors, both companies saying they saw a lot of strength in the region. Gm opening four plants in china through 2015. Finally, the last thing we saw a lot of, you know what im going to be talking about now, it is the weather. Blizzard, polar vortex whatever you want to call it it has been very, very cold. It has been snowing a lot, and that has impacted plenty of companies. We found more than 40 mentions of the word weather in transcripts so far and really in a wide range of companies. So from a restaurant like bob evans to u. P. S. To a retailer like dollarama. You can probably expect to hear a lot more about the weather. I have been outside today and its freezing. Yes, it is sheila. The interesting question to what extent its really weather or its weather. Art cashin just stopped by. The market on close orders are definitely heading toward the sell side. About 500 million worth of the stock to the sell side. Were down 276 on the dow. We havent had a 300point day to the downside since last june but it was only last june at the same time. Exactly. But to your point, the last time we had that kind of a selloff was when ben bernanke had sounded the alarm they may be tapering. Lets talk about it. Sheila is still around with us we have david darst from Morgan Stanley Wealth Management Senior Adviser there. Do we Pay Attention to earnings . Do we Pay Attention to the fed . Do we Pay Attention to china . What is an individual investor to do about that . Is it time to be selective, bill . The earnings beats have been about 75 . You have had 120someodd companies out of the 500 have reported so far. The big earnings beats, 88 have beaten in technology. 90 have beaten in health care. Both of which are sectors that we are advising people to put money into. Materials, 78 . So you want to be very selective here. You want to own Companies Like schlumberger. You want to own Companies Like halliburton, pfizer abbott johnson. Stick with some of the more defensive names in a time like this. They lagged last year a lot of these big social Networking Companies and all that took off last year. Weve said for weeks, you and i and kelly have said for weeks there was going to be a cloud. Shakespeare said sometimes the brightest day hath a cloud, and this is that cloud. We dont think its a serious earnings cloud. The forecast consensus, 8 for the Fourth Quarter, 5 for the first. So you will have time to buy later. Okay. 5 . Art cashin just walked by again. The market on close orders now 1. 4 billion to sell. The selling is intensifying. Were down almost 300 points and we havent had a 300 point decline on the dow since last june when the fed was talking about maybe beginning the tapering in september. Then they pulled back on that but this is very much a taper concerned market right now. Just quickly to sheila as we look at the nasdaq sheila and as you dig through the earnings reports, the weak guidance when it falls short is there a consistent theme there as to why . You know, a lot of people just say generally that the economy may be Getting Better but its not quite there yet. Of course, emerging markets has been a theme weve been hearing about. Also capital spending. This is going to be huge next week with caterpillar reporting earnings. Everyone listening to see how much money are these Company Actually spending . Are they actually putting that money to work out there now . Yeah. Caterpillar has been one to watch, having a day where its off almost 3 . Joy global as well. Were seeing those concerns reverberate. Sheila, david darst, great to see you both. Thank you very much. Have a great weekend. You, too. Heading towards the close. 13 minutes left. The dow down 290 points. The s p continues below 1800. A decline of 36 points. Well watch and see whether we can hold, climb, try to make some ground back as we head into the final moments of trade, but again, it looks like theres a lot of pressure on markets for this hour, and we want your feedback on how you are playing these markets. Tweet us cnbcclosingbell. Your thoughts on air at the close of the program and were back with much more Market Analysis after a short break. We know were not the center of your life, but well do our best to help you connect to what is. Eight minutes left in the trading session. The dow is down 1. 75 . The s p below a key support level of 1800. Weve been quoting art cashin through all of this. Lets bring the man in himself from Ubs Financial Services for his take. You made the case to both kelly and me a little over an hour ago why we could see an ugly close here today. Why . Well ordinarily friday is the best day of the week. Shorts tend to cover going into a weekend, but this is different because today were worried about currencies and nations use weekends to adjust their currencies. They usually do it on a sunday when no one around. So it triggers a run for cover in the meantime. They want to reduce their risk profile going into this for fear that one, two, or four medications may adjust their currency over the weekend. Were talking about not specifically but some of the countries that have been a concern this week argentina. You can go back to some of the Eastern European countries, maybe some of the asian names last time around that were a worry, art. Is it discriminant or not . Is there a sense of who or where to look . Well i think it is the difficulty is the possibility of contagion, and youre seeing a couple things. You saw the slowdown in china, the concern about their Banking System, and we saw that spread through the copper and other commodity areas. Now, today its interesting. We are certainly getting a slam bang selloff but five stocks in the dow provide about 40 of the selloff and they are names like caterpillar and boeing and United Technologies the high dollar stocks. Theyre not only the high dollar stocks but this five are a group who do a lot of business with emerging markets. Overseas exactly. Assuming we close below 1800 on the s p, what does that mean . Well i think it means that the bulls are going to have to do a lot of work to get things back in order. Thats some serious damage. Next week will be critical. You have the fed meeting. I lean on the side of at least very active discussion. Theyre going to take a look at these markets and say should we move further . Janet yellin does not like disruption historically so it will be interesting. It will be her Maiden Voyage so to speak. Well find out what happens. The wise sage himself. Thank you, mr. Cashin. Mi pleshy pleasure. We want to know how you think investors should be playing this market amid the selloff. Look at that sea of red. Your tweets and thoughts on the subject. Thats all coming up in just a bit on the closing bell. [ male announcer ] this is the story of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. And the little room above the strip mall off roble avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment humans we are beautifully imperfect creatures, living in an imperfect world. Thats why Liberty Mutual insurance has your back, offering exclusive products like optional better car replacement where, if your car is totaled, we give you the money to buy one a model year newer. Call. And ask an Insurance Expert about all our benefits today like our 24 7 support and service, because at Liberty Mutual insurance we believe our customers do their best out there in the world so we do everything we can to be there for them when they need us. Plus, you could save hundreds when you switch up to 423. Call. Today. Liberty mutual insurance. Responsibility. Whats your policy . [ male announcer ] once, there was a man who found a magic seashell. It told him what was happening on the Trading Floor in real time. The shell brought him great fame. But then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their Trading Platform. [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a. Shell. Get live squawks right in your Trading Platform with think or swim from td ameritrade. Last couple of minutes on what has been a big down day capping off a big down week for the u. S. Equities markets. Here is the dow today. At the low we were down 292. Weve come off that low right now with the industrial average down 276 points or 1. 72 , down more than 2 for the week about 2. 6 , 2. 7 . The s p is the one traders all watch, and the level theyre keeping an eye on is 1800 which many consider very key support. Thats what art cashin was talking about, and were well below that number right now at 1793. A decline of 34 points or 1. 9 . And as stocks go lower, volatility goes higher. The fear indicator has skyrocketed not just today but this week. Best week in a couple years for the volume lit inatility index or the vix, up 28 . Were back to 1766 bob pisani. That vix is in backwardation. Thats the cash contract its higher priced than the futures contracts a couple months out in february looking further out theyre expecting less volumeatilityvolatility. Thats right. In the past this when you get these in backwardation, the front month is really high and you get a lot of bounce sometimes in the market. Thats a pretty good sign. 1800 there are those who feel thats a critical number that they cannot close below. And youll notice when it hits 1800 in the middle of the day, it did drop. The market did take a leg down. So people say technicals dont matter. In this case is very clearly did when it hit that 1800 level, we hit a new leg down. Let me Say Something about the s p. I know art was saying a lot of damage has been done. The s p is only 3 off its historic high. I dont think thats great news but people ask me about the fed next week, bottom line is i would hope the fed is not going to stop its tapering program theres a lot of reason to believe they wont change their view. They cant let the markets dictate to them. I think it would be a sad commentary if they did. You have to believe they would at least talk about it. I think they should. Art made a good point, today the weakness most weak sectors, materials and industrials, those are the ones most impacted by emerging market weakness. Next week a huge slew of earnings coming out. Apple starts the parade on monday and capping off the end of the week you have the jobs number for this month. So big numbers coming out. And you will notice that we had a number of Companies Including Proctor Gamble that had excellent numbers. Those stocks were trading on the upside. We had eight or nine Big Companies with very good earnings. As we go out, cashin was telling us that the market on close orders were coming into the sell side in a big way and we are seeing that coming in right now as we head toward the close. Look at this. Now down 307 points. Were heading lower in a big way and the s p will close below 1800. What does that mean for next week . Well keep an eye on that and anticipate big earnings. Stay tuned now as we talk about what has been a tough week for the bulls, the second hour of the closing bell with kelly evans and Company Coming up right now. Have a good weekend, kelly. Thank you, bill. It may not be a pretty weekend for investors. Welcome to the closing bell. Im kelly he wasevans on this friday. As we hit 4 00 and markets close and were still going to watch and see how things tally out, but it looks like the dow showing a loss for the day of 310 points. Its now sitting at 15,886 and continuing to be under some pressure as we weigh in those trades going past the close. The s p 500 off 2 today down 37 points. In fact, closing right on about 1790. The nasdaq shedding 90 points or better than 2 to 4128. How significant are all of these levels and the action weve just witnessed in the market today . Lets get straight to it with todays panel. Joining me are oun sara eisen, robert frank, and Seema Mody Evan Newmark and for more on markets, marian bartells. Evan umpyou were here a weak ago. Did you really expect it to look like this . I think i said something. Broadly speaking. It could have been worse. I mean its not the end of the world. Investors shouldnt lose sleep over it this weekend, but you know what . Earnings have been mixed, and frankly, i think the market is looking for an excuse to sell. The s p was up 32 last year including dividends. Its not going to be up another 10 in the first month of january. The decline for a double digit year just got tougher. You have to look at the rate of how things are selling off. You look at some of the extreme moves and investors around the world, whether youre trading equities, bonds, whatever are watching these markets. Youre seeing record lows for the turkish lir raa, the argentine peso. When you start to see moves like this you start to see spillover to other emerging markets currency. Then you start to think of the engines of the Global Economy and the fastgrowing economies there, and if youre not discriminating, you start to worry about growth. Even for people who arent necessarily playing in those currencies, supplement companies by default have exposure to a lot of these markets and theyre small perhaps relative to the domestic market but an important source of growth and theres a lot of Growth Companies today that werent spared from the selloff. Theres the multinationals that have exposure to the foreign markets. Those are the stocks to watch. In terms of todays movement im hearing its a fundamental and technical story at play. On the fundamental side ongoing worries about the fed, weaker data in the u. S. On the technical side you have the s p and dow breaking key support levels. The nasdaq close to breaking the 50day moving average. Mary ann, how ugly does it look to you . Really when we look at the markets going into 2014, one of the major macro drivers were forecasting was voltatility and we got that