The stock. Hell be here to explain. And the sooner state oil boom. Brian sullivan drills down in americas hottest new energy hub, oklahoma. And he will join us live. Power lunch starts right now. Welcome to power lunch. Im melissa lee. Stocks are down big as fears of a coming rate hike rattled the markets. Take a look at where we stand in the markets right now. Dow, s p, nasdaq all near session lows, for dow 230 point loss, nasdaq being hit hard as people are taking profits in technology down by 1. 6 now. Big moves also in rate sensitive sectors, utilities and reits solidly in the red right now, michelle. Yeah, they sure are. Im michelle carusocabrera. Heres what else is happening at this hour. General motors recalling 4 million vehicles worldwide for software defect that has been linked to at least one death. The white house vowing to hit north korea with new sanctions following a nuclear test. And the house unanimously passing a bill allowing families of 9 11 victims to sue saudi arabia. President obama has threatened to veto the legislation. Checking on oil, its getting impangted by the rise in the dollar and Interest Rates today just like stocks are, crude down nearly 3 and thats having a big impact on the energy stocks. Brian sullivan live in Oklahoma City digging in on that for us today. Brian, what do you have out there . Reporter michelle, thats exactly the reason why were here. What if this is the new reality . What if the oil bulls are wrong and were not going to 60 or 70 in the next 12 to 18 months . What if we stay around the 40 or 50 range or go lower . Is anybody making money . Weve talked a lot about the permian play, pioneer for one, but we had to come to oklahoma. There are two regions here, the scoop and stack. Well explain more about what those names mean coming up in just a bit, that may be overall the lowest cost production region in all of america. Weve got a big show. Weve got the ceo of devon energy, ceo of warwick energy, thats where we are today. Big show from oklahoma. Whos making money at 45 to 50 a barrel . Were going to find out. By the way, rig counts, if its a friday, they just came out. In fact, oil rigs up again. So we were flat basically the last two weeks. We saw a gain of i think 7 oil rigs this past week. So the drillers are back in action. We were on one of the new drilling rigs by the way yesterday. We got a lot of good stuff coming up from oklahoma as well. Michelle, back to you right now. Going to be great. Thank you, brian, looking forward to it. Market has broken out of its nonvolatile slumber. Remember weve been talking days where we havent had a 1 move to the upside or downside . Thats different today. Bob pisani at the nyse with whats driving the action. Its Interest Rates, isnt it, bob . Absolutely. Remind everyone why exactly the dow is down 208 points. The main catalyst mr. Rosengren at the federal reserve. Everyone surprise hes been dovish in the past. Gund lock talking about Interest Rates have bottomed and be aware of that. And ecb started pat and started really the day before. Lets look at the sectors and of course the ones hit most are the most Interest Rate sensitive. Utilities and telecom and Consumer Staples that often pay high dividends. They compete for yield. Beneficiaries, well, you can bet Insurance Companies have had had a terrible time in this slow Interest Rate environment are doing a little better today. So your metlife and lincoln and prudential, even Like Deutsche Bank for example, citi group as you can see most of the u. S. Banks are down fractionally underperforming the rest of the markets. Big risk off day, but you think thered be bigger moves in some of the high beta names. Remember big market leaders recently like google for example or ebay. Theyre all to the downside but not dramatically. Energy stocks here, big up day yesterday on the inventory drawdown. Not today though. Most of the big names down three, four or 5 . Back to you. Bob, thank you very much. Lets talk more now about todays market action. Joining me now, john staltfus, chief investment strategist with oppenheimer management, also cnbc contributor tim seymour, gentlemen, welcome. Good to see you. John, can stocks continue to rise if Interest Rates are . I think so, tyler. In the past they sure have. If you look at the last time the fed raised rates from the end of june 04 to the end of june 2006, the s p was up about 11 . My recollection is the smalls and mids were up around 20 a piece. Initially the market gets a little bit nervous. But then once it realizes higher rates mean things are getting better, perhaps we can see some better options. Tim, is this true if were not just looking at a one and done or two and done rate move but the change of a cycle to a longer term process of raising rates . Right. Well, tyler, thats what was concerning about rosengrens comments. This didnt sound like get one or two outd of the way in 2016. This sounded like the fed is talking about some endemic inflation problems, which a lot of people can make that argument for and that this is a rate hike cycle. But as johns pointing out, you cant have it both ways. The people that have been bearish on stocks have been people say rates are going lower, the global economys nikkei and if anything this is endorsement for yes, we may have bubbles in certain asset prices, obviously what the fed was trying to engineer. Is the fed going to suddenly go to the other spectrum of being overly extreme when no one thinks they should be an economy can withstand five or six or zempb ra seven rate hikes. So, you sound sanguine. Yeah. And yet if im going to make a choice about sectors, you see the way utilities are acting today at this minor whiff, if we really start to think this is going to be reality, should you avoid those sectors now . Weve been underweight utilities and