Tyler, we begin with the selloff on the street. A triple digit drop for the dow with the major averages down more than 1 . This is actually we havent seen since late september for the dow and the s p. Weve been sort of a little bit complacent recently after all the volatility of late august and september. The nasdaq is down by just over 1 along with the dow and the s p. Lets get more with bob pisani at the nyse because you have fears, bob, about retailers reporting this week as well as, of course, the rate sensitive stocks in the firing line as well, right . Thats right. A number of different issues here. Six stocks declining for every one advancing. Look whats popped up again, the vix. We havent seen this move double digits since the end of september. Its 16 and change. I dont get concerned until its over 20, but this is a move we havent seen in the last five or six weeks. Why the drop . Mandy is right, a couple reasons here. There is continuing concerns about the reverberations on higher rates that are out there. Theres also cross currents. The Global Economy is still weak. Overnight china reported that exports in october fell for the fourth consecutive month. And finally, weve had one heck of a run in the last six weeks. The general indices are up close to 10 in six weeks. So were a little overbought. Stocks are a little expensive at this point. Take a look at Interest Rate sensitive stocks. They were hit on friday, again today. Thats the reits. Home builders there, that third one is the eem, emerging markets, and oddly utilities which was hit notably on friday is not today for some reason but Interest Rate clearly an issue here. Mandy mentioned the Department Stores. This week the Department Stores will start reporting. They report on a onemonth lag compared to everybody else, so well have macys on wednesday, kohls and nordstrom on thursday, jcpenney on friday. Citigroup was negative on it recently. Jpmorgan was negative on the group. Noticeable declines here. 4 and 5 for that group overall. Finally just note the transports cant get anything going as well. Airlines are weak, even the railroads like csx are on the downside. Fed ex also weak here. 6 to 1 decliners to advancers. Back to you. Boy, that is really the case. Im looking at the heat map and it is really a red letter day. Uptown to nasdaq. Its the biggest loser in percentage terms right now down 1. 2 . Small caps and chip stocks have been the weak link there today. Bertha coombs is on site tracking the movers. Hi, bertha. Its a little about the of a reversal from last week. Last week it was the small caps were the outperformer, today theyre the worst. And incyte, today its getting a bounce. Bear in mind on friday incyte fell 14 following negative results for a Cancer Treatment it was going with merck. Priceline sis seeing its bigges decline since december of 2008 after a disappointing Fourth Quarter outlook. The strong dollar is hurting international bookings. Its weighing on the number of the travel stocks like trip adviser and expedia today. Chip stocks is where some of the pain is. The Semiconductor Index under pressure today. Take a look at the china stocks. Those with china exposure under big pressure. Wynn resorts in particular. Macao gaming stocks falling. November macao revenue expected to be down 30 after a 28 decline in october. Chinese travel site seatrip one of the biggest losers, a double whammy on the travel and china front. Thank you. A news alert in the bond market right now with 3year notes up for auction. Rick santelli is watching all that action at the cme. What grade would you give it . I gave this one c as in charlie, but this was a tough one to grade. If we just look at the notion of 24 billion 3s, one issue market was bid around 127. 5 which was the high yield, but it priced a little lower than that. 1. 271 is where the yield was set. That all looks pretty good. And when you look at the indirect bidding at 40. 8, theres a bigamy news. At 40. 8, thats the weakest since november 2014, but flip it around. Directs were 15. 1 which is the best since that same period of november 14. Bid to cover, weakest since october of 2009. So it was really a mixed bag. I give it a c and it really probably explains how difficult it is for those involved in the process to step into the arena when yields are moving higher at a time where it may just be easier to wait and jump into the secondary market. Mandy, tyler, back to you. Thank you very much, rick. Bob pisani earlier highlighted the rate sensitive stocks. Diana olick is taking a closer look at reits. Reits had been the darlings of low interest environment. Take a look at the s p all equity reit index, up over 40 in the past two years. Then coming off the gains this year as talk of the fed hiking rates ramped up and especially it ramped up last week. Avalon bay, an apartment reit, a steep climb over the past two years, but a precipitous drop over the past two weeks. Boston properties also seeing a nice climb over the past two years but down dramatically in the past week. Three apartment reits, equity residential, udr, and inco were downgraded to sell. Equity reits had given investors nice gains in october. Infrastructure led with 12. 84 total return for the month. Regional malls up 9. 