Power Lunch - Stocks sell off to end the week 10/10/25

Episode Date: October 10, 2025

Stocks sell off after President Trump posted to Truth Social about the possibility of heightening tariffs on China due to its Rare Earth policy. It's all here on Power Lunch.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

There is something strange going on as China's being, quote, very hostile. So says President Trump. And those words are slamming stocks. Welcome to Power Lunch, everybody. Stocks, they are selling off. We're right near session lows at this hour. It is the first drop over 1% in more than a month. And it is coming because of comments from the White House on China, on tariffs, and kind of a risk off escalation.

Folks, welcome, everybody. We have got a very big hour. a lot of real world, practical advice on stocks, on energy, and a whole lot more. But let's kick things off in Washington, D.C., with really A.man Jabbers. I think it's not unfair to say that this is the social media post heard around the world. Absolutely, Brian. So this is in response to China's move yesterday. What they did was tighten up export controls around rare earths.

That, of course, affects industries across the board, technology, defense, all sorts of industries, especially AI, you would have to think. And the president is reacting to that. Here's what he said in his social media post, as you just pointed out. He says, some very strange things are happening in China. They are becoming very hostile and sending letters to countries throughout the world that they want to impose export controls on each and every element of production having to do with rare earths and virtually anything else they can think of,

even if it's not manufactured in China. The president, in that very length these social media posts goes on to threaten to withdraw from his summit with Xi Jinping, which was expected in a couple of weeks in Korea. He says there's maybe no need to go to that anymore. He also threatens retaliation in terms of assets. The United States has monopolies on that's sort of the U.S. equivalent of rare earths that might impact China. And he also threatens massive tariff increases against China. No specifics, Brian, around any of that.

So maybe there's some wiggle room here for negotiation. but that threat to cut off the summit meeting which Xi Jinping is sort of seen as the biggest sort of velvet or fist in a velvet glove kind of in that social media post. That's the thing that the Chinese will definitely react to officials here in Washington, believe. So we'll wait to see whether they put some specifics around that. But the president signaling here, he is deeply displeased with Beijing today, Brian. Let's go to this idea of export controls.

Amen, we know that what you said, it happened here yesterday, on rare earths. And I know it's Friday. This news just came out. It's nighttime in many parts of the world, if not early Saturday morning in some parts of the world. Do we have any indication of what other or how many other nations may have kind of gotten a warning, for lack of a better term, from China about rare earths?

Yeah, we don't know how many countries, but, you know, that's what the president's referring to in this social media post is communications from China to other countries, not just the United States, saying this rare earth. export control regime is going into place. And the threshold that the Chinese government has put on those rare earths in terms of a percentage of the components that are being made is very low. And so that impacts countries around the world, industries around the world, you know, things that are core to U.S. markets.

I mean, you spend a lot of time, Brian, talking about how much of the American market and economy is being driven now by the AI industry and the AI CAPEX boom. Well, that is dependent on semis and that is dependent on rare earth. So this move by China really attacks the very growth engine of the U.S. economy. And I think that's why you're seeing this very emotional and frustrated response from the president of the United States. The idea being that any escalation with China, and we're not even talking about Taiwan yet, Amen, but any just general escalation with China on trade, on tariffs, negative for the global economy. Yeah, absolutely. Because of the way these rare earths play into everything from electric vehicles to AI and semis, you know, this is the growth sector of the economy that the Chinese are, are, have a grip on the supply chain for.

That leverage is something that the United States has, you know, maybe you could argue, belatedly realized is a problem for the U.S. and has been taking steps over the past a couple of years to try to undo. The president has been taking steps, taking ownership stakes in minors. like in order to spur along rare earth development inside the United States. But the Chinese have this leverage right now, and they're clearly willing to use it ahead of this summit. And the question now is, does the summit happen? If the summit falls apart, are we back to trade war footing with the Chinese, where I think a lot of people had thought, you know, given the sort of warm and fuzzies around TikTok that seem to be progressing? And some of the tariffs having been in the rearview mirror, over the summer, a lot of people in the market thought, you know, that phase of the trade war was

over. This indicates, well, maybe it's not. Amen, Javers, really appreciate that. Thank you very much. And by the way, alongside, Aymn, we're showing some of the stocks of the companies that are involved in or around anything having to do with either what you want to call rare earth minerals, critical earth minerals, MPs, when we could show MP materials. That's the Mountain Pass Mine. We showed some of these critical metals companies. And remember, there's MP up 12.3. percent right now. It's literally one mine, which I've been to personally twice, just on the California side of the Nevada border. This idea that the United States is going to do whatever

it takes to make sure that we have some of these minerals, these metals, call them critical, call them rare, whatever you want to make sure that we have them so that we have a little bit of independence or more independence from China on these issues. USA rarers up 11.5 percent, M. P up 12%. It is a big day for the macro markets and for your money. So let's get right now to it, kind of broadened it out, joining us on set. Steve Sosnik, chief strategist at Interactive Brokers, very good day to have you on. I don't want to make too much of it. We're down one and a half to 2%. Yes. This has been a heck of a rally and a heck of a run. So we're just kind of back to where we were about a week and a half ago. But what is the risk, Steve, of some or any escalation with China?

