Seeing signs of deflation and why the fed should not be hiking rates right now despite what was said today. Well get the case in a little bit. Lets start with the selloff. Bob pisani is tracking the action here on the floor of the new york stock exchange. Bob . Finally volatility. About sometime. Six weeks, a slow market overall. Last time the dow moved 1 , july 8th. Were due for volatility. Were reminded, hey, the markets arent positioned for a possibility of a september rate hike. What will you do . Sell Interest Rate sensitive stocks. Utilities market leaders all year. What else do you do . Might play a steepening yield curve and why financials might be improving. You can bet Insurance Companies of met life and prudential have happy. They had a miserable time in this environment. You bid up the dollar. That puts pressures on commodities and why they have been weak today. Thats why you see stocks like y rio tinto down. What else do you do . You buy volatility. So everybody who wants to play the vix, for example, thats a big move up here today. Nobody was anticipating that to move up 30 or more today. Havent seen that in a very, very long time. Who wins here . Professional traders desperate for volatility very happy about this. Whats the problem, guys . If the fed does nothing in september, all of this gets reversed and we are back and certainly on a much more heightened awareness about the markets for the next couple of weeks. Back the you. Its p ees peculiar of the environment after this data. Rosengren is hawkish, cowboy, guys, this is alive thing with the weak data. I find it hard to jive in my head but they want everyone to believe we could do it in september. We were talked and i mentioned this last hour, low vix suggests compplacency and that theres skittish and heading to the exits of a hint of it happening and only 30 pistons chance to raise rates, bob. The data, if theyre data dependent, ism, expectation and services on the weak note. Knowing yellen, youd think she would hold back but they want us to believe, guys, Pay Attention here. Yeah. 30 rise in the vix. Yep. Gets your attention. September 21 is the meeting, right . Coming up in about 12 days. Thank you. Believe it or not, some stocks managing to gain ground today. Dominic chu has the Silver Lining plays. Dom . Check out whats happening with the big Insurance Companies like he said. Metlife, prudential, lincoln national, hartford in positive territory on the possibility of rising Interest Rates. Remember, seen helping the Insurers Fund future obligations. The chance of rising rates could help profitability at regional banks. A reason to see m t and zions bank trying to hold on to gains here. Some are on the flat line for the day and retailers also overperforming. If you look at the shares of dollar general, dollar free, kohls, jcpenney, theyre trying to hold on to some of the gains in mid afternoon trading. Another this ing to highlight here. The trading tifts been on heavier than average volume. Looking at the s p 500 spdr, etf, its trading well in excess of normal. Trades about 89, 90 million shares. No surprise here. Much more traffic in the utilities spdr the slu. Bill, kelly, you guys were asking the chatting with bob about the idea of why one fed speaker could do it. Because this fed speaker hasnt done it. We come to hear them from dudley or even a stan fisher. You know, a lackard. Torosengren is a shock in the market. If they do hike rates any time this year, if they do, you cant say that they telegraph it along the way. Right, guys . Apparently today we can say that. Thank you. You got it. Lets get to the closing bell exchange. Glen mead, Kenny Polcari and Rick Santelli from chicago. Kenny, you sensed a move to the downside. What do you think . Oneday wonder or beginning of a trend . Im not so sure the beginning of a trend but the market exhausted. Trying and trying. It needed something, a reason to kind of have some profit taking. Rosengren typically a dove. Went to the hawkish side and gave it what it needed. Then you start pulling in every piece of commentary that anyone makes about why rates no ed to go up and then you have this market. Look. We are down 2 today. Not necessarily very pleasant but only 2 off the alltime highs and not start, you know, nailing the kofb shut yet. Down 5 , 8 , thats a different conversation. I think more of a daily wonder right now. I think next week i dont think they raise rates in september and then stabilizes and moves higher and december is earliest bet. I dont see how they do it in front of the election. Jason, what do you think about rates globally here . You know, i think this is this situation with the fed, this is a little bit of noise we are getting along the way, you know, the base case here is were still expansion. The expansions moving a speed okay enough that they can hike rates. You have a tight labor market or one relatively tight and not that many job openings for applicant and you have inflation ticking up. Its enough. Its enough to justify a fed rate hike and saying december should be on the table and probably be their move. Why this is big news for the market, i sometimes get confused how its taken as such noise. On the whole here, we got Interest Rates on the globe down to abysmally low levels. They needed to come up. I think thats what this 2 is about. And the background story of an ongoing expansion is till in place and will eventually support the stocks. Rick, 167 on the 10. We just showed that. Do you think theres much conviction building in the market for a rate increase this month . Well, i think that if youve been in a line in a Grocery Store and a kid wants a piece of candy and the parents say no, they throw a tantrum. This is their kind of, you know, tantrum like in front of the t. A. R. P. Vote. They expect the fed to see it and go, oh my god, we cant possibly raise rates. I believe i agree with what jason said. We cant tell whats going on in the brain of central bankers. They can do things counter intuitive. They have done things that are very counter intuitive. When i think about everybody trying to raise rosengren, it was really mario draghi that started this yesterday. We talked about it. Looking at the 24hour