here today. All weve been hearing at Merrill Lynch from clients is when are we going to get that pullback so we can actually buy . Well youre in that pullback right now, and we are telling clients to actually buy. Okay. So you like these levels. Youre buying here. Robert frank, what are you hearing . I always hate to admit evan is right about anything but the one thing you said that i think is so true and so important is that markets are looking for an excuse to sell and thats a complete 180 from last year where markets were looking for any ebsxcuse to go higher. They have to reach into the argentine peso the wealth practice ducts in china. Theyre reaching really far to find something negative robert seriously, there are some fundamental problems going on. First of all concerns about chinas growth with the manufacturing numbers showing a below expansion rate. Concerns about its shadow Banking System its Financial System massive. That could have implications for the Global Economy. You have the Federal Reserve on track to taper or scale back totally agree. That highlights the problems that have been masked by all of this liquidity thats been in place for the last few years let me answer. Your point about liquidity is spot on which is to say last year none of these other things really mattered as much. China, we saw a slowing china last year. We saw slow europe. We saw these issues in emerging markets. But the liquidity was overriding all of that. You take that away suddenly all these little issues matter more. He have year we hear the china slowing story. Exactly. Every year and its true. Its true but you know what . Somehow we got by last year. I just got to point out, out of the four bric nations, brazil, russia india, and china, india is down the least. Down a half a percent on the year whereas were seeing Major Movement in policy accountability. Inflation dropping for the first time in five months. Stabilization in the rupee. Thats something the last time around it was the rupee that had everyone worried. I think whats really important is emerging markets were one of the worst performing Asset Classes last year and we really havent gotten capitulation, and i think whats happening right now is going to give us an opportunity to actually get a bottom in our markets but also maybe a buying opportunity in emerging markets as over the coming weeks we actually finally get that capitulation through investors. Okay. Hold that thought, everybody. I want to bring in fast money steve grasso just off the floor. Steve, as we waited for markets to settle it looks like 318 points off the dow. What do you make of it 1234. In the middle of the day when we had that touch or that break of the 50day moving average, to touch on something mary ann spoke about, the last time we touched the 50day and broked 50day ever so slightly was december 18th and that was when we first heard i should say that was when we first experienced taper, right . So now if you think about it as a point of reference, we closed much higher on that day. Today totally different set of circumstances. Thats why i think we have to go down and touch that 100 day which is what mary ab saidey ann said theres some support. 1762 in the cash. She referenced the futures but the cash is where we need to go down. I would have liked to see the market close rallying back with guys wanting to cover maybe their shorts explain that if you could. Art cashin talked about this too. The fact if you dont necessarily want to be into a weekend exposed to what could be happening in terms of the currency markets, is that part of the story . Is it the sense that maybe theres more bad news ahead . It could be either or but the shorts have waited so long to get any type to get any type of a seize the day type of event and today is the day. How greedy do you get going into fomc . We know that the fed is looking at emerging markets. We dont know how much that goes into their metrics. We dont know how much that goes into their calculations on what theyre going to do but the truth of the matter is why go in blind into next week where anything can happen . And these markets can rally aggressively off the levels were seeing right now. Its interesting because we have the backdrop of the fed meeting within just a couple days. Its not as if they will have weeks to think about this one. Its Ben Bernankes last meeting as chairman. Yellin takes over feb 1. It suggests theyre going to be unlikely to turn on a dime. I agree with you. But if they do, then you could start to talk about something to turn this market around. Federal reserve says its data dependent, not market dependent. So far the data except for the last jobs report has been pretty solid. I want to point out one thing and that is the new face of the Federal Reserve, Stanley Fisher as number two, if he gets confirmed by the senate, he comes from the bank of israel. Hes got an emerging markets international perspective. Brainerd was the International Person on the treasury. I cannot believe people at the fed are going to be jumping up and down and going bananas because argentina is a basket case they try to clean it up afterwards as you know from what happened in russia and thailand. Its not necessarily about these particular countries. Its when those countries spur enough of a panic or they blow up ltcm or something. All im going to say is if the fed is starting to freak out over contagion because of argentina, turkey all theyre doing is saying to the hedgies and to the currency traders out there, you know what . Why dont you attack every currency under the sun because then well have to give you what you want. Not going to happen. Robert, you know a little bit about some of the emerging markets where weve had panics to some extent crises before. For people who are out there, you see a little bit of the commentary, it feels like the late 90s to me. How relevant do you think that is is given the relatively contained selloff. I was in singapore in 1989898 to 2000. On both the boom and the bust its so much driven by capital and liquidity as opposed to the real reforms and improvements in a country, and the mistake that investors make is to lump all these countries together in a nice little acronym whether its a bric or a mint or a pig or whatever. And say theyre all the same. Each country is so different that i think both on the way up and now on the way down that investors just make a mistake by saying all emerging markets which is a misleading phrase are all the same. I think you need more discrimination on the part of investors. Kelly there was a funny joke that b of as chief Market Strategist made in his Research Report this morning that emerging markets are as unpopular as Dennis Rodman is at the u. N. Security council. It goes to show he loves north korea though. Thats a buy. Mary ann, i wanted to ask you what you think about the bond side of things. We have the tenyear u. S. Treasury which has rallied to almost 2. 