You know, we'd gotten off the idea that tariffs were a problem. We got off the idea that trade war was going to be a problem. And I think we'd gotten very complacent. You know, someone this morning asked me, why were we up? And I gave them the flip-it answer because they rang the bell. And I think that was kind of the mindset we'd gotten into. And I think every so often, the market needs a reminder that risks are out there. It's too early to say whether this is, you know, a title change or just a rogue wave, so to speak. But this is really the reminder that, that risks are always ever present, and sometimes the less you perceive the risk, the more they're lurking. Well, complacency, I would imagine, is in some ways the enemy of the market, is it not? Absolutely. You know, it's interesting because I've had several conversations recently with institutional investors, all of whom are getting a little bit more nervous about what's going on out there, thinking this is going on. But they're probably still buying, Steve. But they're still, well, I don't know if they're still buying, but they're still long. Or they're still holding. They're not selling. That was exactly my next point. In many cases,

they're holding their nose and owning them because professionally they can't risk not being invested in the names that are working, right? I mean, you know, if you have very narrow leadership and you're not invested in those names, you're underperforming, and that's a big problem. Nobody wants to be the first to leave the party. Exactly. And so today, that's why I think it was interesting that, you know, let's put it this way. The news about the rare earth quotas came out last night, and the market didn't react to it. It wasn't really until we had the angry reaction from the president, which, by the way, did escalate, is escalatory. I don't know if it's fully escalated, but it's escalatory language. And that's when the market reacted. It wasn't really

to the first piece of news that triggered it. And I know I'm asking you to speculate. So this is all kind of happening real time. Okay, as I said earlier, it's a rip up the scripts, rip up everything kind of a day, let's just have a conversation. Is this the reaction to higher tariffs on China? Or is this a small startup reaction to the potential for higher tariffs on China. And if we really get them, that this might just be the start. I think right now we would classify this as the start.

I think the key to me will be, do the buy the dippers show up? Because they've been the most reliable people in this market, people buying this dip. Today, we've not really had a meaningful bounce. A lot of times you get a meaningful bounce on a Friday afternoon just because options are expiring. We're not, you know, on 600 plus weekly names.

We're not seeing that as of yet. I think this is a little bit of a reminder because look at the way the VIX went from 16 to like 22 in about a microsecond today. And that's telling us that there were people caught on the wrong side of this. But that also means, and we know the VIX often called the fear gauge is really just a measure of options and options spreads. So what does that tell you at interactive brokers about how people were positioned and now are changing that position? You hit it perfectly. It's called the fear gauge, but it's really not. To me, it's a great proxy for the amount of institutional hedging demand that's out there.

And we didn't see that much demand for the hedges. Now, the underlying volatility was very low, so you could argue VIX was actually maybe a little fairly priced. But the reaction that was obvious that people were caught offside, it was obvious that people had been selling implied volatility, they'd been selling volatility, and then had to play catch-up in a hurry. So what does that do to the market then? If you're selling volatility, do you come back in later on? assuming you, assuming you, you haven't gotten your face ripped off. Bingo, yes. And you still have so much.

Yeah, then you try again. Yeah, we're only, like I said, we're back to the levels of basically earlier next week. Can we ask you to kind of hang out, Steve? You got me for as long as you want. I've got him. I love that. Say that again. Thank you.

All right, let's bring in another voice because your next go says that even as this bull market nears its third birthday, it may not be the worst idea in the world to slow down just a bit. He said that, by the way, before today. Craig Johnson is chief market technician of Piper Sandler. Steve obviously is still with us. Craig, you wrote that, I think, yesterday or the day before. This is not some new comment from you. So obviously today is making you look very smart, by the way, and correct.

You couldn't anticipate the president's social media post, but how much was this a market, or is this still a market that is really, and I hate the term, price to perfection? Well, Brian, thanks for having me on and to that point. When we look at this market, I think a lot of investors were looking for an excuse to take some profits. And, you know, one of the first things that I always do, Brian, on days like this is I walk down to our trading desk here in Minneapolis and I check in with the traders. What are they seeing? They're the smart people out there bringing the register every day. And I ran into one guy we called the Rainmaker.

