Skip to main content

tv   Countdown to the Closing Bell With Liz Claman  FOX Business  February 8, 2018 3:00pm-4:00pm EST

3:00 pm
equipment. trish: even stock buybacks that should help. charlie: not as good as capital spending. trish: charlie thank you, liz claman is down at the nyse for the final hour of trading and she is commercial-free from here on out folks liz over to you. liz: yeah, we're done, done with commercials. why? this is an important decision that networks make, at least fox business, because we do not want to blink the eye because the numbers are blinking as we speak , like this. milliseconds we're looking at the dow jones industrial down 611 points and by the way we're going to be bringing in a lot of traders here to give us a sense of why things are moving so quickly. we do have to tell you that congress has decided heck, let's jump into this and the markets too they're adding to the volatility with a government shutdown now less than nine hours away the senate rushing to vote on a two-year budget deal could happen in this hour. you can see there's the senate floor. we are live from the floor of
3:01 pm
the new york stock exchange and as i said, countdown to the closing bell is not going to take any breaks and that decision is made because we are watching a mighty tumble and struggle here. folks, it's a very fast-moving one. dow and s & p 500 are on track for their worst week since january of 2016. tech and financials are pretty much the hardest hit fears of inflation and of course higher interest rates rearing their heads once again. let me start with interest rates the rising 10 year treasury yield started the whole thing last friday when we lost 666 points on the dow and by the way we're down 600 right now. intraday, today, the 10 year treasury yield briefly revisited the four year high of 2.88% that it had hit remember this early monday sort of overnight before many of you were awake. that sparked an 1100 point blood bath back on monday for the dow. to date we touched that level and we're now off slightly at 2.85%.
3:02 pm
nasdac, look at this folks at the low of the session today the nasdac was down 191 points trying desperately to hold on like the s & p 500 and the dow but as the s & p 500 and the dow lost their 2018 gain, so too with the nasdac briefly. well there it goes. let's call it flat for the moment but the trend is not the nasdac's friend right now. all three of these putting the markets close to correction territory at the close and here are the numbers to watch in case you don't remember what a correction is it's 10% off the recent highs, our recent highs at least for the dow were hit january 26. 23, 955 i believe, yes that would be for the dow. we're at 24, 341 so we're not there yet. for the s & p 500 and the nasdac we're looking at about 6755 for the nasdac, 20585 for the s & p 500 so we want to say perhaps
3:03 pm
the best way to show this sell-off is broad based is that more than half of the dow 30 stocks are all in correction territory meaning they're back 10% from the recent highs. these are well-known bell weathers that have spiked so you don't want to put too much worry or concern or angst or what do you call it? like angina in your heart? [laughter] merck, chevron, apple, home depot, walt disney just to name a few. fear back on wall street and yeah, ge's in there not so much as a bell weather any more and charlie gasparino has been telling you that for the past couple of months after trading lower for most of the day yesterday to the vix, the volatility index is back in the green that's not necessarily a good thing if you are a bull in equities right now the vix is speaking 13%. we're still at 31 though. why is that not something to get too concerned about? because we breached 50 on monday , so as we look at today
3:04 pm
and we're down 553 for the dow jones industrials at this very second low of the section we were down about 679 that equals a 690 point swing on the dow adding to what's already been such a crazy rock and roll week for stocks. looking at a chart intraday for the swings of the blue chip index. going back to friday, yes, 571 point swing but remember we closed down 666 and then you see how bad it was monday. 1596 point swing yesterday was rock and roll 508 points but what will happened to? kind of feels in a tiny way like october of 2008 at the height of the financial crisis when it comes to at least the volatility , let me bring in the traders though because i don't want to get hyperbolic without the real experts who have seen this movement scott redler is here taking a second out of your time of trading.