charts of how the boons traded, the shots traded, the guilds traded, the treasuries traded, first of all, you will notice theyre exactly the same. Our 7, 10s are up 7. Boons are up 7. You look at the notion that we talk about globalization in terms of manufacturing, banking. What we fail to realize is globalization of central bankers and manipulators is coming to bite us all and i cant tell you if stocks go up or down or withstand any kind of normalization whether it should come or shouldnt come. What i can tell you is every investor is highly aware of the central bankers on the markets they trade. And its not defined by country. It is defined by sector and i think that the sectors are rebelling a bit. I wouldnt look for especially on the fixed income side of sovereigns, they have pushed it out of a range. It will have its own reaction no matter what central bankers do. Meanwhile, the transports, kenny, down more than 200 points. They actually were rebounding nicely the last couple of sessions. Thats looking like a head face. But how are we to determine what the transports are telling us here if theyre just extra volatile relative to the market . When they were up 110th or something, everyone saying how is this happening . Today, in fact, the transports are giving it back and then all some falling in line with the Broader Market and i think its much more trading call. They just guys that bought stock and saw the runup and taking the money off the table in light of the broader weakness. I dont think it extends from here and the market stabilizes and no rate hike in september and then move higher as bob pisani already said to us. Thank you, guys. Appreciate it very much. Thank you. We have a news alert on mylan. One of the stocks of this week. Meg tirrell with details. A stock this week and this month, bill. Mylan with a letter in response to senator grassleys inquiry. The letter linked to in grassleys response saying an incomplete response and a tidbit by cnbc. Com giving some information about mylans estimates about what the impact of the generic epipen will be. They say we anticipate more than 85 of prescriptions will shift to the generic and save potentially more than a billion dollars. Mylan confirmed the first time this guidance about what the shift will be to the generic is out there, kelly and bill. Its a pretty big number, meg. From mylans point of view, as much as theyre going to placate the outrage and not making as much money as the original epipen. That is the question. They say its based on an assumption of the utilization rate and the 85 comes from. The billion dollar in savings im trying to understand a little bit better. You know, they also dig in in this response to grassley. A question you have been asking this week, kelly, why not just lower the list price of epipen . They said they think with the generic theyll save patients more money. We heard Brent Sanders telling us yesterday he thinks they could just go ahead and lower it. But thats one rival speaking to another i guess. Thank you. Thank you. Thanks, meg. We have about 45 minutes left to go in the market. Keeping an eye on the dow down 315. S p close to the session lows. Nasdaq looks like the do, down 109. Okay. You know, if you look for safety, gold, thats down today but we have stock pickers for safety plays coming up in a moment here. Wells fargo is news on the fact it fired more than 5,000 employees for opening more than 2 million fake accounts. Details on the incredible story coming up. Youre watching cnbc, first in business worldwide. Across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, Creative Business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. Let us help grow your companys tomorrow today at business. Ny. Gov are you or your spouse saved enough for retirement . 62 or older . A governmentbacked reverse mortgage enables you to turn the equity youve built into the retirement you deserve. With over 20 years in the mortgage business, lendingtree allows you to compare free reverse mortgage offers with no obligation. Just go to lendingtree. Com or call now to get started. Live in your home and get the steady income you need. Enjoy your family. Your home. Your life. Lendingtree when banks compete, you win. Experience the thrill of the lexus is f sport. Because the ultimate expression of power, is control. This is the pursuit of perfection. A selloff day to finish the week off some sxwrjitters of a possibility of a rate hike. Rosengren of boston. Dow down 304. S p down 43 points. Was down 45. And the nasdaq which earlier this week was at an alltime high. It had a huge pop on storage issues and energy up 7 this week coming into today. Its still up, i think, jackie. How are we looking . Well, today was a down day. A loss of nearly 4 . The pressure points as you mentioned certainly the drag in equities is a reason and crude had its own issues. Profit taking after the move yesterday, a knee jerk reaction to the inventory number. Traders tells me theyre wondering if the demand picture is picking up or a oneoff event. We wont have the answer until we see how the inventories continue to come out. Meantime, rig count numbers out this week. The highest number of rigs that we have seen since february. They were up once again and a stronger dollar today, as well. Coming to the markets and the fed, a hawkish fed not good nor crude oil prices. In terms of the week that was for oil, we were down today and up more than 3 for the week. Support of 45. Traders saying its volatile. You can expect until we hear something from opec, until we hear some more information about the data as i mentioned, that crude is going to just sort of trade like this. And its this up one day and down the next day kind of moves, kelly and bill pi. Yeah. Sure is. Jackie, thank you for now. Now to a big story we flagged late yesterday involves wells fargo. More than 2 million fake bank accounts, 5,300 employees fired and 185 million in civil penalties. Will fred frost here with the details on the story still breaking. Right. It is a major black eye for wells fargo given theyre predominantly a retail bank with a clean image priding itself on the treatment of customers. It is a significant