And the Rainmaker is like, hey, there's not a lot of volume happening right now. and people are just sort of hanging out and watching this sort of unfold. So it sort of says to me that this is an excuse to take some money off the table more so than anything else, Brian. And I think this is going to be somewhat short-lived from our perspective. Now I'm curious about who this mysterious rainmaker is, okay? I assume that's a positive term. So what is the desk then saying? Craig, what are you saying about what we're seeing?

Like you said, maybe overreaction? It is a little bit of an overreaction. But again, in these bull markets, Brian, you always get these sharp sell-offs and they quickly come around and they're bought again. And I do think the buy-the-dip crowd will be around. And what we're seeing from a technical perspective, Brian, is really two things. One, when we look at one of our indicators that we've looked at for a long time here at Piper, measuring the number of stocks above a very simple 40-week moving average, that has been

slowly deteriorating. In fact, it has been deteriorating since the end of August. and it is now getting to levels where perhaps in the next week it could actually go into a cell signal for the first time since we came off of the lows in the April time frame. On a shorter term basis, Brian, if we go back and we look at a very simple momentum indicator, RSI on a 14 period basis, when it starts breaking through the midpoint at 50, we did that back in the February time frame and the market sort of picked up steam to the downside as a lot of the CTAs kicked in. I suspect that is something that we can see kick in next week. So this is from our perspective, sort of a flashing yellow light. It's not an end of the bowl market by any means. But could we see a pullback to the 50-day moving average at around 50, at around 50, 6530,

or perhaps even pull back all the way to 6150? But to be clear, Brian, this is why I did not raise our price target when we hit it at the end of September because we thought that the market needed to come back in, and we're getting that Now. You give it a real chance the S&P pulls back to 6150. It is a distinct possibility, especially if we do go through the midpoint of a 14 period RSI and then also go back and move through the simple 50-day moving average. It could accelerate to the downside. There's a lot of computer trading going on out there. But again, Brian, having just been traveling and seeing clients, there's a lot of large

institutions that did not participate that well off of the lows to the point. other guest was making, and hence they're hoping for some sort of shorter-term pullback, and the buy-the-dip crowd will be there. And again, this bull market is not over. We will enter the fourth year of the bull market. It is usually a fourth years are usually pretty good, up around 12 and change percent for the full year. And we are optimistic for next year. But short-term, I'll look to raise my price target on a pollback, not while it's sitting here at the highs. Steve Sosnik, we still here with us. We are entering historically the strongest part of the year

for the market, with an average, I think, S&P, 500 gain of 7.7 percent, give or take. It's kind of coming off here. If we get the buy, the dip buyers back in the market next week, what does that tell you? And if we don't get the buy the dip buyers in the market next week, what does that tell you? If we do get them back, that means the paradigm is largely unchanged. It means that we, you know, we had one of these periodic hiccups. We haven't had one since, of this magnitude, I think, since August 1st, but we do get and, you know, onward. They're not a bad thing.

No, they're not a bad thing. You need to clean out some of the over-exuberance. If we don't get the buy-the-dips, I think this could be a more lasting phenomenon, and we do start to go back. I've used a couple different paradigms to the market. I tried them out at a conference the other day. Okay. One that worked, one that a lot of people resonated with was the Spider-Man market,

because there's this giant wall of worry, and we've just been zooming right up. The other one that seemed to resonate was the Tokyo subway, and that the trades are as crowded as you think they can ever get, and then somehow we manage to shove a few people more into it. And I do think that's the one that I think is why we're pulling back, because I think these trades got very, very crowded. They needed a little bit of relief. I love that.

And if you've been on the Tokyo Subway, you know that exactly what you're talking about. Craig Johnson, I don't know if you've been on the Tokyo Subway, but you have been doing this stock market thing for a long time. Do you think we're going to get those buy-the-dip buyers, the CTAs of the world back in next week? I don't think it's necessarily next week, Brian, but I think as you get into the heavy period of earnings in about two weeks, I think those numbers will probably be pretty decent.