3:05 pm
larry at the cme, elliott warren at the nymex. scott, try to explain to our viewers why these 10 to 100 point moves are happening in the blink of an eye? >> because they haven't happened so long so it's something that traders are not used to. liz: you mean the al traders? >> yes they're program to do certain types of trades when levels break so if you remember we haven't had a 3% correction for a year or two, or a 10% correction so when you break thresholds the computers trigger certain programs so if you'll recall last week we broke the eight day moving programs, 21 day moving programs, earlier on monday, we broke the 50 day moving average, so every time that you break a level or a threshold we haven't done in a while it triggers in the market to price discovery so on tuesday if you'll remember we opened down, we hit like -- liz: down big time. i think we hit about 2595 and
3:06 pm
had a reactionary low. liz: that was for the s & p. >> so for traders that was a good opportunity if you reduce the risk they had the opportunity to buy in the hole. we were oversold, it was like minus 110 and then from there if you remember yesterday we rallied up, tested the 50 day where algos are programs to potentially sell if they didn't sell in the hole. liz: stuart varney would fire you right now scott. when you bring that up, people start wigging out with their eyes, but this is important, larry is it not to see that we have had zero volatility so it would have made sense for any trader, not just the computers, to put in sell programs if things started to move and buy programs, right? >> yeah, i think you're right. i don't want to make light of this whole thing but i think it's more people that are aggressively or not aggress every selling but on the sidelines watching, because people are just grasping for
3:07 pm
fundamental reasons why and it is true, wage inflation on friday did trip things off, breakevens rose, rates rose, et cetera et cetera, but monday was technically driven and as scott mentioned, we broke a 50 day average and the stock market dropped like 2% in a heartbeat so let's keep in mind the fundamentals are still excellent right now. we just got off the best earnings season in seven years. rates by and large are going up for the right reason and, you know, when rates go higher, that's not meaning the markets going to go down. rates are going up for the right reasons. the dow is going down that's good for us and central banks are still largely accommodated so i would just hold back and start buying but right now long term valuations are 15 types that's something we haven't seen in a long long time. liz: larry you're assuming that the markets are some intellectual creature that says oh, but yes, boeing has done wonderful and they're selling a lot of planes.
3:08 pm
the markets are gigantic voting machine are they not? and by the way, why are they voting to sell everything it seems? except maybe the u.s. dollar. elliott, oil has lost i guess it hit its 2018 lows earlier today. >> well you know what liz that's what we predicted on tuesday if you remember it was $65 and it's very interesting hearing larry being so bullish because the only thing i remember him being bullish is crude and he was absolutely right about that and i tend to agree with him here on the dow to be honest. these moves are not that violent when you consider how big the market is now. dropping 500 from 15,000 is a big move. dropping from 500 from 25,000 is not a huge move. liz: absolutely true. >> it's trading you know and no market is going to go straight up and the last thing i'll say is it's very interesting i'm on this show a lot and i always hear people talking about waiting for a pullback to get in everybody wants to buy and as soon as you get a real dip everybody panics and don't want to buy it any more. larry is right, you buy the dips >> it's a good point the problem with traders is they don't want to buy a dip too early right?
3:09 pm
we're about 10% off the highs or a little less after a massive eight or nine-year move in most of the markets so no one wants to get caught if this happens to go down, you know, 15% or more. >> but you still want to get in there, you know? >> yeah, i get it and you want price discovery just to make sure so this way you don't get caught but if you're an investor liz like a millennial or someone in their 30s this is what you want. you want to put monthly flows in better average cost and not paying up dow 27,000. let it pullback 10-15% so they aren't chasing it and they have a better average cost so if you're an investor you stay the course and if you stayed the course through 2007, 8, 9 they did just fine. liz: larry you've got the millennials daughter, your millennial daughter i know she just got married what would be advising her right now? >> she advices me. she's a very good long term investor. she's on financials and i also
3:10 pm
believe unhedged in europe, un hedged in japanese issues in the financial area, taking a bet on the dollar too. she's way better i get my information from here. >> she probably does bitcoin in the 18,000. liz: [laughter] exactly. >> and i would say we are sitting at a long term valuation average and so for months, or for years i've been complaining about that multiples are too high but what happens when multiples are too high? anything can make the market go down just like we've seen since i believe the end of january, so now we're at an average. this is the time you start averaging back in and i do believe if you're going to be in the u.s. the financial area would be a good place to be buying. liz: okay guys we have some breaking news right now on the floor of the senate and adam shapiro is right there, give us a sense of what's going on here, because they're playing into the volatility are they not? adam: well the volatility is that rand paul is holding up the
3:11 pm