telcos since the beginning of the year and underweight energy. Were long the and overweight cyclicals, industrials, materials, technology and consumer discretionary. And specifically utilities because theyre Interest Rate sensitive. Because theyre Interest Rate sensitive. In addition to that as the year progressed theyve become increasingly overvalued. Theyd already given back about a quarter of their gains from the start of the year to june as of last friday. Doesnt the hawkishness this time around feel a little bit different . Because theres this notion that were in a state where its very critical. There are two paths to be taken. You either step aside and risk the overheating economy and overheating asset bubbles essentially, i mean, thats what i read. Those are my words, not rosengrens words, or you go the other way. It almost sounds like the fed has to thread a needle. Maybe thats why markets across the board are selling off. Were not just seeing dividend yields because if things were getting better, we wouldnt necessarily see Technology Getting hit so hard, financials getting hit to the tune of 1 right now. Most of what i think here when you look at this its very simply the fed is managing the markets expectations. And last over the weekend when we wrote our weekly piece, when we looked at the vix we said with the vix at where it is, and where you had the fed, you have global geopolitical situations, the elections, all of this stuff. We said the market will not tolerate any complacency. And i guess it didnt. Tim, jump in on the financials number one. And number two, if you wouldnt mind addressing the idea that potentially rising rates may take a little wind out of the sail of the dividend sort of fanaticism thats been at play for the last year or so. And they should. I mean, lets face it. Consumer staples and defensives that are not utilities and mlps and things i actually think do warrant an allocation even in this environment, youre not spending 25 times for clorox. You should not own General Mills and kelloggs in this environment because the growth just isnt there. But when you look at certain parts of the market, so people look at the s p and they try to make an assessment on an entire market. Underneath the surface, financials arguably have never been cheaper. If you think about where these guys are in terms of balance sheet, about to withstand Credit Impact from maybe rising rates and maybe the Energy Sector, people overdid this the first time. It will be a huge opportunity if you get that financials get sold even more because theres some fear that, hey, Oil Companies were talking about oil at the top of the show, financials to me have probably never been better positioned for this part of the economic cycle. Theyve got operational leverage. I think airlines are priced at recessionary levels. Interesting time. Melissa, your question, and also to mine i think about what do you buy or sell now based on Interest Rate sensitivity . If you think that the entire market has been boosted by these low Interest Rates, everything is Interest Rate sensitive now. Absolutely. We were talking to, tim, remember we were talking to j. P. Morgans head of strategy said basically theres a certain percentage in the market that was there because of what the fed is doing. So if you think thats going to start to unwind, then theres this notion embedded in stocks that that also, that premium, has to unwind. Its got to come out of everything. The helium comes out of the balloon. Well, i think it comes primarily out of the defensives and the cyclicals have a good way to run here. Guys, we got to leave it there alas. Thank you, john. Have a good weekend. Tim, good to see you. Now to the bond market, Rick Santelli knows a little about rising Interest Rates tracking the action at the cme. Hi, rick. Hi, tyler. Indeed we can debate what Central Banks are going to do, not do, what they should have done, but in the end the market is voicing a bit of an opinion here. Especially with the catalyst of mario draghi yesterday. Stimulus and low Interest Rates, were all tied at the hip with all Central Banks. So did mario draghi give us a glimpse into his future, or did he give us a glimpse into what he thinks the feds future, what their rise in rates . I cant tell you that but look at a twoday of twos, twoday of tens, a week ago we settled 1. 60 on the tens. More importantly start out in early june, we have broken through a range. We have been putting weights on a spring with regard to much of the sovereign market now for the last six weeks. Now the spring is about to pop. And keep in mind theres margin calls going on here that may have started in europe. So as you look at sixmonth charts of the bunds, gilts and what you want to understand is theyve added pingpong into the olympics. This is margin pingpong and could get a whole lot rougher. Back to you. Rick santelli, thank you. Four chairs along with pressure, automaker lowering profit outlook after doubling size of massive recall. Ford announcing a series of investments in the ride sharing space and partnerships with major cities to help ease traffic congestion. I sat down with ford ceo mark fields a short time ago. How do the efforts today, mark, to improve and expand mobility and transportation in major cities, how does that help ford sell vehicles . Well, overall first off it expands our business. First off, you know, were taking a point of view of the world that the world is moving from just an ownership mindset around transportation to a shared mindset. And so we have a wonderful business around how people come and buy and own our vehicles. This is an opportunity for us to expand our business to Mobility Services, and also to touch folks who may not ever own a car or ever have any exposure to ford. So this is about not going from an old business