There hasn't been that many pre-announcements, and you will get them in. But, Brian, I think what people are going to be reaching for might be slightly different than whatever everybody else has been thinking about. It's been all about the MAG-7 stocks for a long time. But if you actually look at what has rallied off of the April lows, there's no MAG-7 stocks in there. there. In fact, they've been some of the laggards out there. So we just put out a piece, Brian,

we called it, beyond the Mag 7. And you go through and you start looking at some of these AI and quantum related names and some of the semiconductor names. And I think those are the things that some of the buy the dip crowd and institutional crowd is going to step up and buy more so than the Mag 7. Great companies, but probably aren't going to lead and help you gain alpha into year end. All right. Love it. Real World Practical advice. Craig Johnson, out in Minneapolis, tell this mysterious rainmaker. We said, hello, Greg. Thank you very much.

Steve Sosnik, really appreciate it. Thanks for hanging around. All right, folks, stock sell off is continuing. The NASDAQ is down about 2.5%. The Dow, less so down about 1.1 S&P kind of somewhere in the middle. The price of oil is below 60 bucks a barrel. It's all on a social media post for the president threatening greater tariffs on China. It's a big market day, particularly on a Friday.

and we've got full market coverage for you rolling on right after this short break. All right welcome, but welcome back. There is a ton of D.C. related news topping your feed right now. We're heading into week three of the partial government shutdown and the president making more threats about China and tariffs. As we just said, those headlines raising investor nerves. Markets are selling off because of them. So let's talk about all that. Plus the government shutdown and bring in our friend Judd Gregg.

He's former Republican Senator and governor of New Hampshire. Senator Gregg's great to have you on right now. These Trump and China comments obviously impacting the market. The president's saying China is getting very hostile right now. What do you make of it? Well, first you have to recognize who you're dealing with. You're dealing with a nation that has a billion more people than we have. And they're run by a dictatorship.

I don't think they're going to be overly threatened by the president's massive threat of tariffs. And of course, who pays the tariffs? It's a sales tax on the American people. I don't think that really bothers the China. leadership too much. They do need trade, however. The one thing that threatens a dictatorship like the Chinese is instability. And instability comes from people not having jobs in their own country. So they're going to need us to work out a deal that allows them to continue to grow economically. And you do that by sitting down with them and talking with them. You recognize

that most of what they say they probably won't stand by because they're a dictatorship. But you do it, so you do it with open eyes, but you've got to negotiate with them. And I certainly hope the president will go to South Korea and meet with Xi and see where they can go from there. But you've got to remember the president's mercurial, to say the least, and the Chinese are methodical. And that's just a fundamental cultural difference between the two countries, really. And so we have to recognize that and move forward recognizing that. But this massive threat of tariffs, it's a sales tax on the American people. and they don't care.

Well, this is fascinating because, you know, obviously, Senator, we're on, we're on CNBC. So we say, well, he tweeted this out or social media posted this out and therefore stocks are falling. So it would, the inverse would seem to apply if, to your point, we get another social media post or comments the next couple of days, you know, talk to President Xi, nice conversation, postponing any threat of higher tariffs. the markets would then recover what they're losing today. So do you think these are hollow threats? Hollow, probably not in the president's mind.

Hollow, however, not hollow. Hollow is too strong a word, but not overwhelmingly threatening in the Chinese mind. And I suspect that both sides will recognize there's not a whole lot of point in continuing on this road because both economies depend on each other so much. And we need their rare earth. They need our markets.

They need our technology. And so there are places where we can meet. Yeah, and the real risk, I think, Senator Gregg, is not tariffs, to your point, on socks or some other import from China. It's around Taiwan. I mean, ultimately, that would be the real risk, because Taiwan's semiconductor is 97, 98% of basically all semiconductors in the world.

You'd shut down global technology if there was some kind of embargo or landlock around Taiwan. Is there a risk to that, or do you think that Xi Jinping also knows he and his people have a lot to lose? Well, there is a massive risk there. I mean, it's hard to underestimate the extent. of that risk. Of course, rare earth is also a significant risk because 90% of the rare earth and more comes from China, and everything runs off of rare earth that's technology these days. But the threat to Taiwan Seney Conductor should the Chinese decide to initiate taking back Taiwan in some form, either through an embargo or physical threat, would have a huge impact internationally

and lead to some sort of worldwide economic crisis. Does she see it that way? to the Chinese leadership? Do they see it that way? They understand it. I don't think there's any question about that. But she has made it very clear. He's made it very clear ever since he assumed his office that his number one foreign policy initiative

besides expanding the hegemony of China in areas where they have natural influence, and they're doing a good job of that, unfortunately, but that's the way it is, is to get Taiwan back. That's what he wants. His legacy, basically, he has said, His legacy is to have Taiwan reintegrated into China the way that Hong Kong was reintegrated into China. So it's a problem.