vote in the senate on the budget deal on raising the spending caps and the continuesing resolution and we're pushing up against the deadline midnight tonight. there might not be a vote potentially until 1:00 a.m. friday morning, past the deadline and then it has to get to the house and there's confusion in the house as to whether democrats would supply the votes necessary to put this deal into place because fiscally conservative republicans are saying they would vote against it. so that's kind of the chaos that's happening right now on capitol hill. dick durbin, senator who is one of the negotiators on the immigration side for the democrats says look, pass the cr , we can get to immigration next week. here is what he said earlier today. >> i hope that this agreement will provide a spirited bipartisan ship that will be felt next week when we coming to and discuss the fates of hundreds of thousands of dreamer s across the united
3:12 pm
states. adam: now it's not just democrat s who are holding out formation reform because there are republicans, jeff flake in the senate intending to vote no but when it gets to the house you've got the freedom caucus liz saying they would vote against it and then you get nancy pelosi. she helped craft this deal and yet although she likes what's in it, she's going to vote no. she sent a letter to her constituents rather to her fellow members in the house saying "the republicans do not have the votes to pass the cap spill on their own house democrats have a voice here, we must be heard." so she's saying she's going to vote no but look between the weeds here. she's not holding her fellow democratic members accountable which is essentially freeing them to vote yes, so this is really coming right down to the wire but right now all attention on the senate rand paul holding up the vote. liz? liz: adam, i know that nancy pelosi has been clear that she will not vote for this in the house. what is the sense you're getting
3:13 pm
as to whether other democrats will follow, especially when they look across at the senate and see the chuck schumer the democrat from new york said this is a good deal and it is the appropriate deal for now. adam: on record they will tell you we want to be able to do a daca deal and vote on immigration. when you're not quoting them they will say we're probably going to vote yes for this cr, so this is what's happening in the house is pelosi is playing a game of luck to see if the republicans are going to blink. liz: i'm not kidding we're going commercial free here adam and it does seem as we're down 644 points right now that if it's not helping, it could be hurting we just don't into at this point but if they start any kind of vote if rand paul let us know and by the way we should let everybody know that once the senate if they do vote one this it goes back to the house. we're getting kevin brady
3:14 pm
standing by in front of our camera, he's going to be with us because we're going to talk to him about whether he's now trying to be part of what paul ryan will have to do and that is get some democrats on board in the house. i just talked to a trader and he told me he's watching these moves they're going too quickly and begun a second ago we were up 680 keep your eye on the slower ticker and the buzz we put in the right hand part of your screen folks because now we're down # 67 bouncing all over the place. we're getting vinnie viola runs virtue which is one of these algorithmic trading outfits the first to pounds on a trade electronic algorithmic companies and he's probably going to defend which is absolutely what we expect him to do and it's the free market, correct? standby for vinnie and meantime we're watching the s & p it's down 62 points we are three points away from the low of the session which would be down 65,
3:15 pm
the nasdac down 175, low of the session down 190 the russel let's not ignore the small caps here russel is getting smacked around, gold is moving up barely this should tell you again that people are either leaving and sitting on the sidelines, or they're in the bleachers right? cheap sits seats, sit and watch and don't get involved except for punching each other and throwing beer all over each other. okay, so i want to bring in some ceo's because it's important to see what ceo's are doing. they look up their business individually. are they keeping calm and carrying on in the face of these market gyrations or are some weighing what to do next as they watch their own stock tumble for no reason in some cases bringing iac, which is the global businessman it of you have heard of you probably use their brands we're talking about, angie's list, and fox business
3:16 pm
exclusive iac ceo is here with us along with the ceo of a company in which iac has a big holding and that's angie home services. and of course iac owns about 87% right off the bat what does a ceo do at a time like this and how close do you watch it and do you tune out voices like mine and the traders? >> we do tune it out. there's nothing we can do. i wish we weren't announcing earnings in a week that looks like this one but it is what it is and our performance of the business the day or the week won't change probably investaped ia one of our websites will have a good day and week on account of people being very interested in investment issues but otherwise it doesn't really change our business on a day-to-day basis. liz: well you have a very widespread broad based business. you've got all kinds of websites , everything from music videos, which if people want to tune out what's going on in the markets they're sitting watching
3:17 pm
the latest beyonce video right? what kind of traffic are you see ing on your most heavily trafficked sites? >> i don't think other than investapedia and daily beasts which are much more news-driven we haven't seen a move in our websites or traffic to our sites i think, you know i'd like to think that maybe perhaps some of our dating products this is a time where people are looking for love and maybe it will turn to that in a moment like this but i don't expect the market movement would do that. liz: chris what about you? you're in that business of home services and the sharing economy angie's list of course and that is an individually traded stock on its own, angi. do you feel like angie which i guess is outperformed the s & p right, since all of this drama again. it's down about three-quarters of a percent today but not getting hit nearly as hard as the indexes are. >> well certainly i'm happy that we're doing well. we had a good quarter, you know, i think about our homeowners and