7 . Were coming off the worst week for stock markets since november of 2011. What should investors do here . Should they look to bonds . No. Were not recommending to actually really aggressively buy fixed income. We can certainly see treasuries act defensively and see yields on the tenyear come down around 7. 6 to 7. 5 . We think a better way to hedge a portfolio is to buy Consumer Staples within the portfolio. Were still forecasting that rates will rise throughout 2014. Were forecasting 3 gdp growth and were getting tenyear rates up year 3. 75 . If youre really looking to grow your portfolio but have more of a defensive posture, we tell you to go into the staples. Steve, last word to you as people start to shift their attention into the weekend, into next week. What are we going to be watching . I think all eyes are on the fed right now. Maybe theyre not going to go off course on taper but there was chatter they would increase their pace of taper and i dont think you will see that. That might be greeted with some buy side. But i spoke about it last night on the fast money show utilities have been lumped in with em and i think its been overdone to the sell side on long s. O. So you dont think im talking my book. Thank you for joining us after a rough day down here. Stick around and catch more of steve grasso coming up on fast money at 5 00 p. M. And theres plenty ahead on this show. Much more on wall streets freefall today and where it all goes from here. Up next we are going to talk some emerging markets seeing plenty of red arrows of their own. Many saying one of the main culprits of the selloff. What is the potential for con contagion contagion . Listen up investors, you cant afford to take this weekunderweek weekend off. What you need to watch out for, how to keep your money safe, and we want your feedback on how youre playing these markets. Tweet us cnbcclosingbell. You are watching cnbc, first in business worldwide. Tte or au lait . Cozy or cool . Meow or woof . Everything the way you want it. Until boom, its bedtime and your mattress a battleground of thwarted desire. Enter the sleep number bed. Designed to let couples sleep together in individualized comfort. Hes a softy. His sleep number setting is 35. Youre the rock, at 60. And as your needs change over time you can adjust your bed to sleep better together. 48month financing available through february 2 only at your local sleep number store. Find your sleep number setting and know better sleep. Welcome back. The dow losing 300 points plus today. It was the worst week for the index since november of 2011. Dominick chu, what a mess. Stock market volatility is measured by the vicks,x, up 44 this week. The biggest jump since july of 2011. A big move in volatility for stocks. There may be cause for some worry but not everyone is pushing the panic button just yet. We want to put todays level in context. The record high for the s p 500 is 1851. We hit that back on january 5th. Now, that means were about 3. 5 below that record high. For the dow, the record was around 16,588. We hit that back on december 31st. Were about 4. 5 away from those record highs. Now, were not at record highs in the nasdaq composite but were down 3 from the multiyear highs we saw on january 22nd. In order for a correction or a 10 fall in stock prices to occur, wed have to drop another 130 points on the s p 500. Wed have to drop another 1,000 points on the dow, and wed have to drop another 310 points on the nasdaq composite, and no one is talking about bear markets just yet. Remember, thats a 20 drop. Just to put things in perspective, yes a bad twoday drop but were still not near that correction phase, kelly, as of yet. Back over to you. And i think we havent had a real correction dom. Thank you, sir. Emerging markets are weighing down on stocks here in the u. S. Earlier on squawk box Lloyd Blankfein tried to be a voice of reason amid the hysteria. When its one country specific, its like credit. If its name specific and were at that part of the world how is this country doing, that country doing it . But at some point it becomes kind of a macro event. Its not yet. When all these kuntszcountries that are very far apart in the global are close together in investors minds. Somebody said you take a position on the emerging markets and you cant change your mind for, fill in the blank, one year, five year. Id be long not short. On that note with us now, Larry Mcdonald from new edge u. S. And Michelle Carusocabrera who is live from puerto rico which has issues of its own that its dealing with at the moment. Welcome to you both. Larry, first to you, which is the tail and which is the dog. Are emerging markets getting hammered because of the u. S. Or is the u. S. Struggling because of whats happening in emerging markets . One of the things we were talking to clients earlier in the week about leading indicators, and youre not going to believe this, but if you track the fiveyear credit default swaps of hsbc versus jpmorgan earlier this week they went wider for first time in a long time. For most of the last five years, jpmorgan has been a much much better credit but in the last couple days hsbcs weakening substantially. Thats a really good warning sign. I think it tells you the epicenter of risk in 200708 was the United States . Then to europe and now to asia. If we cant lump all these emerging markets together are can we is it now approaching the lel of being some kind of macro event . I think its a little different. I would look at china. I have been talking and tweeting about this shadow bank risk for many weeks and the markets laughed it off for a long time but i would say china is very similar to the s l crisis we had in the 80s. A lot of chinas Credit Derivatives or credit risk is not in derivatives, its not in Global Products so it is much more isolated than say the problem we had in the United States where these Credit Derivatives werelinked to banks around the world. Michelle, you spent a lot of time in these emerging markets that in focus. What are you watching . Trying to figure out whether or not its going to turn into a macro event, Lloyd Blankfein hit it right on the head. When does it become something much more systemic . I dont think were there yet. I know theres a lot of focus on whether or not this is going to be like the currency crises of the late 90s and theres a lot of similarities but theres one really key difference china, as larry highlights an exception which is the following. A lot more currencies floats now. And so besee the change day over day over day, right . As opposed to waiting for the tide to devalue one day and somebody was on the wrong side of the trade and they got really hammered. That actually eases things. I know its painful to watch, but it actually smooths out the process