Thought you liked to crochet, tyler. Welcome to power lunch. Im mellissa lee. Mylan says profits are 60 higher than it told Congress Last week. Well have more on that. New home sales falling in august, that drop coming in below expectations. And stocks continue to slide as we head deeper into the trading day. Look at this, dow, nasdaq, s p all in the red. Major move higher in the price of oil. Michelle . Im Michelle Carusocabrera live at Hofstra University in long island. As tyler mentioned, were less than eight hours away from the biggest event of the political season so far. The first president ial debate with the latest polls showing a dead heat between Hillary Clinton and donald trump. What happens tonight could be a total game changer in the race for the white house. Lets bring in cnbcs chief washington correspondent john harwood. Lots of expectations for tonight. What do the candidates have to do to win . Lots of expectations, big event tonight. What does history tell us about how big it is, how much a difference it can make . Lets look at what we have seen in some of the famous debates of the past. First of all, 1960. John f. Kennedy debates richard nixon. John f. Kennedy looks better than richard nixon, ends up winning very narrowly. Debates might have made a difference, not entirely clear. And go to 1980, Ronald Reagan needed to reassure americans that he was a safe alternative to president jimmy carter who is very unpopular at that time. He did it, he ended up winning big. But reagan also had the momentum going into that debate. Then look at 2012. Barack obama had a lead over mitt romney who had his infamous 47 remark and lost ground. Mitt romney won that first debate, he moved ahead in the polls, but the advantage was short lived. Ended up fading and barack obama won a second term, of course. But heres the debate that may have been most decisive and that is in 2000, when al gore faced off against george w. Bush, al gore was a sitting Vice President , he went into that debate as the experienced guy in federal policy, somebody who knew more on issues than george w. Bush, but george w. Bush emerged as a more likable candidate, and someone who is an acceptable alternative. Take a look at the polling from gallop, very dramatic. Before the first debate in 2000, al gore had an 8 point lead coming off a successful convention over george w. Bush. After the first debate, that lead had been erased. After the second debate, george w. Bush had a twopoint lead. After the third debate, he had a fourpoint lead. Now, he ended up losing the popular vote to al gore, but he became president in the head winds he got from those debate may have been an important factor. As for the job that each candidate needs to do tonight, donald trump faces an electorate where a majority say hes not experienced and doesnt have the right temperament to be president. He needs to change some of those minds. Hillary clinton is accepted by americans as someone prepared to be president. David plouffe said tonight, this debate tonight is 75 of the rest of the entire campaign. How will we know whos won . I ask that in the context of im the first to admit im establishment, right . When donald trump said what he said about john mccain, i thought it was over. And it wasnt. His ability to say things and do things that actually end up helping him, i wonder if we all sit there and watch tonight and say, oh, there was this gaffe or that, and ultimately it turns out we didnt hear them the way the electorate does. Thats a very good point. And those judgments are susceptible not only to what we say, but what people say on social media. Talked about that 2000 example a minute ago, when gallup poll people after the debate, more of them said al gore won the debate. But al gore lost in the spin room. The Bush Campaign very skifl skillfully that hurt al gore badly. The difference between 2000 and now is that a lot of that xh commentary will begin on social media moments into the debate. How that consensus evolves, how it influences news coverage, how it influences voter reactions is going to be very big. Social media is the new spin room, isnt it . Exactly. What a dramatic change. Go ahead. What are the Campaign Strategies for handling social media as the debate is unfolding . I imagine they have operatives, people controlling the message, helping to shape the message and there is a strategy going into tonight. Well, it has been very transparent in terms of what the strategy is. The Clinton Campaign is going to be trying to make the case that donald trump is light on policy, that he lies, that hes saying all sorts of things that arent true, the Trump Campaign is going to portray Hillary Clinton as somebody who lies, she has a problem with honesty as well in the eyes of the voters. And theyre going to try to present her as an overbearing know it all, just the way the Bush Campaign did about al gore, 2000, that was effective. Well see how effective either side can be tonight. What we do know is that donald trump is close but hes slightly behind Hillary Clinton. He needs to generate some movement, get more voters than he has right now. And the voters that he needs are more likely to be College Educated whites who were not his base in the primary. So the same things that got him that support among noncollege whites that intense zealous support may not be the same things he needs to do tonight to expand his base. His famous comment, i love the uneducated is reminiscent. Im reminded of that. And they love him. So, yeah, they do indeed. So are there ground rules we need to be ware of, number one. We know the moderator is lester holt of nbc news. And is there a framing of the content in the past, some of