And welcome to power lunch. Im melissa lee. All three major averages at session lows right now. S p 500 down almost 1 . The nasdaq the biggest loser of the three major indices. Were seeing the biggest oneday losses in fact in more than a month. And keeping an eye on the airlines, they are down big being led lower today by delta and thats Airline Index on pace for fifth straight down day. Michelle. Im michelle carusocabrera. Thanks, melissa. Heres what else is happening at this hour. Americans made more and spent more in june. The government reporting a 0. 4 increase in Consumer Spending. Thats the Third Straight monthly increase. Personal income up 0. 2 . The centers for Disease Control awarding 16 million to u. S. States and territories to fight zika. Thats in addition to 25 million in funds at the cdc awarded a month ago. And u. S. Automakers weighing in with disappointing results. All but toyota falling short of expectation. Fiat chrysler did manage a small increase in sales however. Phil lebeau will have more on july auto sales coming up. Brian. Welcome, everybody. Im brian, hi. Your big story once again today is oil, crude oil back below 40 a barrel and it appears once again what is bad for oil is bad for your money. Some though disagree. So the big money question today, do the markets and your investments need oil to go up . Dot com which you jo dom chu here to break down the numbers. We know over the past few weeks weve seen the trading relationship between oil and stocks start to reconnect again. Remember, there was a good while over the course of the past year or so when we saw oil and stocks really trade together. In recent weeks thats broken apart a little more, but now you can see theyre starting again to maybe move to the downside together. So the question is a big one whether or not we will see energy as the big drag. Heres the fundamental story behind it. We do know that energys going to be one of the bigger weights on the overall market here. The reason why is because Energy Sector earnings within the s p theyre bad and theyre getting worse. Heres the part we have to figure out. According to reuters if all remaining Energy Companies report as expected, you can expect to see an 87 drop in profits over the same time last year. As for revenues, down about 25 from the same time. So, again, energy a big drag here. If you look at one of the reasons why this debate is raging, take a look at a couple different viewpoints here. First of all, louie says oil perhaps not the best way to go at this point. He says steer clear of most Energy Stocks since crude oil and prices at the pump are expected to fall further in the coming weeks and months. Hes one of squawk box portfolio contributors. And note held to clients, if crude holds 30 a barrel and were not far from there and estimates in the coming months, i think risk sentiment may actually surprise in august and into the fall on the upside. Bullish. I would say guys, overall, i was emailing with Mohamed Al Arian and he says its becoming harder to. Thats going to be a big theme that plays out in the coming months, guys. Over to you. Dom, thank you very much. Heres the thing, not trying to throw water on it, but i will say this. Over the last 30 days oil is down 20 . The s p 500 is up 2 . The nasdaq is up 5 . So its were down last few days, but its not exactly you call it decoupling . Because most of the first part of the year as oil fell they were together. Whats really kicked in is the performance of technology. Whereas once we had a market built on gains being made in energy and materials, its broadened out a little bit. Weve seen for instance in the past couple weeks apple up almost 11 . Weve seen biotech join in. So theres been a rotation thats been going on thats been broadening the markets here. But were you asking basically have we once again started to move with oil . That the overall market is going to be subject to it . No, im saying while weve been down a few days in a row, its been a pretty good 30 days for stocks. Absolutely. But the first half of the year, right, when oil was going down but as weve said into february the market was down. Then oil started to come up in the spring and the market started come well, well get better insight than me but i will say oil for two years was a debt and Balance Sheet story. Sure. And i think a lot of Balance Sheets have been somewhat cleaned up, not perfectly. So i think the fear of bank panic because of oil has eased. Lets get more on the markets here. As we mentioned the dow on pace for seventh straight day of declines. Thats something that hasnt happened in nearly a year. Bring in russ of blackrock, great to have you with us. Getting to the conversation we were having, oil had been a concern, what has changed in this market in your view if anything. I think a couple things have changed. When you think back to january, it wasnt just oil, it was china, concerns about the Global Economy. And whats different today is people are less worried about a pending recession. Weve seen generally strong u. S. Economic data. And i think at 40 a barrel theres some Comfort Level that oils not going to have the downward pressure on credit markets that had when oil was a 25 a barrel. So this 40, 35 level to me is critical because above that you dont have the risk of contagion into the high yield market. Thats brians point, right . Thats his point. Hes the one that runs the money. When it comes to the dow you play one on tv. When it comes to dow being down seven days in a row, can we point it all to the european banks getting hammered day after day after day and wondering if were returning to one of these awful summer of 2011s . Or is the World Economy in a fundamentally different place that they can have their european banking crisis and were going to be fine. Its not like we ever get to a point where we can put that to the side. I do think the european banks are an issue. Its mostly right now on the italian side. Its not