in a way that we didnt see in the 90s. Whats different about china and why people think actually maybe its not as big a risk as larry says is its still very much a closed Financial System. They can wall it off. They do wall it off. They do control their currency and, remember theyre a Balance Sheet as a country. If they have a financial crisis a banking crisis they have the money to fix it and fast and also the authoritarian power to do so. Larry, quickly, last point here, if i were a policymaker, if im the fed meeting next week for example and im worried because what we see today continues, is it a policy response thats going to end it here . How does this play out . Well you know i dont think they taper with this going on. Everybody thinks that its data dependent. I think that the fed is much much more concentrated around systemic global risk and i think this would make them pause. Michelle, want to weigh in on that . Look, i think the ferveg looks at what happens in the United States. A lot of people say they take the emerging markets into consideration. I think they think about that zero. What they do think about is whether or not there is feedback that causes some kind of negative gdp effect or economic effect in the United States, and then it impacts them. But they create u. S. Monetary policy for the United States. All right. Larry . Just in closing, 45 of s p 500 profits are outside the United States. So they definitely have to look at that risk. All right. Larry, michelle thank you. Try to have a good weekend. Speaking the weekend, it is finally here but investors wont get too comfortable. Up next a wall street pro explainess this weekend is so crucial. What do you need to watch out for on saturday and sunday and early into next week . You cant take this weekunderend off. Well tell you why and well be right back after a short break. Te runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Mine was earned in korea in 1953. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Welcome back. Its been quite a week for markets and this weekend is not the time to take your eyes off the ball. Theres a lot to watch for that could extend the selling pressure or perhaps stem it come monday morning. David seeberg joining us. David, whats the first thing youre looking for, whats on the radar . I got to tell you, first of all, i look at the market today and down as much as we were were only really 3 off our alltime highs and i think theres a lot of panic in the air for it but the reality is we havent really pulled back a tru amount tremendous amount. Next week we get a lot of big earnings still coming out, very important earnings. Are these earnings going to be, you know, Strong Enough to actually defuse a little bit whats going on in the emerging markets . Well get an answer to that no question about it. But, again, lets put everything in perspective. Down 3 from the alltime highs. I look at it as were setting up for probably a pretty good buying opportunity at some point. I think this pullback has been a little bit greater than weve seen obviously in the near term but were setting ourselves up for a very good thing here kelly, mark my words. I would say look for a few things a few indicators that you might want to, you know, keep your eyes on over the next week. I dont think you have to spend your whole weekend worry being it. If you want to watch cnbc, watch cnbc aboutbut you dont have to worry about it. What are you watching . Look at the tenyear. If the tenyear dips below 2. 50 then maybe the contagion thing is a real thing. I would look at indiscriminate selling of stocks. The selling today was not indiscriminalindis krim indiscriminal but the breadth a lot of stocks have had unbelievable runs. The thing i cant understand is why a stock like twitter, which is as ridiculous valuation, is only down 1 today. Its a twitter is a safe haven. I would look at specific things. I would look at selling, indiscriminate selling. Seema what about the earnings . We have caterpillar on monday amazon and google on thursday the same day we hear from the ped. Fed. Dont forget apple on monday. Facebook on thursday. Its a big week for technology, and, of course, a lot of these Technology Companies are diversified and they have exposure to emerging markets, so, of course well have to see if there are any currency headwinds these Companies Call out for. And the fed. That is the biggie next week. David . You also have to look i was listening to facebook and yahoo and google all these names reporting. You have to look at the setup trades into the quarter. Facebook, theres been a tremendous amount of derisking in facebook ahead of the quarter. Weve seen it on our desk across the board. People have taken money off the table. If their numbers come out okay s this going to twist . Are you going to start to see people rush back in and buy this name . Probably start to see money fly back in. You know yahoo has been a crowded long. Google has been a crowded long. You know is there a chance that they get displaced a little bit based on that . I think you have to look at how theyre set up going into the trade. Sara is it micro . Or is it macro, and is it the u. S. Central bank . I think you can use some earnings to get a window in whats happening. Watch caterpillar. Whats one of the best ways to find out whats happening in the Global Economy, especially in china where caterpillar has had trouble recently Big Industrial play in china, and, of course investors are trying to figure out what is going on with china. Watch the interbank lending rates in china as well. It sounds wonky but shibor its a good way to see how much stress there is. And u. P. S. Earnings are out next week and thats a good Global Barometer of whats happening in the world economy. I will contribute the yen, if i may, its going to be one of the first things under night, it will give you a sense of whether this whole liquidity thing is working. Yeah david . Can i make one point . One thing thats interesting and i actually had a conversation with a couple traders today about this people were talking about where are the buyers on the dip, right . Because this is a pretty significant, you know, nominal pullback. If you look at last year toward the tail end of last year, every dip was really bought. That was a lot of traders playing catchup. It was obvious that, you know, you would see the trend of every pullback youd start to see the traders come in and buy the dip and make money. It was a continued opportunity for them. This year the clock is reset. And i said it before on your program, youre going to have a very different type of investor appetite this year. You got to seek out the winners. You got to find the winners and invest in the winners. The losers will be shut out of the portfolio. People are ultra conscious on what will actually perform well and the dips may be a little deeper. So i dont think the traders are rushing in to buying like they were before. Look i think when you look at the u. S. Market its really the fed is number one, two, and three. I think were stim a feddriven market. Any inkling as to whether theyre going to change the pace of taper is number one. Outside the u. S. I just think you cant overemphasize the importance of china right now and the amount of debt that is sort of missing. You dont know where it is. You dont know sort of whats going to happen with the local banks there. And the number of economies outside the u. S. That depend on chinese growth right now, all those commodity markets, are so linked to china. We may not be as much but the rest of the world is so dependent dependent. I would say this, too. When were talking about the tenyear, wunt get worried unless it went below 2. 