It's not going away. How it's managed is going to be, it's going to take real significant, thoughtful approach. You know, I hear all this jingoism these days, especially from some former military members and some members in Congress who I think are fools, saying, oh, can go to war. You can't go to war of a country that has a billion more people. You have, you just can't do it. And their technology is competitive or will-be soon. So this has to be worked out. I, you would hope that she understands it has to be worked out.

The military solution is not, he does not try a military solution, but he may certainly try an embargo solution. It's regrettable though that Taiwan Semiconductor refuses to move its really significant technology offshore. they can move it to some other country that's not going to be integrated into China and belong there. Yeah, well, well said, great point around Taiwan, Hong Kong. I was in Hong Kong for the 2019 pro-democracy protests that was quickly crushed. And now Cantonese, the native language of that region of China, not really being taught in schools.

They really sort of grabbed it and integrated it. It was quite jarring. Senator Gregg, Governor Gregg, we really appreciate your insight. Thank you for coming on, CBC, sir. It's always a pleasure. Thank you. All right, take care. All right, meantime, Bonioles, they are down across the board on that social media post and kind of a risk-off perspective of this entire market. Let's bring in Rick Santelli to kind of make sense.

Of all this, Rick, I'm looking at a tenure at 4.05%. One day, I get it, not a trend. Is there a risk here of sub-4? You know, I think there is a risk, but I also think the catalyst for this movement, makes the risk of a test of 4% on a closing basis less technically significant. So as you see the charts I put in, the NASDAQ was what I picked, of course, because all you technicians out there, it's having what we call a key reversal day. Higher high and lower low than yesterday and certainly looks to close below yesterday's low.

And what makes it a key reversal is that the high it made today was a new intraday all-time, high before it reversed lower. Now, we've had a couple of these already, so I would caution that many would like to see two out of the three indices have key reversals before jumping on it, and the catalyst being such an exogenous issue versus something internally with the markets. Now, we're making new low yields across the entire treasury curve right now, twos through 30s, and as you look at the chart, a couple of things should jump out. First of all, we're on pace now to close at about a three-week low in tens, which underscores that is big a move as it seems on the day because we settled at 4.14 and a 10, so we're down close to 10 basis points.

We also settled a 412 last Friday, which means on the week, we're only down about 7 or 8 basis points. Now, I'm not dismissing that, but it isn't as huge as one would think, considering the news. And I think that really states at all that ultimately the markets, in my opinion or believing that this, like all the other tariff issues that were market moving, has a half-life that is pretty short. Now, the dollar index, look at the dollar. It's pretty amazing, actually. Yes, it got hit, but it's still sitting around 99. It's settled last week at like 97 and three quarters, so it's up substantially on the week. I think that's a positive sign, and it gives me a little bit more confidence that today's move as important as it is for

the reasons of tariffs just isn't going to be around very long. Well, you heard Rick, my earlier point to the guest, which is, you know, to Senator Gregg, that if, if there is some change over the weekend, we get some different social media post or commentary that everything's fine with China and they had a good phone call, does everything reverse and kind of rip the other way? Yeah, I think absolutely it does. You know, I'm not sure how much of a rip we get, because as I said, when you look at the treasury complex and the dollar index, it really isn't ripping even right now. But I think it would

reverse much of what's going on. I think for tens, the significance of today is which side of 4% we close at. And the next time we get a headline that dismisses some of the tariff intensity, how quickly it may move back above that level. Rick, Santhelli, always great to get your views, especially on a big day like today. Rick, thank you very much. All right, folks, If you're just joining us now. We've got a big Friday sell-off. You got the NASDAQ down about 2.3%. You got the SEP down about 2%. Oil is down more than 4%. We'll get more on oil and the Russia risk with energy with Helima Croft. We've got Tom Lee joining us. We've got a lot to do. It is a big market day and we are back right after this. All right, welcome back. Let's talk oil and energy. crude oil is tumbling. It's now below $59 a barrel on the Trump-China headlines. You've got 5880. on crude. It is the first time that we've seen oil back below under 60 since May. A drop in oil price is also hitting many of the oil stocks. Big names like Occidental,

Conical Phillips, Marathon, and more. They're all down four or more percent. Some others down about two to three percent. It's bringing Halima Croft, head of commodity strategy at RBC Capital Markets, CNBC contributor, actually joining us by phone from Iceland, of all places. Salima, I can't keep track of where you are. How big of a deal is China to the global oil market? I mean, trying, China is the story for the oil market. And anything that would give concerns about Chinese demand, I mean, we already have, Brian, as you know,

significant concerns about an oversupplied fourth quarter. So this China news hits oil hard, but it comes on top of the news about the deal for peace, Israel Hamas. That was already sending oil down. So we have the evaporation of geopolitical premium for the Middle East, as well as renewed demand concerns for China. And you've got OPEC and its allies adding more barrels of oil to the market.