embarrassment. More than 5,000 employees fired over the issue. Huge number despite over 5 years. Its out of a total of 265,000 employees. The fine of 185 million is large for the authority that dished it out. The cfpb and represents a significant win for them. It also highlights again the zero tolerance stance of regulators on. The fine roughly 70 times what was lost and returned to client accounts, a figure of 25 per account. However, wells has not had to admit any wrongdoing and the fine is not that large relative to their market cap or to their earnings. Nor, in fact, relative to many of the fed and s. E. C. Fines overall. When you consider the share price declined only 3 today, this is much more of a highprofile embarrassment and a significant stock price mover. Talking about 5,000 employees involved this, those are hardly considered rogues in this case. Theres a trend here. Absolutely right. The number of employees is real standout shock for me and one sense you could say its actually the company being done wrong by the employees, perhaps. Now clearly, the oversight needs to be better and something that was being said earlier on. Theyre investigating as we understand it other areas and also have asked that wells fargo to set aside a further chunk that might have to go out to employees later. This is important to know. Of the 185 million fine, only 5 back to clients and set aseed for possible more and the fine will not shore up from this level. It might tick up and that figure 185 million compared to the since 2010, wells paid 11 billion in penalties. And they have gotten off easy. Considered consider by others. Theyre going to be in the spotlight and how deep the culture runs. Thank you. Sure. Monday barclays ceo will be here to discuss the state of the financial system. Thats monday at 10 00 a. M. Eastern. In the meantime, back to this friday with 40 minutes left in the trading session. Down 307 points with the s p down 42. If youre worried about the selloff, fear not. Well get safety plays of two stock pickers next. Kroger cutting Sales Forecast due to falling food prices. Larry kudlow said this is a reason not to raise Interest Rates right now. Hell make his case coming up. Guyhey nicole, happening here . This is my new alert system for whenever anything happens in the market. Kids a natural. But thinkorswim already lets you create custom alerts for all the things that are important to you. Shhh. Alerts on anything at all . Not only that, you can act on that opportunity with just one tap right from the alert. Wow, i guess we dont need the kid anymore. Custom alerts on thinkorswim. Only at Td Ameritrade. A rare more than 1 selloff today. Say rare because its been since july 8th of a move like this. A decline of 305 on the dow. S p down 42 just off the lows of the session and the nasdaq down 106 points here. Everyone comes back to the trading desks after the holiday. This is what happens. Theyre back now. Oh boy. Socalled low voluntary tillty stocks are more volatile than the major averages. Mike, whens up with that . Kelly, low volatility was something that described how these stocks behaved before the current period and before low volatility investing was so popular. Look at splv, the lowest volatility stocks in the s p 500. Down about 2. 4 today. Much more than the broad market and basically shows you how much the stock market is acting like the bond markets and bondlike stocks and these are dividend plays that people have thought were going to protect them a little bit and whens more rare, bill, than 1 down day in the stock market is stocks when bond prices are also down more than 1 . According to bespoke, the ninth day of the bull market where both of these things down 1 and stocks and bonds falling together. Not something people anticipate. This is something thats probably a gut check for this strategy. A lot of people talking about how the socalled safety stocks overvalued, basically too popular. I buy into that. I dont think it was a bubble and many have been saying, if we get dovish fed talk maybe this was all just kind of a fleeting scare and reminder of buying stocks with a 3 yield and its not really the case in all market environments. Crazy. And yeah. Well have more on this. Ill let you go for now. Theres plenty to talk about. Im shoe youll get to it at 4 00 eastern time. Wondering where you should go to find safety in the market, bring in a couple of stock pickers. George garox with us and chris retsler. You said something during the commercial break i love. We talked about how this is an unloved bull market. You said it was a loved selloff. What do you mean . As a port foal low manager, i look for opportunities to put money to work. You find them with a selloff like this . Exactly. We have been inching forward and really its been because volatilitys low. Global Interest Rates pushing down the yield curves and now an opposite effect. I dont think its that sustained because theres really no other alternative for them. So whether they raise rates here, i think its really global rates moving around and thats going to provide opportunity for longterm investors. George, where does that leave gold . I think gold is more than interesting now. Actually, eventdriven rallies usually dont last like we had one after the jobs report on friday. We were up 20 points and now back down. Maybe 8 or 9. We are down i would say less than maybe a little bit more than. 5 on the day and up about 25 for the year. Now, gold does have its ups and downs all year. We all know that. But over the long period of time, if you lived in greece, venezuela, if you lived in many countries where youve had negative rates or impairment of currency, you wanted to be in something liquid, portable, convertible with no political allegiance and thats gold. And kept your purchasing power. So the etfs were gaining funds but recently we were under asset allocated by a lot of funds. Open interest on coal mentix, at 3, 4 weeks now and now 600,000. All right. People are starting to see gold again. Maybe theyre sniffing around the metal again. Yes. More than a few managers have come through here recently saying small caps or mid caps even a safety play right now. Because of that internat