5 . By that time isnt the damage done . Theres no point in you trying to outthink the markets about where theyre going to be in two days and how big the thats our job thats actually not. From my point of view i could talk about what i do with my own money and, you know please. Generally very bullish, as you know. All of last year i was selling down and its going to take more than this to get me to start putting more new equity to work. And thats probably a pretty good summary of the kind of activity were seeing. David, have a good weekend. The deep freeze on wall street is not cooling off our website one bit. Stick around our hot list is coming up. Allen wastler will tell us what people are clicking on. Well speak with one of the first tech reporters to cover steve jobs and the introduction of the mac back in 1984 with the company reporting earnings monday. Well talk about apples past present, and future coming up. I need proof of insurance. Thats my geico Digital Insurance id card gots all my pertinents on it and such. Works for me. Turn to the camera. Ah, actually i think my eyes might ha. Next Digital Insurance id cards. Just a tap away on the geico app. Huh, fifteen minutes could save you fifteen percent or more on car insurance. Everybody knows that. Well, did you know that when a tree falls in the forest and no ones around, it does make a sound . Ohhh. Ugh. Geico. Little help here. If you wear a denture, touch it with your tongue. If your denture moves, it can irritate your gums. Try fixodent plus gum care. It helps stop denture movement and prevents gum irritation. Fixodent. And forget it. [ male announcer ] this is the story of the little room over the pizza place on Chestnut Street the modest first floor bedroom in tallinn, estonia and the southbound bus barreling down i95. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment welcome back. The stock market may be ice cold, but the website is heating up and it sounds like its partly because of that. Allen wastler, what are people digging into at this hour . You know what . Its still the market. We got slammed today on our market coverage. People just diving into the website. Look at this this is our traffic graph for the day. We were burying the needle earlier. We got the spike alert around midday. You can see gobs of traffic coming in. People checking out what the markets is doing, what people are say being it. We decided to throw up a poll and ask our readers what do you think is going on . The long awaited correction, yes or no . Look at this. We had over 17,000 voting and that number is still growing right now. Look at this split, kelly. Yes, 38 , no 33 . And nearly a third saying theyre not sure. I love people who take internet polls just to say they dont know but anyway. I love that you guys have it up there. You have to keep it going. Im going to be very curious how the numbers start to change into next week. You know what . We will keep it up. Well keep it up through the whole weekend. Now, when people start getting crazy about the markets and saying whats going on whats happening . They tend to whatnotant to focus on what wise men say. We had a piece up by jim cramer telling people basically to chill. That thing got gobs of traffic, too. Over 30,000 people have taken the dive into that story already. More are still going in. And then finally, if the market wasnt crazy enough, we decided to put up a feature looking at whats happening with natural gas. It costs 5 bucks today. People went into that one, too. Not only is your portfolio going cold but you wont have heat either. So it was all about the negative today on the website, im sorry to say. It was a big spike today. These are important issues. Allen wastler, thank you, sir, and try to have a good weekend. Take care. President obama delivering his state of the Union Address next tuesday. Income inequality and the economy are likely focal points. Up next, David Gregory from meet the press weighs in. With the dow posting its worst week since november 2011 we want to know how your playing these markets. Tweet us cnbcclosingbell. Your thoughts coming up. [ male announcer ] once, there was a man who found a magic seashell. It told him what was happening on the Trading Floor in real time. The shell brought him great fame. But then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their Trading Platform. [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a. Shell. Get live squawks right in your Trading Platform with think or swim from td ameritrade. [ male announcer ] meet mary. She loves to shop online with her debit card. And so does bill an identity thief who stole marys identity, took over her Bank Accounts and stole her hard earned money. Unfortunately, millions of americans just like you learn all it may take is a little misplaced information to wreak havoc on your life. This is Identity Theft and no one helps stop it better than lifelock. If mary had lifelocks bank account alerts, she could have been notified in time to help stop it. Lifelock has the most comprehensive Identity Theft protection available, guarding your Social Security number, your money your credit, even the equity in your home. You even get a 1 million service guarantee. Thats security no one can beat. Dont wait until you become the next victim call the number on your screen and use promo code notme for 60 days of lifelock Identity Theft protection and get a document shredder free. Call the number on your screen or go to lifelock. Com notme. Welcome back with some news on walmart at this hour. Dom chu, what can you tell us . This is not good news on the jobs front, kelly. What were learning according to dow jones news wire is walmart will lay off 2,300 employees or 2 of the workforce at its sams club outlets. Those are the warehouse bulk buying outlets. Walmart to lay off 2,300 sams club employees or about 2 of the workforce. According to the headlines, sams club is seeking to cut or reduce the middle management roles there and this is sams clubs biggest layoffs since 2010. So