Not a lot. This last go-round, $137,000 on the quota side. Real World will see, Halima, but that adds 2.7 million more barrels on the quota side per day to the market. So if we see OPEC adding more barrels, U.S. production is remaining fairly steady for now. China may come down, hopefully more peace, peace in the Middle East. What does that overall mean?

I mean, Brian, you've laid out a whole string of scenarios. The one thing I would say is a caveat is just because we have an Israel Hamasio does not mean Israel has taken their eye off of Iran. So I would continue to watch that story. I'm at the Iceland, Ukraine World Cup qualifying game right now, hence the music in the background. But we still have significant risk on Russia's supply because of Ukraine's attacks on Russian infrastructure. And OPEC, I think, is waiting to see where this market goes.

So if we do end up significantly oversupplied, year-end meeting, I would expect them to come back into the market, and course, on policy. Yeah, Ukraine has been striking at Russian energy and oil assets deeper and deeper with longer-range drones into Russia. Are we just a couple of major refinery explosions away from some sort of terminal change in the oil market? I mean, Brian, what we've talked about before is Russia does not have significant oil storage. So if you did have an attack that really went after their storage facilities, Russia would have to shut in production. And you brought up the drones. Ukraine is also getting new long-range missile capabilities.

That should allow them to hit further into Russian territory. So again, oil is selling off today, but we are still very focused on the Russian risk. Halima, I know it's Friday. You're at the game, by the way. Thank you very much for taking a little time to join us by phone. Go enjoy your night. Oil prices below 59 here. Halima, thank you very much. All right, so let's bring in another big macro market voice. You know him. Tom Lee, co-founder, head of research at Fund Stratt. Tom, it's only one day. We get it. We're still the bull market we heard earlier. Still intact. But your take. on today's move and what may lie ahead? Well, Brian, you know, it may be overdue to an extent.

You know, we've had a nice rise of 36% since the April lows, and I believe today's decline is the biggest in more than six months. But it's good to see the VIX spike. You know, the VIX spiked at 1.29% today. That's the 51st largest ever spike in the VIC. So we're a top 1% move in sort of what I'd say, the market seeking safety. And so I think it's a good flush that's happening today. I would like to say the market is concerned. But as your other guests have said, especially Rick, I mean, unless there

is a real structural change, this pullback is a buying opportunity. Wow, 51st biggest move for the VIX. So why is it good that the VIX is responding? What does that signal? It shows you that investors are seeking protection. And as you know, the VIX is a measure of expected volatility of the largest 100 stocks. And so a spike in the VIX is really a market saying, okay, I need to get out of everything, but I can't sell everything. So let me hedge it by buying volatility. And that is usually a sign of an interim low. I mean, I don't want to say I think markets are bottoming today.

but we know that the forward returns are pretty good one month and even one week later. So I would say if someone says, are we higher a week from today? I'm going to say the odds are actually really good. We might even be 60 points higher. Well, wow. And that's happened. That's what's been happening, as we talked about earlier in the show, Tom, that we've seen these buy the dip buyers come into the market. You know, we get a daylight today.

The dip buyers come in. We're higher a week later. do you expect that to happen again absent some further escalation with China? Yeah, I mean, anything's possible, Ryan, you know, and I think that we, we, the markets lived through this February to April and it was a day by day and day by day panic and maybe there's echoes of trauma people are thinking about. And, and we do know that this, you know, these are important issues. So I wouldn't want to be glib and saying, hey, this is nothing because the market is making a big move. But to me, if I said, okay, what are the reasons stocks have been

attractive for the past 12 months? You know, it's been about the innovation coming from AI, and it's the innovation as Wall Street looks onto the blockchain, and now it's the Fed that's beginning an easing cycle. These three things have structural tailwinds that aren't disrupted because of potential even rare earth dispute with China. Do you want to see the market not end on its lows? We're not on our lows right now. Well, you know, it's Friday. So, and it's a long weekend. So as you know, a lot of people like to shut down their computers. So I wouldn't be surprised if we might see the market close on its lows, but to me, I don't think it's a signal. As you know, markets rarely bought them on Fridays anyway, so maybe Monday is the flush, but then, you know, that's the buying

opportunity. All right, yeah, Tom Lee, we really appreciate you joining us on a Friday. Very last minute, by the way, Tom. Thankfully, you're in front of your computer. You have a great weekend, all right? Appreciate it. Thanks, you too. All right, we literally called Tom like 20 minutes before the show, so appreciate that. All right, so there are the NASDAQ 100, Biggest decliner's arm holding synopsis, microchips, Shopify on 70 down six and a half to eight and a half percent. NASDAQ 100 down about two and a half percent. Overall, one of the biggest down moves we have seen in a while. We're back with more market coverage and again more on how to protect yourself coming up. All right, welcome back. Believe it or not, quarterly earnings are about to roll out en masse. We had a few this week, but it really heats up beginning Monday.