clear thats systemic, but it does suggest europe will be coming back to this interaction between weak growth and weak banks. To that point, michelle, live from milan, i can sense it already because many of these banks are down 70 and 80 in a year, russ. Some of the biggest banks. Is there a contagion transfer mechanism at this point . Exactly. Because we have been shirking off these concerns for an entire year now. And it hasnt made a difference except for the bank stocks. Italy is tough because when you look at who owns the banking debt in italy, theyre Retail Investors. Now this becomes partly a political issue. From an Economic Perspective youd want to bail in those holders of the debt, but that becomes difficult. So contagion mechanism is the fact there could be a bailin of the Retail Investor in europe so therefore thats a cost of pressure on european economies. This create complication most likely scenario some other compromise where youre going to try to avoid that and not inflict too much pain on italian retail investment. To get to brians point, whats the hurdle to getting on a plane to cover it . Does it effect the u. S. Markets . And i dont see much evidence thus far that it does. Record intraday high yesterday, what crisis . I would agree. I think at this point what about a crisis to come . Brewing crisis. Still say crisis. When youve got the s p training over 20 times earnings, vix down at 11 or 12, wherever it reached low a few days ago, you have a little complacency and it doesnt take much to knock the market off for a few days. We love in our business junk statistics, frankly. The dow is down sevenday on pace for a seventh straight decline. Some days the dow is down like six points. Its down but down like 1. 5 in those seven days. But two weeks ago we were all cheering because the s p had set six or seven straight records. Its not oh, boy, almost said something bad there. Its not joe dimaggio street, but do we camp out any of these streets . They mean anything really . You give enough people enough spread sheets still going to come up with statistics. That came close to a career ender right there. What was it . What were you going to say . Tell us. Thats all right. Thats all right. Im literally pounding the table and i smashed michelles hand. Thats all right. Youre always going to find something up for five or six days in a row or down for five or six days in a row. At the end of the day the market had a huge run. The fact weve had a little giveback should not come as a surprise. And the fact six or seven days in a row im not sure makes a difference. But its the dow. It is the dow. Its not the s p. Nasdaqs up 5 . How about this, gold is up, bonds are up, stocks are up, wheres all this money coming from, russ . You dont even need that thing. Were all here. Keep it in, keep it out, never quite sure. Youll hear voices. Yeah. More than normal. Hopefully that doesnt continue when i leave the set. I think theres still a fair amount of money on the sidelines. And gold is a good example. Why are people buying gold . Theyre buying gold for a couple reasons, one of which is if you have an environment where real rates are basically zero if not negative, gold tends to do better. The other reason i think people like gold in the Global Allocation Fund weve got a position in it is the fact that it is a hedge. Go to individual point where credit markets have been on a run, stocks have been on a run, youre in a seasonally weak part of the year and concerns about an election, one of the questions Portfolio Managers are asking themselves is what can i have in the portfolio that will have some diversification benefit when and if we do get that next correction. All right, russ, on that note, were going to leave it there. Thank you. Thank you. We should note that right now we are at session lows. The s p 500 is down by more than 1 , 1. 07 right now. 2147 is your level. As we are hitting session lows on the major markets, u. S. Tenyear treasury yields are at their session lows 1. 51 97 . Theres a bid to safety going on as we speak, ty. All right. Three big u. S. Automakers slumping in the marketplace today after car buyers pumped the brakes just a bit after year of record sales. Are the good times in the Rearview Mirror for the Auto Industry . Or the best of times, should we say. And what impact could that have on the overall economy . Well bring you analysis straight ahead. Plus, email exhaustion. Out of Office Overload. Is your boss hammering you after hours with incessant emails . A new study says yes, and we will explain the impact straight ahead. Discover how a lexus master craftsman turns an ordinary experience into an extraordinary one. Get great offers at the lexus golden opportunity sales event. Lease the 2016 es 350 for 329 a month for 36 months and well make your first months payment. See your lexus dealer. Will your business be ready when growth presents itself . Our new cocktail bitters were doing well, but after one tradeshow, we took off. All i could think about was our deadlines racing towards us. A loan would take too long. We needed money, now. My amex card helped me buy the ingredients to fill the orders. Opportunities dont wait around, so you have to be ready for them. Find out how American Express cards and services can help prepare you for growth at open. Com. Welcome back to power lunch everybody. Im Tyler Mathisen. Investors hitting the brakes on automakers after july sales that werent quite at the pace many expected. Phil lebeau live in chicago with the numbers. Hi, phil. Hi, tyler. I call these lukewarm sales. They werent terrible. Its not like they fell off a cliff, but they were certainly not to the expectations of many on wall street and certainly for investors as well. As you take a look at these sales for july, only one of these automakers which did better than expected that was a decline of 1. 