3:18 pm
our service providers and how they're conducting their business i don't really typically worry about the market in this case and i figure this is a temporary thing and we move forward and just focus on the business and let iac worry about the bigger picture. liz: yeah, joey, he's letting you worry about everything so you get to have it as we like to say in french. just kidding, um, okay so chris? interest rates are at work with a lot of the downdraft. we saw the 10 year yield rising to about 2.88% earlier today. if interest rates rise and that makes heloc, home equity lines of credit which people use to renovate their homes a little pricey and they start to turn to your sites to do it themselves or find a best bargain isn't that in a way a real opportunity for angie's list and your other companies and home services? >> well certainly we want to be there when anyone needs help with their home, so i think it's more of a situation where if the
3:19 pm
market is such that people aren't moving and they're saying and nesting we can be there to help them. if they want to spend a little bit of money to fix up the home a little bit or they want to spend a lot we can be there to help them so our goal is to have a very vibe aunt marketplace and help anybody who needs any kind of help with their home when they need it. liz: joey, nervousness is right on our screen, the volatility index is speaking 15%, that does tend to make some people close their wallets. have you had no meetings at all about how to continue to power through the national markets how to deal with this kind of stock market move where the dow is down 667 points. >> actually year-to-date, i'd say we've seen the opposite meaning advertisers on our publishing sites are seeming pretty eager to spend advertising dollars and we're seeing that in almost
3:20 pm
unprecedented ways, like investa pedia, our publishing sites which is a collection of media sites. those are doing very well right now year-to-date and i haven't looked at the sales figures in the last day or so, but as far as we can tell, the economy seem s pretty healthy and people seem pretty interested in spending right now. at least advertisers do. liz: joey, chris, great to have you in and get a ceo perspective on a day like this, thank you so much, iac and angie's home services. folks and i know there's a lot of finger pointing right and left on whose really at fault here for these very dramatic swings in a very short time and, you know, there's this one group the traders here on the floor love to hate or love to put the finger pointing on and that is the algo, the high frequency traders the so-called flash boys we've got vinnie viola on the phone and he of course is the chairman of virtu.
3:21 pm
good to see you we're just hitting a new low at the very moment vinnie down about 674 points we may go down 700, vinnie talk to us about the role , if any, that algorithmic traders are really having on this. >> well, let's sort of look at this in the inverse if the stock market were up three, 400 points today and the dow industrial index, would you ask me if the algorithmic traders were abiding to an up market, think about the logic of your question. liz: exactly, i know because in the past when we talk about dramatic oil swings, everybody would say the speculators are at fault. yeah well when it's going down they blame the speculators but not when it's going up, is that your point? >> exactly right. well as you speak, right, oil is down almost 2%, all the algorithmic traders in the energy complex getting credit for that? i think the market structure, liz, has evolved to such a point
3:22 pm
of efficiency that one only, let's talk about the strata of investor and purpose into a marketplace. if the average investor looked at their brokerage statement on december 31, 2017, and added up all of the brokerage they paid for the notional amount of capital they deployed in the equities markets and they compared that to five years earlier, december 31, 2012, they would see that the cost to exit and enter the capital markets to invest in equities is much lower , in fact deminimis to what it once was and then at the end of the day market structure which has been electric like every other marketplace or point of inter mediation across the global economy, market structure , dow equity markets has been made enormously more
3:23 pm
efficient because of the work of automated proceeds as it applies to the trading. liz: vinnie, i'm with you. the smartest guys who evolve and help evolve the market, if you're the fastest runner you should be allowed to win, however -- >> it's not about fast or slow, liz. the market is so efficient that the point of buying and selling that the question of latency is not even, i mean -- liz: except for vinnie. five to seven milliseconds per round-trip that you guys take in a trade versus the traders here who told me yesterday they were missing out even as they put it in thinking that they had hit the low, it was already up off the floor when they put in their guy. >> well, liz, i don't want to be at all disrespect full. i know so many of the traders on
3:24 pm
the floor as you know. liz: of course. >> i started off on the trading floor and i don't want to sound at all even a tad disrespectful. they just need better technology it's available to them. we trade as a dmm. we didn't miss any of our offers it's just not fair. it's not fair for them because quite frankly whomever they are, they need to get better technology. it's as simple as that and i'm not trying to be at all -- liz: would that be charles schwab who deals with retail accounts or td ameritrade? there is this belief that the retail investors getting stampeded because you guys are that first to pounds within milliseconds. >> well no that's not the case. we're market makers, we don't initiate activity by taking a position. we're reactive we place a bid and an offer.