The banks, the first major group out, but that is not all the folks. focus on your next guest, taking a look at a few under-the-radar companies set to release their reports over the next week. That is Scott Nation's President of Nations Indexes. We'll get to that in a minute. You wrote a book called The History of the World in Five Crashes. A history of the U.S. and five crashes. History of the U.S. I was close. You were very close. I don't have it on me and the book was written a while ago.

You did well. Okay. This is not a crash. Make that very clear. We're down 2.5 percent. Not a good day. We're down to the lows of like, what, two weeks ago? So I want to make that extremely clear. But your takeaway from the book was fascinating is that the things we have seen have generally come from geo-opolitical problems. That's absolutely right. And I'm not a crash guy.

And this is not a crash. No, and we're a long way away from that. I'm not a crash guy. The sky is not falling. Crashes are fortunately very rare. The five I write about more than 100 years from the first to the last. But surprisingly, each is fostered by a catalyst, and often the catalyst has nothing to do with finance, and often it is purely geopolitical. Like a social media post from the President of the United States saying that China is getting hostile, and they're going to basically cancel the meeting or potentially cancel the meeting with President Xi of China.

And a tariff battle would be purely geopolitical. And again, not a crash, but this is often how those things start. And by the way, in April, we saw the tariffs come out a lot heavier than we thought. that was, I think, if not a crash, 20% drawdown in two weeks is pretty severe. Yeah, there's actually not an objective definition of a crash, but you kind of know when you see it. That felt like it. If I'm here on a Sunday night with Jim Kramer, it's probably something going on. There's a little Potter Stewart to it.

You can't define it, but you know it when you see it. And unfortunately, they are, they're just horrible. for psyches more than anything. Well, Potter's not selling, potter's buying. All right, let's go now to a couple of stocks that may be worth the money. That's why you're here, by the way. So we appreciate your role in. American Express.

Numbers are out on Friday. They just raise the price. Their platinum card again. What are you watching from American Express? They focus on higher income Americans who are willing to pay for stuff and experiences. And so American Express is in a great niche, a wonderful company. You do have to wonder if users aren't getting some fee fatigue. So, but other than that.

Do you think we'll find out? Because I got to say $8.95 for the silver card. For the platinum card. That's a lot. That's a lot. And then also Sapphire Reserve, they raise their fees too. I still think it's a great business with the right focus. Okay.

CSX, the rails. Again, you know, we don't talk about them enough because if you're looking for a true indicator of the American economy, I don't know of a better indicator. than the railroads. Freight volumes. What are they doing? Up or down? Right. CSX is special because they just replaced the leadership. Just replace the leadership because of an activist investor. They have to match the Union Pacific Norfolk Southern deal,

which makes that railroad purely transcontinental, truly transcontinental. So CSX has to accomplish the same thing. Don't know if they're going to do it be a merger or a partner. partnership. Warren Buffett wants to do it be a partnership. But new leadership is that's going to be their focus. Bank of New York Mellon's got to be the quietest, biggest company. You don't hear anything ever. Shh, don't talk about Bank of New York Mellon, but they're gigantic. I think over a trillion or two trillion in assets. And assets and also in custody. And you're right. It's one of those companies you rarely hear about, but it's absolutely critical to financial infrastructure, again, because of custody. And so,

They report, you know, two times price to book is probably not the right metric for a company that has so many things beyond pure banking, reasonably priced at about 20 times earnings, just at the core of everything financial. A quiet giant, but I have a feeling that's what they want. Amex, CSX, Bank of New York, Mellon, history of the U.S. and five crashes. Scott Nations. Thank you. Thanks, Brian. Thank you. All right.

Folks, stocks down across the board, not crashing. But we're down 2.5% on the NASDAX. Take a look, by the way, at the Chinese intranet stocks. One of the big Chinese internet ETFs down nearly 7%. The FXI, another big China ETF. That's down about 5%. Potential Trade War with China. We'll talk more about it with Jeff Kilberg, who made a very good call on Wednesday. Stick around. All right. Welcome back. Got a pretty big market sell off right now. The Dow is down about 1.5%. The SEP down 2%. The NASDAQ Composite actually continuing to sell off, and it may end on its lows of the day. We're pretty much right about there. The NASDAQ is off 2.7%.