4 . Keep in mind however that when you look at july a couple of things people were focused on. Did we see big boost in incentives . We saw incentives move higher but not as much as expected. Saying the average per vehicle a little over 3,200. Thats up about 60 year over year, but it is down compared to june. Still, when you look at the overall pace of sales it is not expected to do much to help the overall sales pace for the year. In fact, most say july probably came in 17. 4 to 17. 6 million, though recently in the last hour ive seen more people say closer to 17. 4 million. And because its not higher, because its not closer to 18 million, this is what youre seeing with the auto stocks. All of them are under pressure today down anywhere from 3, 4, 5 depending on the automaker. The bottom line is this, guys, its not like people are saying we expect the auto stocks to go way down. But they do not have any confidence right now that these guys are going to see better times over the second half of this year. And thats why theyre selling them. Phil, thank you very much. Lets bring in carl brower, Senior Analyst for kelley blue book. Phil hit it right on the head as usual called it mixed. There were some positive signs. Gm sales up, overall number down because of fleet. Fiat chrysler rose, jeep up, nissan a july record and toyota rav 4 and highlander each rose 19 to best julys. Were car sales weak or just kind of eh . I think eh pretty much is the technical term youd want to use here. Like phil said theres kind of as many strengths as there are weaknesses. We arent seeing excessive inventory. Were seeing sales settle in around 17. 4 million. And thats an awfully high number. A couple years ago any Car Companies and investors would have killed for those kind of numbers. So if we settle in around mid 17s and can hold here for any length of time, these Car Companies are still making a lot of money at that level. So why are we being so sad sack about it . Its like a b student getting an aminus and being frustrated. Actually, i think its more like a student going from cs to bs to aminuses and then not getting to as and holding at aminuses and thinking the momentum suggested wed be at as by now, pluses, its like hes still a lot better than a c. Why are cars the weak spot in most of these Companies Portfolios . Trucks and suvs seem to be doing well, toyota as brian mentioned, but their car sales werent so hot. People love trucks in this country. They really do. Simple as that. Yeah. They love them when they get really good mileage which relatively speaking they get much better mileage than they did even five or ten years ago and much more flexibility. People love the flexibility of an suv. Does the proclivity of americans to buy trucks and for the Companies Thus to manufacture trucks call into question the manufacturers ability to hit the mileage standards that have been set up that i think are basically, you know, their Fleet Average has to hit a certain level. But its hard to hit that Fleet Average if mostly what youre selling is 16, 19mileagallon trucks. It is. And what will help them a little bit is a lot of these sales are going to compact or subcompact suvs that do get 25 to 35 mpg. That helps a little bit, but thats not going to get them to 54 which is what theyre supposed to be at by 2025. So, yes, that will be an interesting battle over the next couple years. Have these Car Companies proven that they can handle a recession . Or are they going to do the same thing they always do which is increase incentives dramatically, start fighting for market share and therefore hurt their profitability . Its a great question. I think theyre better positioned for a recession than ive ever seen them before. That doesnt mean that theyll be, you know, completely unscathed during a recession like any company. But i dont think theyd really hit a brick wall and wed see terrible numbers like we did in the past. I think they can actually manage it much better than usual. I think they may not make the same mistake. Theyll make a different mistake. Its like airlines, builders. They may not make the same mistake but theyll make something different. Thanks, carl. Still ahead, the unprecedented warning from the cdc over the zika outbreak. What you need to know and how it could impact your travel plans. Speaking of which Royal Caribbean shares down big right now nearly 7 . The ceo joins us exclusively in the wake of the earnings report. First though, betting on the future. One entrepreneur with the cutting edge to make it. Kate rogers joins us with that story. Thats right. How one entrepreneur went from selling cutco knives as a teen to running her own sales empire coming up after the break on power lunch. Welcome back to power lunch. Im michelle carusocabrera. Startups can be cut throat, but we found one entrepreneur that has a cutting edge on the competition. Kate rogers with more on a story that must involve knives. Kate, hello. It does involve knives a little bit in the beginning there, chantell waterbury certainly hustled from a young age selling cutco knives and actually helped her launch her business. Be creative, be confident and be you. A direct selling platform for the facebook generation. The social Commerce Company allows merchandisers to set up curated Online Jewelry stores to sell direct between customers keeping between 45 to 50 of the profit. Not like were looking to have somebody necessarily have the confidence coming in. We want to give them confidence. 70 of the companys 10,000plus saleswomen nationwide are under 34 years old working on the platform launched by chantel in 2011, a retail veteran of some 15 years, she knows a thing or two about having selling cutco knives to pay her way through college. She sold 30,000 worth to pay for first years tuition at santa clara university. Not only did i make enough money, not only did i achieve, but gave me the confidence to believe in myself to know i ran a business at such a young age that by the time i was graduating from college and i was in interviews, i was so proud.