94 with industrial and Shopping Centers not far behind that. Yeartodate, its all self storage, manufactured homes and again those red hot apartments, but that said analysts at kbw say its hard to find the positives other than attractive yields and cheap valuations. For half the sector yeartodate book value e clines have outpaced dividends paid. Overall economic return zero. Back to you guys. Zero. No one wants zero. Thank you very much, diana, for setting it up. Where is the best place to invest your money in reits. Mark hallie joins us now. As diana was explaining, it is a common assumption that reits wont do so well in a rising rate environment. But it doesnt necessarily have to be the case, does it . No, it doesnt. When you look at reits, its primarily driven by private markets. Only about 10 to 15 is in the Public Markets and the private markets are doing quite well. When you look at supply and demand, thats whats driving the real estate underlying valuations of these reit stocks. When the fed does finally start raising rates, its hopefully for the right reasons like better overall growth and rising rents and rising rents is one positive for reits, isnt it . Absolutely. Historically real estate and reits have been a good hedge against inflation. When you look at real estate and reits, its not just a single asset sector. You have to look at duration. You have apartments and hotels which have been benefiting from the increase in activity to longterm leases Like Health Care or infrastructure which will have the potential to decline with rises in Interest Rates. Lets talk about some of your picks. One was one that diana pointed out as having had a steep fall over the past week and that was avalonbay. We look at avalon as a very good company, Good Management team, excellent markets and the ability to selffund their Development Pipeline for good growth. When you look at multifamily, its a graeth sector to be in. Theres still millennial demand driving this group and when you look at the occupancies across the sector, youre seeing 95, 96 occupancy. Fundamentals, you have excess supply and not a lot of demand. Banks arent lending for speculative new development. Super quick the other two are general growth and Camden Property trust. Sure. Camden benefiting from the same Macro Economic driver as avalon and youre seeing markets which have been overdone, oversold in houston but still Good Management team, and general growth in the retail sales should do quite well. Theyre not in the tourist exposed market where we see hits from currencies. Fundamentally class a regional malls are still doing well. Youre seeing growth in tenant sales and theyre moving along in excess of cpi. Thank you very much for joining us today. Thank you. Mark hallie. Tyler, over to you. The major averages seeing their biggest drop since late september. Where do we go from here . Why the bulls may go into hiding in 2016. Weve got the bearish call you need to hear and at least be exposed to. Youre watching cnbc, first in business worldwide. Weve got the bearish call you my name is griselda zendejas. I love working in the salinas area because i always wanted to do something where i could help people around me. So being a construction supervisor for pg e gives me the opportunity to give a little bit back to my community. I have three boys. Theyre what keep me going every day. Our friends, families live in the area. And it is important for all of us that we keep our community safe. Together, were building a better california. Welcome back to power lunch. Im mandy drury. Valeant is bright spot in todays selloff. Theyre holding another Conference Call tomorrow to give an update on the business. The stock is up by 2. 4 after a steep fall yeartodate down by over 40 . Shares of plum creek timber tracking for their best day since march 2009 with a gain of 17 today. The Forest Products company being bought by rival weyerhaeuser. Plum creek shareholders still need to okay the deal though. And shares of dean foods surging. Beating profit estimates and raising its full year forecast. The shares are up by 4. 5 . Ty . Mandy, the end of a twoterm presidency marks the beginning of new leadership for the country but it also may mark the start of a bear market. Here to explain is larry mcdonald, head of u. S. Strategy at Societe Generale. Good to have you with us. This is a historical pattern. Take us through what the data say. If you look back over the years, eisenhower, nixon, reagan, clinton, bush, at the end of those two terms, theres always been disruption, and sometimes it comes from political elements that are inside the administration, and a lot of times its because of economic breakdowns, but at the end of the day weve got over the last 50 years during the end of a twoterm presidency, weve got an average decline of 28 to 30 , so there were some substantial numbers that back up this historical element. Nixon obviously didnt serve out the end of his second term. I guess, but what are you measuring there . Are you measuring the last two years of the presidency . Well, the disruption typically comes within the last year and a half to two years, and if you think about what happens is the voters and the investors listening to us right now, they dont theres so much uncertainty, we dont know who the next president is going to be, and the other element is if you think about what mr. Trump has recently said about obama and the fed, hes basically said the fed has been too accommodative to try to help the president. This is what donald trump has said. And today a fed governor said if were too accommodative we build up excesses in the credit markets. Ive been talking about the excesses in asia but the credit