the debates on Foreign National security policies, on the economy, on other things. Is there that kind of framing tonight or is it just a free for all . Well, there is, tyler, but the framing is so broad that i think it will be a free for all. The buzzwords that were put out to describe the content of the debate can encompass pretty much everything. Now, i think that lester health, our colleague, we know hes smart, hes an excellent broadcaster. Hes also a very decent human being. So i think his style, i think, is one of the least unpredictable things about this debate. Hes been getting pressure from the Clinton Campaign, to aggressively fact check donald trump, the Trump Campaign says that would be inappropriate. The Debate Commission sided more with the Trump Campaign on that. And said it is the job of Hillary Clinton to fact check him. So well see how that goes. But i think both of these candidates we know what they need to do, the question is under a microscope that is more exacting than any that they have seen, larger audience, 90 minutes of time, thats a lot of time to talk, how do they perform . John, exciting. Thanks so much. John harwood covering it all day. Be sure to watch cnbc tonight. Were going to have full live coverage of the first president ial debate 9 00 p. M. Eastern time. Dont miss it. Lets turn to the markets here as we count down to tonights debate. Stocks lower. Dow down triple digits now. Close to session loews ws on th s p. To dom chu. A lot of the buzz so far today has been about the debate and what john harwood and what Michelle Carusocabrera, you guys were just talking about. Thats going to play in a little bit of the narrative. It is not all about the debate now. Were seeing some strength and weakness in the places you suspect to see them. First of all, with the dow down 137 points, youre talking about near the lows of the session, hovering just above there. With regard to the outperformers, you got energy. Probably one of the positive sectors, if not the only positive sector out there. Utilities and reits, those Interest Rate sensitive stocks that tend to hold up better when the markets go down, theyre outpacing the overall market as well. Health care, financials and technology among the biggest laggards today. Kind of a little bit risk on, risk off, if you want to look at it in those particular terms. One of the other things we want to talk about today, it is not about the down market overall, you got a big deal here for the exchanges. This is Cboe Holdings going out and buying bats Global Markets. Not a massive deal, 3. 2 billion is pretty sizable. In this case here, youve got cboe buying them for a mix of cash and stock. Works out to be 32. 50 for each share of the global market. Still, debate narrative plays in the trading, so does the price of oil. Well see if the volumes pick up into the afternoon part of the session. Back over to you. Dominic, thank you very much. So up next, what wall street is watching ahead of tonights showdown. Debate, the election. And your money straight ahead. The clock is ticking. The anticipation building. Power lunch will be right back. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . Announcer are your children in the right car seat for their age and size . It may be too late to check when youre on the road. [blaring car horn and skidding] fortunately, youre on the couch. Welcome back to power lunch. Im seema mody. Shares of nike falling 2 , making it one of the dows worst performers today. Jpmorgan cutting the nike price target to 62 from 67, blaming softer north american trends. It comes hours before the Sports Apparel brand is due to report earnings. Wall street is expecting nike to earn 60 cents a share, 11 cents less than the same time last year. The company has been facing stiffer competition from brands such as under armour and adidas. Back to you. Seema mody, thank you. We have a news alert in the bond market. Two year notes up for auction. Lets get to rick santelli. How did it go, rick . It wasnt a very notable auction in any regard other than average weakness. I gave it a c minus. Charlie minus is the grade. 26 billion two year notes hit the streets moments ago. The yield at auction,. 75. 3 4 of 1 . If you look at the metrics, 2. 65 bid to cover, pretty light. The only metric that was remotely above its ten auction average and not by much was direct bidder at 19 versus 18 ten auction average. Dealers take a rather large 44. 4 primary dealers of the auction. So c minus tomorrow fives followed by sevens, an important auction, but longer maturity, the more important. Back to you. Rick, thank you very much. Stocks are jittery ahead of tonights debate. The dow down triple digits, lets bring in Julian Emanuel and jonathan gollof. Great to have you here. Let me start by asking, is there anything tonight on the debate that could really destabilize the market . I cant think of two candidates we know better than these two. Were familiar with them. Well, so our expectation is, if you look at it factually over the last month, the uncertainty has begun to build. And by most tally the uncertainty between these two is really at about the maximum point. We dont think that there is going to be any more resolution of that uncertainty tomorrow. And by that token, we think the markets could continue to be under pressure. A choppy and maybe down pressured market over the next few weeks. Entirely possible. Jonathan . A couple of weeks back, donald trump stood in front of the Economic Club and laid out what seemed like a very centrist conservative republican platform for growth. Almost sounding like Ronald Reagan in the way that he talked. And i was really surprised at how well it resonated with