A selloff in the markets. Another 1 move to the downside. Thats three in five sessions, actually. The fed minutes, as we said, coming this afternoon. Yum cutting its forecast for the year. The scandal in china continues to weigh on sales. Jcpenney is holding its investor meeting today. The stock has almost doubled since february. Is jcp really back . More retail numbers today. Costco earnings are out. Theyve beaten estimates on the top and bottom line. First up, stocks are looking to shake off Global Growth numbers. The dow suffering its worst day since late july. The s p falling 1. 5 , settling at the lowest level in almost two movanths. The worst day for transports in about eight months. Oil today below 87. If cramer were here, he would say that is pointing to real demand concerns around the globe. A sign, as you say, of just slowing growth around the world. Thats the key. When you talk to people this morning as i did or even late yesterday, first thing they catch is oil. Down today another 1 . The bond market is telling a similar story with the tenyear hitting 234. The lowest level since august. The 30year bond yield hitting its lowest level since may 2012. So were seeing sharp moves in the bond market. Today the focus is going to be on the fed with the minutes out at 2 00 p. M. Minutes from the last Federal Reserve meeting. Jeff lacker of the richmond. Writing, the feds mbs holdings go well beyond whats required to conduct monetary policy. Talking a little bit about distortion. As this debate heats up about how theyre going to exit all this policy. Nobody heard them saying yesterday that rates in 2015 shouldnt go up at all. If a fed president speaks in the forest, does anybody hear it . My question would be why suddenly the markets have turned. Nothing is particularly new that we heard yesterday. Jimmy was making the point, maybe its about market positioning. It would be interesting as we work our way through the hour to find out now why people have decided to sell. Is it because qe is coming to an end and theres a vacuum of liquidity . Is it because earnings season is a good starting point to sell the market . Thats really what i think we have to try and find out in the next 60 minutes. All right. Were going to talk about that right now. The stocks look to recover from their worst session in over two month. Lets bring in the chief Investment Officer and executive Vice President of vimo private back. Also, the managing director and principal at douglas c. Lane and associates. Jack, why now . I think part of it is what simon mentioned, the end of qe. Even though it seems like the fed really doesnt have that much influence over intermediate term Interest Rates anymore. The other is the fact that we had a lot of gum flapping from mario draghi and not much action. Now it seems as though perhaps germany has put him under their thumb somewhat, even though theyre seeing some downward pressure in their economy. They really dont want any monetary stimulation. Theyre preferring to try to do things on the fiscal side behind the scenes. People point out, look, the dow is only down 3 . Russell is in a worse situation, back in correction territory. Are you on the lookout for forced selling, either in small or large caps now . Actually, i was on the lookout for forced selling in bonds with the bill gross departure. One of the things the first thing i looked at were the pimco bond funds to see if they were going to trade at a substantial discount. They went from a 60 premium to a 10 premium. I think theyre still somewhat in denial around there. Im surprised. I actually think the bill gross departure is a watershed event for credit. Weve got tens to 30 billion of bonds coming into the market. I want to focus on that. Hes built big positions without moving the market that much sometimes. When youre talking about that, what are you talking about in particular . Sure, so lower quality, some of the out of the way sovereigns. Youre right. He was able to build positions in smaller sizes. Now that all of this is coming out at once in tens and 20 billion pieces and there are no more trading you sounds pretty optimistic its going to be that bad. Thats a lot. It hasnt come out in that way yet. Well, i think they lost 20 billion in assets in their first day. Theres a lot of money coming out. What about these factors . I mentioned bonds. The 30 year. I think i said 2012. Its actually may 2013, the 30year bond yield. Either way, what were seeing with oil and bond and now into equities, what sort of picture is that painting . I think what youre getting is a deflationary picture. Investors are afraid that, here we go, europe, tenyear in germany is below 10 . U. S. Is now 2. 3. Where is the growth going to come . Lets stell off the momentum stocks. Health care, staples all doing well. The Inflection Point coming now is earnings are coming up. Are we going to have companies that use this as an excuse and say, well, the dollar has become strong, we have no pricing and things are flat, or are we going to say, we have a nice tail wind because Energy Prices have come down, we have great balance sheet, and we actually have growth but its moderate growth. Were in the camp of there is moderate growth. This is going to be a Good Opportunity to get some really highQuality Companies because you have seen a lot of Companies Sell off, even though the markets only down 5 or 6 . Feels a lot worse. Jack, your main clients, youre an ideal person to have on a time like this. What do you say to people primarily interested in protecting what they have . Right now were staying put. We did reduce our credit exposure in may and june. We thought it couldnt get any better than it did. Do you think youll be wrong on that call . Right now were holding dry powder. Im hopeful we get spread widening, some sort of an event. And equities . In equities were holding firm. Thankfully we were underweighted in small caps because they were expensive. We do own europe and were hedging the euro back. I think its this week thats going to help us decide whats going on. Lets see what happens with earnings. Weve got something that we can sink our teeth into, you know, to say are