market excesses could alter the path here and create a problem. So what do the odds say with respect to the probability of a bear market between now and the end of obamas term in 2017 . Well, our team, Andrew Lapthorn has been very helpful and we have a team of analysts, our model, were up to near 30 . Its the highest level since 2007 in terms of a bear market probability, and we look at all different types of indicators. Weve got our lehman risk indicators but the most upsetting thing is credit is breaking down globally in terms of emerging market credit, in terms of the credit quality and yields in the United States. The spread between, for example, single b bonds and Investment Grade or aa bonds is the highest its been since 2007. Were seeing disruptions in the credit markets that could lead to weakening the equity markets. All righty. Thank you very much, larry. We appreciate it. Larry mcdonald from Societe Generale. When talking about of the president ial race, ben carson continues to defend his recollection of the past amid growing questions about his personal history. John harwood joins us now with all the details. John . Mandy, ben carson is discovering that higher poll numbers in a president ial race means a higher level of scrutiny. Now, hes not a politician or hasnt been a politician previously, so he doesnt have a record to pick over, but, instead, people are going through his inspirational life story to check up to see how well the story matches the reality. That produced this contentious friday night News Conference at which ben carson was defending his claims to have received an offer of appointment to west point. Something that happened with the words, a scholarship was offered, is a big deal, but the president of the United States, his Academy Record being sealed wait a minute tell me how theres equivalency there. It doesnt matter where it is. Thats a silly argument. Tell me how theres equivalency. You see ben carson trying to turn it back on the news media, raise questions about the scrutiny of president obama. He continued talking to our colleague Chris Jansing on meet the press saying that simply this level of scrutiny to long ago events is not appropriate and not precedented. You said this 20 years ago, this didnt exist, this didnt exist, i have not seen that with anyone else. If you could show me where thats happened with someone else, i will take that statement back. Now, this just adds to the unusual nature of this particular race where donald trump and ben carson both very unconventional candidates now are commanding about half of the republican vote, but interestingly, republican insiders dont believe either man can be nominated within the Republican Party which is why the betting markets have established marco rubio who has less than half the support of either of those men as their favorite for the nomination, guys. Well have to see how it unfolds over the next few weeks. Thank you very much, john harwood reporting. Check out the defense stocks so far this year. Despite the market ups and downs, these stocks continue to fly high with two Major Military moves involving the u. S. , russia, and iran, how much longer can the sector continue its winning streak . That is next on power lunch. No matter how fast the markets change, at t. Rowe price, our disciplined investment approach remains. We ask questions here. Look for risks there. And search for opportunity everywhere. Global markets may be uncertain. But you can feel confident in our investment experience. Around the world. Call a t. Rowe price investment specialist, or your advisor. And see how we can help you find global opportunity. T. Rowe price. Invest with confidence. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i looked at my options. Then i got a Medicare Supplement insurance plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. The rest is up to you. 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[ male announcer ] join the millions of people who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp, an Organization Serving the needs of people 50 and over for generations. Remember, all Medicare Supplement insurance plans help cover what medicare doesnt pay. And could save you in outofpocket medical costs. Call now to request your free decision guide. And learn more about the kinds of plans that will be here for you now and down the road. I have a lifetime of experience. So i know how important that is. Welcome back to power lunch, everybody. Im mandy drury. Two big stories out from the Defense Sector today. Jane wells joins us with more details. Hi, jane. Hi, mandy. Well, defense stocks are down today. That may be more to do with whats happening in the dubai air show. Its a little sluggish at the start. However at the same time, we may step another toe in the proverbial syrian water because defense secretary Ash Carter Says the president is willing to send more troops to fight the Islamic State in syria beyond the 50 special ops forces which were announced late last month. However, carter tells abcs this week this would only happen if the u. S. Can find enough locals willing and able to join the fight. Quote, you need to have capable local forces, thats the key to sustainable victory. Minetime, russia has followed through with plans to sell its s300 surface to air Missile System to iran despite concerns of some of irans neighbors and the u. S. Russian Officials Say the system is only defensive. Speaking of missiles, wha