big institutions who were there to hear that. This will be the first time tonight that he may lay out that kind of plan for the American People and whether they buy it the same way. You think the risk is to the upside then, if he continues to lay out the centrist plan, that america could actually go for it and the markets could go higher . His story was, it sounded like jack kemp was talking, less regulation, lower taxes, dont worry about it, youll make it up in growth, so there wont be any larger deficits. And so i think that we havent yet heard that rolled out to the American People. That may be the surprise. Hillary clinton made other comments which are pro growth, but this may be a big issue for the market. Lets take it out of the political context and put it back in the economic context. Are earnings likely to be is the economy right now Strong Enough to justify stock prices at the levels they are . The economy is Strong Enough, we think so. What we think is the disconnect is that expectations for 2017, which is running approximately 14 , were closer to 6 are too high. Future expectations. Noermally that wouldnt bothr us too much. Where risk is low as measured by the volatility index, when you have political uncertainty, when you have an economy that, again, looks okay, but just chugging along, and youve got issues in europe as well, we think it is the conditions for applause are here. Some might argue that allows people to stay in the markets and stay long the stocks, might revise lower because they can buy the protection or participate via options. That could actually it is actually a good thing. Thats part of the reason why stocks are at these valuations right now because volatility has stayed so low. Normally we would see that, melissa, but what we have seen over the last course of the summer is actually people are selling protection to go for yield rather than buying it at these low levels and thats a concern to us. Jonathan, what do you think about earnings and are earnings going to be Strong Enough to justify, where are we 2150 on the s p, where do you see it at end of the year . And im kind of in the camp that julian is in that i think were in a generally weak earnings environment. Next years numbers are too high and theyll come down. But the reason the stock market has been ripping really since february has nothing whatsoever to do with corporate profits. The fact that the total yield, dividends and buybacks is almost a 5 yield in an environment where Interest Rates no matter whether you look at Corporate Bonds or government bonds are just substantially low. So as long as you dont have something blow up in corporate earnings, it is more than enough to keep stocks moving higher. In terms of sectors, tonight with the debates, well be watching financials and health care tomorrow. You say the health care is overly discounted the political risk, even on a day where were continuing to get more mylan headlines about overstating profits to Congress Last week. It looked the fact is is that whatever the makeup of government is going to be next year, it is very difficult to enact legislation to regulate the sector. But at the same time, earnings expectations for health care are actually below that of the s p for the first time in a number of years while valuation is at 25 year lows. So you would buy . Yes. Jonathan, did i hear you right, you seemed to suggest that the reason stocks are as high as they are, is because of financial engineering. It is not financial engineering. What you have is that stocks right now are spitting back a ton of capital back to shareholders. Whether it is a dividend or buyback, companies are taking a lot of capital and returning it to the marketplace. The dividend yield on the market is 2. 2. Tenyear bond yield is way below that, thats not engineering. Companies are buying back shares. Not issuing debt because 100 of the buybacks now are covered by Free Cash Flow from operations. So in that world, where so much capital is being returned, stocks just looked too they looked undervalued for what theyre delivering and so you can call it engineering, but i dont think it is. Okay, thanks. Appreciate it. Jonathan, good to see you. Jonathan and julian. Up next, talking oil rigs, medical marijuana and one mountain of the mist. Good, bad and just plain ugly. Why disney is no longer a slam dunk investment. We have the call of the day when power lunch returns. Welcome back to power lunch. Time for the good, the bad and the ugly in todays trade. First to the good, gw pharma. The company developing drugs from the nonhigh inducing part of the cannabis plant. Thats the part that gets you, you know. It is up 11 , no more than that. 16 on phase three results, phase three, in a rare brain disease. On to the bad, veil results, that stock under pressure after the Company Reported a bigger than expected loss for its First Quarter at about 2 . And from bad to ugly, an ugly day for Deutsche Bank, look at that, the shares hitting record lows with investors fearing the bank will have to raise capital after the Justice Department reportedly proposed a 14 billion fine. That was a couple of weeks ago, relating to an investigation into Mortgage Backed securities. Right now, down 7 . Melissa . Tyler, shares of disney are down 1 right now and more than 12 so far this year. Drexel hamilton downgrading the stock today saying it is no longer a slam dunk investment as a new nba broadcasting deal takes effect. Joining us on the phone, analyst behind that tony wibel. Great to have you with us. Thank you for having me. The primary driver is that nba renewal but it sounds like the nba renewal cost was a straw that broke the camels back. You have a litany of ot