3:25 pm
that's a whole other academic conversation. i would say this any manager, any senior manager charles schwab we've done this with t row price at virtu, with many of the large asset managers and it was part of our process to introduce the firm and its value proposition going public. we actually did technology demonstrations and quite frankly some of those very large asset managers who were once curious about the electronic market structure are now customers and use our services and use our technology so -- liz: well the perception is that you guys are doing incredibly well and you're beating everybody. we've just been cycling through virtu's stock and in one week its done the complete opposite of what the indexes have done. the indexes have plunged and vir tu has spiked so clearly the perception is that you guys have the advantage of speed and again, i'm a free marketeer.
3:26 pm
nothing wrong with that but you may have some breathing down your back vinnie coming in with some type of regulation because you know the government always inserts its nose into certain things. >> listen, we are leaders in regulation. you know my background is as an exchange leader and regulator. we've always embraced regulation and i think we've helped in anyway we can to educate around these market structures, but quite frankly, liz, i have to say i'm disappointed in you and this interview because you know better. these markets are way more efficient, again the algorithm traders, the electronic market, does it get credit when the market rallies? is it getting credit today? does oil, it's almost 2% cheaper and that will be reflected in the gasoline price? it's a bit simplistic and quite frankly it actually adds to the uncertainty and lack of understanding as to what's going on. the market should be viewed as
3:27 pm
what it is. you had almost 300 of the 500 s & p stocks reach 52 weeks highs. liz: it's been an incredible run >> if i could finish my point. liz: and then charlie wents to get in on this, charlie gasparino is here too, vinnie. >> 160 of those 300 are in what every technician would tell you in a corrective phase, we all know when a market is trading 26,000, a 2% notional correction looks a lot more objectively than when it's trading 10,000. liz: of course. of course. >> so again, i think that the conversation about congress and regulation, remember, pure market -- liz: i'm just being realistic vinnie. you can be as disappointed as you want in me but don't be surprised because i've seen it happen before, when congress looks at something and tries to
3:28 pm
find a villain -- >> i've got to tell you this is an interesting interview. it's fine. i mean again, to be very humble and respectful to the dynamic of this conversation and also remember now, never before have they been able to access the market with as many specific market structures and instructions. liz: right. >> so investors could say hay i want to trade at this price and only this price and i don't want to trade in a flat technology environment. well virtu is theres as a market maker so again markets are markets. they seek efficiency and do you know what? i've been at this for 32 years
3:29 pm
now and i've seen an evolution and i think a principal beneficiary of the of these efficiencies quite frankly in technology has been the retail investor on main street and they will tell you that if you beat them in groups. yeah, my account statement shows a lot less in brokerage but anyway charlie how you doing you have a question for me? charlie: yeah, vinnie how are you? >> i'm well. charlie: i don't think you're the devil or anything and i know liz doesn't either. liz: i told him. charlie: she's just being provocative. >> no, i don't take it that way. charlie: and i know you're a good guy and a great american. i'm sorry you're not in our government right now. >> well, thank you, charlie. charlie: but i do have to ask you this though. i mean, we've seen some wild swings in the last couple days. >> yes. charlie: now are you actually saying that this sort of algorithm computer-driven stuff that you guys do has no role in
3:30 pm
the sort of wild swings that are going on? i'm not talking about like i don't care if some floor trader can't like match you guys on speed. that's their problem. and we should point out that the small investor really doesn't get hammered by what you do because it's a whole other discussion but what we had in the last couple days was massive fluctuations. i've never seen this. this was like millions of fat fingers all at the same time. >> charlie that's actually not true. it's really not. when you look at the notional value of the stock market when you're talking about a stock market that started this correction when you started at 26, 500 and the behavior of price and price changes and increased in realized volatility it's just not true. this is not one of the relatively most volatile trading periods. charlie: well i saw the dow. now i'm not an expert at this. >> you look at the price action
3:31 pm
on the day of the flash crash where there were market structure limitations. we have circuit breakers now, we have price limits, we have pause periods. these are phenomenally responsible oversight of the market. charlie: well no i'm not saying they haven't taken steps . i'm just saying when i look up at a screen and listen i'm a stupid reporter so just bear with me here. i don't know market structures like you do and i have ut most respect for your knowledge but when i look up at a screen and i see dow 30, and then i close my eyes for five minutes and i see the dow down 700, that's what happened almost the other day by the way. >> yeah. charlie: and then it goes as low as down 1500 and then it comes back a little bit. this is stuff that freaks investors out. they don't like it, and it has that. firms like yours because of that's the type of trading that
3:32 pm
you do, not saying you do it on purpose, they have to have some role in those wild swings. that exacerbated sort of price discovery. >> well let me distinguish if i can virtu for a second. so virtu is a primary market maker. while that market's dropping we are in the way of it. we obligate ourselves to make markets on the good side charlie so we're buying as the markets going down. we're the primary person that initiates the next price level across 7,000 stocks moment to moment across 234 different exchanges. that's a huge technology. charlie: i agree but that speed that you do it at. but there's no solution to this. i'm just saying.