again on a day when the market is down big, more bad news, this time on the jobs front, 2 stshths 3,300 people to be cut at sams club. Just want to get some quick thoughts from the panel. This is a big story and its not just sams club. It is whats going on with sears, jcpenney. Its really i mean could you make the case for the secular decline of retailing. You know, which has usually been a huge source of job growth in the United States. Amazon winning out is not good for jobs amazon employs 75,000 80,000 people. Walmart is the largest employer in the United States. Its over 2 million people. So much of that is automated. There was a guest on from davos this morning talking about the three economies, those are who in financial markets, financial assets, theyve done well. People with houses have done pretty well. Those who depend on a wage the employment economy lets say, the employmentbased economy, that still tough. You see this from the retailers especially, every single day this week weve seen something big. Howard schultz of starbucks, he called it a turning point. He said it will be a Seismic Shift and a turning point for retailers. A total shift in the way consumers go out and buy stuff. Walmart has had some of its own problems beyond just the whole retail problems. Havent heart muchd much about sams club. The crazy thing is even here in manhattan, the home to Robert Franks 1 it is yeah theyre mine. If you go to upper broadway or a lot of the retail parts of new york theyre packed. No. Yeah, they are. Thats not my point, quite the contrary. Theres a lot of open retail space all over yes, there is. New york, which is not what you would expect at this part of the economic cycle. I think it has to do with the decline of stores. I dont know. I think you really have to split it up. When you look to Luxury Stores particularly in manhattan because of the foreign buyers coming to buy stuff here, these places are just mobbed. I think it really is a tale of two retail economies. Its also a tale of new york benefiting from that totally. He has to get off fifth avenue. He spends too much time on fifth avenue. I will say on this news from walmart, this is just again cost cutting. It shows us companies will continue to cut costs in order to boost their profits. Absolutely. Were looking at walmart shares off almost 1 after hours but its been a tough day and tough week for most of these names. Apple down about 10 today. It was 30 years ago today that the company though made some history. In 1984 computing was just leaving the refrigerator gigantic room era. This mcintosh thing apple celebrating the 30th birthday of the mac today. Well speak with wellknown tech reporter steve levy about steve jobs legacy and where the tech giant goes from here. Dont go anywhere. Well be right back. Welcome back. President obama reportedly planning to focus tuesdays state of the Union Address on income inequality. The stock market selloff by the way might have narrowed that a bit this week. Joining me for more is David Gregory who moderates meet the prets press sunday morning on nbc. Its great to have you here. Thanks. How much of a focus is income inequality going to be on tuesday . I think its one of his big arguments for the rest of the second term. I think he wants a lot of his legacy to be how to address this. I think hes got to be accountable for how income inequality has become a bigger issue even under his leadership as president and really kind of get into the details of what causes it and what government can do to shrink that gap. Its not just about dealing with the poor but its about shrinking the gap and being a real jobs president , which i think hes struggled to be. As you say, pretty tough afternoon here on wall street is going to be making him think a little bit more about that economic legacy. And whats interesting is it kind of brings up this idea that back when we were in the depths of the financial crisis no one was talking about income inequality then. It was all about the stimulus. It was about deflation. It was about the deep recession and how bad it might be. We have evolved to this point having moved away from that to where now were talking about, well to what extent did the response to that event play into the income inequality today and how much is president obama over time potentially going to be blamed for that . Well or i will be a little elusive because i dont know, but i know that part of that answer is does he get credit for the upside . Right. I talked to a Business Leader today who said theres no question that the economy is out of the ditch but that were still underperforming, and i think thats as a political matter whats been weighing down on this president. You know he has not really been locked armed with the Business Community. I know a lot of people in the Business Community who, frankly, have given up on this white house, on this administration, still think of them as a much too interested in regulation and less interested in job creation so i think its the fact that he is still not getting the kind of credit for the economy being out of the ditch is something hes going to deal with. Look, i think theres another aspect of this and im talking about the politics of this. I think the president who Just Announced the reopening of his Political Office is thinking about the Democratic Party and how he can have a Lasting Imprint on that party. That party in some ways is moving to the left. Theres a more progressive streak an antiwall street streak and i think it will be a big part of democratic policy. I think he wants to create that lane for a future democratic president he hopes to really make some inroads. And, david, given that especially in a Midterm Election year and heading into 2016 how do you expect the gop to frame this issue . I think they want to show that they care. I think that thats a big piece of it that they want to have a voice on poverty, on dealing with poverty. Again, all of our debates have been what role government should play in dealing with all of this because, again, if you think about what causes income inequality, why is there is much less mobility what are the real causes of this . Government you know a president can give voice to this and can talk about some of the work thats being done in Academic Circles as the president has done im thinking about the new yorker piece, but the republicans want to have a voice. I think the republicans want to get in there, show more empathy, and actually have a road map to say this is what were for, and these can have positive impacts not just on the economy but on dealing with poverty, dealing with income inequality. I think they want to get into that conversation. David on that note, what is coming up on this sundays show . Well were talking about a big week for the president obviously next week. Were going to keep our eye on the markets