Companies Going to blame the dollar or are they going to embrace lower Energy Prices. Well see how that shakes out. People are saying dollar is the new weather. Absolutely. Polar vortex. Take, for example, Spirit Airlines today, warning about operating margins. If an airline cant benefit from lower that makes. Absolutely no sense. Yeah, thats a little different. The other big three, american, united, delta, are all doing fine. I think oil prices really helping them. Spirit might have some issues that i think are fundamental to them. You know, the other transports are doing great. This is a great opportunity for any company that has input price attached to energy. I think thats something to watch for. The canary in the coal mine or just a oneoff. A question on sentiment here as we see these sharp slides in the stock market. Is it bringing the bears out . Or is it a feeling of we have to make some new lows or a correction here to make new highs . I think its a combination. People have been so focused on the negatives. Now the bears are coming out saying, look, we told you this was going to happen. We told you growth is slow, deflation it here, and now the dollar has become stronger. There is no growth. We should be in credit. The tenyear is going to go to 1. 5. Youll see that. Youll see the momentum, the quick sellers get out. I think for us, the opportunity is going to be finding these good, Quality Companies when everybody else doesnt want to hold them again. Sarah, i know youre a currency expert. Thanks. The fact is the dollar was cheap. On a fundamental basis six months ago, the dollar was probably 10 to 15 cheap to the euro. It was certainly 25 cheap to the aussie dollar. So in other words, its getting back to fair value and not any kind of crazy overvalue. The tail wind may be gone, but i wouldnt call it a head wind. Let me put it around the other way, which is how a lot of currency players would suggest. Actually the fed was good at winning the currency wars. Now its failing to win that. Draghi got the upper hand. Thats the issue. The fed would really like to push the dollar down. That could feed through to what they say over the next few months. Youre right. For the last 15 years, the fact is the euro has risen 35 against the dollar. Thats been a huge advantage for us. Maybe its now that we pass the baton to europe, let them ease their currency. This is really our premise. We have to end it, but jack, the stock market and the dollar can rise at the same time. Absolutely. Thats my view. Look, i could talk about the dollar all day long, but we have to leaf it there. And you sometimes do. Thanks for joining us, helping navigate through these bumpy markets. As we kick off earnings seasons, lets focus on yum. Reporting lower than expected results, this as comparative sales in china, which is its largest market, fell 14 due to the food safety scare there is amid allegations that a former supplier used expired meat in part, though they would argue that isnt the main focus of their business. Overall, samestore sales to kfc and taco bell each rose 3 while pizza hut fell 1 . Actually, outside of china and india, kfc did really well. Sales up 8 . Operating profit up 16 . I think a lot of smart people knew the market was not where yum would report and its samestore sales would be much worse. On past evidence, as pointed out, when they last had a poultry scare in 2012, it took five quarters to turn that around. Thats arguably what youre witnessing here. Its going to take time to correct. Yeah, and they do lower Earnings Guidance for the year. Now looking at six to person versus a prior 20plus. Also, operating margin down 270 basis points. They cant give the chicken away in china right now. And thats sort of where im reading some analyst notes this morning. Really hard to see when traffic is going to come back. You mentioned the previous scare in 2012. An analyst at wells fargo points out that after then it was followed by an avian flu scare so its a little harder. Same with their episode in 2005. They are looking for recovery in china. Samestore sales growth in 2015. Its just hard to tell when its going to get there. The question, is it a buying opportunity on a big franchise . Correct. This could be opportunity. Unusually, the yum call goes on now, the morning after. More comments, more color from the executives on the call this morning. When we come back this morning, should you be buying into jcpenneys turnaround strategy . The retailer posting an analyst day this morning. Interesting headlines coming out. Well get a live report from that event coming up next. One more look at the premarket. Not much energy after that drubbing yesterday. More squawk on the street live from post nine at the nyse when we return. I was out for a bike ride. I didnt think id have a heart attack. But i did. Im mike, and im very much alive. Now my doctor recommends a bayer aspirin regimen to help prevent another heart attack. Be sure to talk to your doctor before you begin an aspirin regimen. Jcpenney is hosting its analyst day as we speak. Courtney raeagan is at the even. We going to hear a plan for longterm sales growth . Thats what everyone is waiting for inside. That financial presentation is still probably a couple hours away. It is jcpenneys first true big company organized Analyst Meeting in about three years. Ceo mike allman started off the event very simply, with little fanfare, no big presentation music. He simply came out and began going through the state of the company, where the company is and perhaps some Growth Initiatives, though not going into much detail. He said in july we had the same number of active consumers as we did in 2011. Some of the Growth Initiatives that he listed off are the center core, the home store productivity, as well as omni channel. A key theme so far has been some references back to the johnson era and simply how far the company has come. Its been 18 months to the day since mike ullman came back. He said, look, the customer now knows we like her and we want her back. Cmo deb burr man also started her presentation with a quote, theres a fine line between love and hate, also presumably a reference back to what johnson had done when everyone said he more or less fired the customer. So lots of references to how far the company has come. They did a bit of a fashion show with some of the new styles that we can see for men and women. It actually was fairly impressive, in my very humble opinion. But we are yet to hear about any financial goals or any update on what exactly is happening with mike ullman and whether or not he will remain in the ceo position for some time or not. Last we knew, they were still undergoing a ceo search. The company also saying that they have added a board member this morning. Craig owen, he is the retired cfo from campbells soup. Carl, back to you. Courtney, let me come in here. The stock has been under pressure for the last month. Its down even with the rise today, about 14 . There is some speculation they might announce mass store closings. 