to a new business. Its just expanding our business and filling an unmet need, particularly for cities that want to solve some of their congestion and mobility issues. How does that Services Model work . How should investors think about that when youre investing in things like crowd source shuttles as well as bike sharing, things that may not necessarily have anything to do with the fseries pickup for instance . Well, i think the Way Investors should look about is we have this core business which has turned record performance with us last year in terms of financial performance, the first half of this year alltime record performance. But when you look at these Mobility Services or the monetization of the use of our product, it is completely aligned with our what i call our why of our company which is making peoples lives better and changing the way the world moves. When you look at these upside opportunities on some of these emerging opportunities, we think its quite compelling. Is this essentially admitting or conceding that perhaps the best days for vehicle sales may be behind the industry . Well, overall when we look at growth around the world, our core business is still a growth business. When you look in places around the world, whether its asia pacific or otherwise, this is still a business thats going to grow at a fairly good compounded growth rate for the next number of years. But at the same time as these these Services Come on, you could argue that it would decrease, for example, car usage or density in major urban areas. And thats why were embracing the sharing and the Services Part of our business. Because we think it will allow us to grow and compensate for any kind of detriment we see in the actual number of vehicles in downtown areas. I want to pivot now, mark, to what youre seeing in the business right now in terms of customers going out there buying new vehicles. Do you see any speed bumps, excuse the pun, a rate hike, are those reasons for consumers to hit the pause button on buying a vehicle . Well, i think consumers are they get impacted by a lot of things. And obviously during an Election Year and things of that nature you could argue that theres an impact on the demand for vehicles. But our point of view is that weve probably plateaued as an industry. The Auto Industry overindexed if you recall versus the general economy when we were coming out of the great recession, so we benefitted from that. What weve seen in the Second Quarter of this year, weve actually seen the Retail Industry down slightly. Weve seen incentives up in the industry. Still the industry Retail Industry is still at a fairly healthy level, but clearly we think that most of the growth is plateauing at this point. And were prepared for that as a company. Auto loans have been a huge driver to record sales levels that weve hit, mark, so im wondering another quarter point hike higher, is that going to make a difference in terms of consume consumers ability to buy cars . Do you think that will slow down the pace . Well, it could impact it on the fringe, particularly folks that have extended length payments that are, you know, on the fringe of either buying a new car or used car. But we have to step back and take a deep breath because when the fed is looking at raising Interest Rates, theyre looking at the economic activity. And if theyre thinking of raising Interest Rates, that means the economy is doing fairly well. Thats good for the economy. And thats good for our business. All right. I want to get to the recall, mark. 640 million charge because of that expanded recall due to the faulty door latch. Is that contained to the Third Quarter . Are you confident that that is an issue that is behind the company at this point . Yes, we announced yesterday at the request of nhtsa we have expanded what was a regional recall. And we announced it was going to impact the Third Quarter to the tune of about 630 million, 640 million. And, yes, that will be booked in the Third Quarter. All right, mark. Thank you very much. Appreciate it. All right. Thank you, melissa. Still to come here on power lunch, the sooner state oil boom, who are the big players . Whos cashing in . Well head back out live to Oklahoma City next. And stocks hitting session lows as the selloff accelerates. As we head to break a look at the sectors now, all major s p 500 sectors in the negative. Financials holding up the best, but still negative. Power lunch back in two minutes. What if a company that didnt make cars made plastics that make them lighter . The lubricants that improved fuel economy. Even technology to make engines more efficient. What company does all this . Exxonmobil, thats who. Were working on all these things to make cars better and use less fuel. Helping you save money and reduce emissions. And you thought we just made the gas. Energy lives here. When you cook with incredible thingredients. Ato. You make incredible meals. Fresh ingredients, stepbystep recipies, delivered to your door for less than 9 a meal. Get 30 off your first delivery blueapron. Com cook. This is the new comfort food. And it starts with foster farms simply raised chicken. California grown with no antibiotics ever. Lets get comfortable with our food again. Take a check on the market selloff we have on our hands right now. We are just about at session lows across the board. The dow is down by 269 points, s p down by 36, thats 1. 7 to the downside. And nasdaq composite is down by 95 points, a loss of 1. 8 . A lot of the sectors we saw really being bid higher in the past month or so, people are taking profits. Semiconductors for one down about 3 so far on the session, utilities, telecom, dividend yielding sectors also sharply lower today. Oil also lower in the face of stronger dollar. Oklahoma quickly becoming americas hottest new energy hub. Hows i