and what next week will mean there as well. But were also talking about Edward Snowden and the puzzle of what to do about him. This big spying debate. We made a lot of news on meet the press with the chairs of the Intelligence Committee talking about that. Were going to guess response from senator rand paul of kentucky who will also have some thoughts on the economy and the president s leadership and i guess a big question for me as i think about the state of the union is how much persuasive power does the president have left here in his second term . So its something well be talking about. Hes got a pen and hes got a phone i think i remember him saying recently as well. Thanks, david. You can be sure to catch much more of David Gregory on sunday on meet the press. Check your local listing or the time and channel. You can catch the entire state of the Union Address right here tuesday night 9 00 p. M. Eastern on cnbc. Now, in 1984 steve jobs told my next guest he wanted to quote, make apple a great 10 billion company. He planned to do it with his new computer, the mcintosh. Today is the macs 30th anniversary and apple is a 500 billion company. Joining us is a 500 billion company. Joining us now is steven levi in 1984 worked for rolling stone, where he reviewed the new mac. Its great to see you, steven. Did you ever think we would be here, 5500 billion company if. No the other part what steve told me on the eve of the macintosh, he wanted to be a 10 billion company with soul. Apple, largely is known for, you know, its style, maybe you can say its soul he exceeded even beyond his own expectations. In the same way google is sometimes mocked for its dont be vil slogan how apple stuck to that . The products is where the soul resides there. The torch has been passed obviously, steve passed a way a couple of years ago, but tim cook, so far, a good steward, hes sort of milking the product line there, waiting to see he does next. I was going to ask, evan here robert 1984 we were alive back then. We were alive. At the time did you know what was happening . My nextdoor neighbor had one of the macs. I think he may in fact im pretty sure he had one of those. Im trying to remember whether it was an earlier reincarnation, in fact. One thing that you knew the whole icon the mouse, the way you manipulated, was fundamentally different. Its not so different now aday and one of the line that i love from steves piece, hes quoted the ibmpc is a piece that you respect. The apple mac intosh is a piece you can love. Ipad, ipod, you have taken the machine and made it something that they love and the question now is what can they do next . What machine can transform next thats respect and and lovable . Its got to be tv or Something Like that. Or wearable tech. You hear the rumor well is apple going to do the tv next or the watch next . Its not so important what they do next but how they do it. We knew that apple was going to do a tablet what turned out to be crucial was how in that case, steve jobs oversold the design of the tablet to make it something surprising and how they executed it. Thats what distinguished and from the rest of them. Were rethinking the tv. Right. Steven what didnt come true from the artle, i mean you look back at this article, what didnt happen . Well, what didnt happen the ma macintosh wasnt an instant market success. When i asked steve, you know he was fighting the board to make it cost 2,000 which many thought was high. But the board insisted that he charge 2500. His ambitions was such that he tried to do too much computer power. It had a lot of glitches. You swapped disks a lot to get things done. It was little slow. It took a year or two before the power was in the computer enough to be able to do all of these nice things that your panel is talking about there. So, that was a surprise. The macintosh almost failed in the marketplace. Theyre celebrating this weekend in cupertino, is that right . Yes, they are. Apple has a special thing on their website. Tomorrow night theres a big celebration for the 30th anniversary. Im going to do a panel for some of the original team members. People are making pilgrimages from across the country for it. Apple, kelly, its gained 16,000 since that mac came out, i was just looking at the chart, lot of individuals who own apple as part of their mutual fund. They were disapointed with apples lackluster performance. By the way, apple had some very very very tough years in there. In fact, was on the verge of bankruptcy. Even in 2004 this was looked different. People dont remember. Its all about the iphone. And adapting. Steve, thank you so much. It was great piece to go back and read. Get those final tweets in were asking how youre playing these tumbling markets. Your thoughts up next. [ chainsaw whirring ] humans sometimes life trips us up. Sometimes we trip ourselves up. And although the mistakes may seem to just keep coming at you so do the solutions. Like multipolicy discounts from Liberty Mutual insurance. Save up to 10 just for combining your auto and home insurance. Call Liberty Mutual insurance at. [ thump ] to speak with an Insurance Expert and ask about all the personalized savings available for when you get married move into a new house, or add a car to your policy. Personalized coverage and savings. All the things humans need to make our world a little less imperfect. Call. And ask about all the ways you could save. Liberty mutual insurance. Responsibility. Whats your policy . Welcome back. Another huge day in markets. The dow did finish down 318 points and we asked how are you playing markets right now . We got a ton of responses. You should look them up. Here are some of the standouts. Bob tweets i think my strategy is to sit tight watch the drop 10 and drink some jack daniels and then tiptoe back in. And bridget tweets. Michael tweets im in, im in for the long haul. People still seem to say, either its not a big deal im looking to buy here so not freaking out just yet. Looking ahead to next week its going to be so much about inequality. The obama response obama will be known as the inequality because inequality has ramped up. You think hell get the blame. Think his administration will have overseen a big raise in inequality. To your point, the big thing that makes it drops is falling markets. So, its a double of he edged sword. Exactly. But its going be topic number one next week. For the markets, everybodys going to be watching the vicks. I think the key takeaway from this weekend, maybe investors have learned over the last five years not to panic. Invest in when iskie. We got to hand it over to melissa lee and fx fxfast money crew. Im melissa lee. Our top story, global selloff intensifying heavily into the close. Tap capping its worse loss since november 2011. The dow is down at 3 . The nasdaq is down 2. 7. The vix up a whopping 32 . Is the beginning of a market