30 or 60 more to take them to about 1,000. Do you have any information on that . Is that what you would expect them to say today . To be totally honest, i wouldnt expect massive store closings, simon. Its not because perhaps the company wouldnt want to do so to make the fleet more efficient, but simply because its very hard to do because of the way that the leases work. They dont own as many stores as maybe some other retailers. So its not totally in their control when they can close stores. Also, its very expensive. Remember, one of the key things theyre working on is cost savings. So you dont want to completely offset the cost savings with what it actually costs to wind down and close a store. So its going to be something that will come up. It will be asked. I dont expect massive store closings. All right. Speaking of expensive, a lot of analysts argue that the stock still reflects a multiyear turnaround. Well see if it gets any action today. Courtney, thank you very much. Meantime, shares is of costco moving higher in the premarket. The warehouse retailer Beat Estimates on the top and bottom line with its latest earnings report. Helped by both higher sales and increased revenue from membership fees. Take out currency, take out fx, comps are up seven and six in september. So the quarter managed to get out on a good note. Apparel was one of the strongest items along with household wares. Costco, of course, an Annuity Business to a large degree because of the membership fees. Stocks up 17 this year. In a world that increasingly believes in discounting or a retailer that in the back to School Season was demanding discounts. After four straight eps misses, the fact this was such a big beat is actually good. Could signal the beginning of an upward revision cycle. Obviously investors like it too. The reaction has been positive. Surprising misses earlier in the year. No doubt about that. When we come back, coming off of yesterdays selloff, well talk to art cashen what about hes expecting from todays trading session. Take one more look at the premarket on this wednesday. A lot more squawk on the street from the nyse is straight ahead. How do you beat the number one seed . You just have to win 70 of your points at net. And keep unforced errors under 10 . On the ibm cloud, the us open analyzes 41 million data points from 8 years of competition to uncover key insights. Data can help show you how to win, no matter what business youre in. Today theres a new way to work. And its made with ibm. And youll see just how much it has to offer, especially if youre thinking of moving an old 401 k to a fidelity ira. It gives you a wide range of investment options. And the free help you need to make sure your investments fit your goals and what youre really investing for. Tap into the full power of your fidelity green line. Call today and well make it easy to move that old 401 k to a fidelity rollover ira. Just about 7 1 2 minutes before the opening bell. Lets get to director of floor operations at ubs, who joins us this morning at post nine. Art, good morning to you. You said you might expect a small reflex bounce. This is small. This would be small. Yeah, it is. Its somewhat disappointing, but what the viewers are going to have to watch now is if were going to get a retest of thursday mornings lows, which are 1926 in the s p and 1077 in the russell. If we take out the russell and take it out rather severely, we have a problem because theres nearly a year long chart formation, a rectangle that would be wiped out. That would probably call for further selling. So a retest of thursday mornings low is likely. We better study for the test. We asked jack whether or not were beginning to see signs of forced selling, forced unwinding, at east in small caps. Is that happening yet . I dont think its very large. You may see some positions getting wiped out. That could eventually begin to compound. That leaves you with the paradox of everybodys worried about the stronger dollar and earnings season, but its the small caps who dont do a lot of European Business that are getting hit the worst. Whats the risk into the fed minutes . Theres clearly a debate about raising Interest Rates. Is the bias in the markets toward a more hawkish view . No, i dont think so. I think even the strength in the dollar probably will keep the fed at bay. Theyll read the minutes to see how widespread the discussion is, to see if we get past fisher, who really was involved. But i dont think the market anticipates the fed moving early at all. To a certain extent, of course, a change in the language might be obvious given the employment report that we had on friday anyway. If they indicate that, what is your feeling about the magnitude of what is going on here . Yesterday was tough. But does it feel like were poised for a major correction, or are we just having rising volatility here in both directions . Well, i think, yes, were seeing a rise in volatile till. Yesterday it was concern that europe was on the frontline of concern again. Possibility of deflation arising. This time its not the club med gang. Its all the way up to germany. And that caused people and as i said yesterday, theres always a risk of geopolitics coming back into this game. The battle for kobani, the syrian town, seems to be engaged. If