If you watch this program on Wednesday, and we hope you watch your listen every day. But if you watch on Wednesday, we did a segment with our next guest, Jeff Kilberg, about how to buy protection in this market if indeed we saw a drawdown. Well, we're seeing a drawdown. So let's bring back in, Jeff Kilberg, founder and CEO of KKM Financial, Jeff, great call, great real world practical advice. What would your trade if people listen to it and acted on it? What would that mean now?

Well, Sully, risk happens fast. You're absolutely right. That risk reversal that we talked about on Power Lunch on Wednesday, that put that I bought is up almost 100%. And that expiration on that put went out to December 31st. So to see the VIX move 30% in the index in one day, it is historic, despite the fact it's coming from a very low, Did you? And that's what we talked about. The whole basis of that conversation we had Wednesday about buying risk, buying risk mitigation. It's all about, you know, you don't fix your roof when it's raining out. So you fix your roof when it's sunny out. And that's exactly what I saw and I envision that we saw option premium very inexpensive. That's why that was the catalyst for this trade. I had no vision that there was going to be a tweet from the administration talking about China tariffs. But I do think that top side, the call I sold, that 700 spy call I sold, I

I think you have the ability to either buy a call just above it or close that position. Because what have we seen in every trade tariff conversation going back to April? We've seen the market prices out quickly. So I wouldn't be surprised next week if there's a kumbaya moment or at least a coming back together of these China negotiations. So that, wait a minute. So the trade that you recommended on or suggested on Wednesday, that option is up 100. It's doubled? Yes, sir.

So I would imagine that's, now I'm a financial coward, but that's a pretty good time to sell, no? Well, pigs get fat hog, get slaughtered, but if you remember the whole reason for putting on that risk reversal was to protect the downside. So I chose a strike price, the 640 spy call. That was the 5% lower from where we were on Wednesday. So we're around 2%. This is a substantial move lower. But let's remember, Sully, the S&P 500 is up 35% since that April 8th low. up nearly 50%. And we haven't had 33 days in a row. It's been 33 days in a row. We have not

had a 1% move. So I think there's an overreaction. I think profit takers are out in full force solely. We are also seeing a bit of repositioning going into the weekend. So I think you have to be considerate that we know these trade tariff conversations can change on a dime. But we're not back in April. We're having seven or eight percent swings. This is a 2% orderly sell-off. Yeah, it is. And nobody's saying it's any more than that. Like I said, we were back to the lows of like ago, but it's not nothing, and to your point, it kind of came out of nowhere with this social media post from Trump. But if our viewers do believe that there's going to be a, to your point, a kumbaya, maybe a make good over the weekend, or because the president probably doesn't

want the stock market to go down, if we get some got a happy post and markets reverse back up, is there a way to profit off that? Kind of the inverse of the trade you suggested Wednesday. Absolutely. The call that we sold, that 700 spy call that I sold, I want to buy that that 700 call, and I also want to buy the 700 call, get long that 700 call in the event we see that. But the put I own, I'm keeping that in place. This takes me all the way out to December 31st. It's kind of a free ride, Sully. I have a free ride now on the risk mitigation to 5% down. In the event, maybe these trade tariffs escalated a little bit further before they get better. Well said. And a, by the way, maybe one of the more profitable two-day trades

It was a good one, Sally. It was a good one. Listen, 100%. That's like not, that's all the percent. Jeff Kilberg, KKM Financial, Founder's CEO, great call, great advice on Wednesday. Another reason to listen to and watch CNBC. Session low for the Dow, down nearly 700 points. We're back right after this.

All right, here's your setup as we're heading into the final hour of trade with Scott and the group because it's going to be a big hour. The NASDAQ 100 down 2.7%. 684 points, one of the biggest drops we've seen in a wild big tech. A lot of the Mag 7 down 3 and 4% on that Trump social media post. It's not just equities. Look at the crypto complex writ large. Okay, you've got Bitcoin is down $3,746 to $117,2.80. That is almost exactly $10,000 off its high of just a couple of days ago. Ether also is down about 6.5%. to just over $4,000. And as crypto falls, the crypto-related stocks selling off more than the market,

Coinbase down 7.4%. And Circle Intranet Group down just about 10%. Only the consumer staples and a few uranium stocks are higher. Folks, with that, I'm going to say goodbye. We'll see you Monday. Thanks for watching. A big hour, Scott and closing bell starts now.