3:33 pm
no, no, there is a solution. we could tighten the circuit breakers as the velocity of price changing. we could iterate on the definition of real-time, realized volatility and if the market increases the rate in which it decreases, that's what most people are concerned with, we could dynamically alter the circuit breaker, so one could say if the market drops more than 300 points in two minutes the dow industrial, the s & p 500, we want to circuit break all individual stocks that surpassed that rate from drop. we can do these things that's what technology allows. charlie: i think you'd agree with me on this the markets are selling off right now not because of etf's or because virt u does what it's doing. there's an underlying debate about the future of the tax cuts about deficits and interest
3:34 pm
rates and the markets, now they're sorting that out in ways that are making people, you know , sick because it's going so fast but let's be real clear. nobody in their right mind would blame virtu or any algos because the markets are reacting to real news but it's the way it's reacting. >> well the market, as the market accelerated to its highs at a relatively quite frankly almost historically fast pace and when markets increase velocity in a low volatility environment, now you have to remember this was happening in historically low volatility times, when they start to correct the corrections up here, much more severe. charlie: i agree. you know what charlie, we're
3:35 pm
down less than 10% from the highs. we all took the notching numbers we talked about deviations. the market will usually rest in a 200-day moving average. usually that's a deviation plus. liz: i think vinnie part of what you're trying to say though too is that people kept saying we're due for this, and it is not the worst thing in the world, so -- >> yeah. liz: yeah, see we can agree on something. vinnie thank you. i know it's a very busy day it really is for you and we really appreciate you weighing in here. >> well, i appreciate that, i actually thought i was going to come on and talk about virtu's performance last quarter and how management is just outstanding and they did a superb job but do you know what? it's good that people maybe these conversations dispelled fear and quite frankly i'm going to use a strong word about directing individuals fear and
3:36 pm
an innocent ignorance around complex environments that represent the message of price and people's investment and i understand that. liz: well we've got kevin brady standing by vinnie so i know that you'll hopefully continue to listen to this conversation we're about to have with the house ways and means committee chair. >> and i know kevin he's a great guy. he gets this. actually, believe it or not talk about healthcare, i'll try to get my wife's last uncle transferred from one hospital to another as we speak, we hang up i'm going to try to do that right now and that's what i'm doing. liz: well when the regulators and the government come sniffing you'll owe me a florida panthers game does that sound good? i love hockey. >> you've got it. liz: vinnie viola, congressman brady have you been listening to that conversation and more importantly, what the going on on the floor there, because people are expecting the senate to at least vote on some type of budget . what's going on at this
3:37 pm
point, can you give us any clarity here? >> so i sort of got in late, just as vinnie was finishing, but we are waiting for the senate to take up the bill. we've done our work. we're ready to go i believe in the house and so we don't have any intention of closing this government down. we do have every intention of rebuilding our military in a big way and so at the end of the day that's what this vote is about. liz: okay, then but it is also about a lot of spending and that's what rand paul, the senator from kansas, is at least in the last part we heard from our reporter adam shapiro was holding things up even on the senate side we're about to run out of money to run this government tonight at midnight. what is your best guess on what happens here? >> yes, i'm hopeful we can just move forward on this. look, there's no need to shut the government down. doing that would only drive up spending in my view and i always say look, i love our senate republican colleagues. if they really want to make a
3:38 pm
game change on the budget change the 60 vote rule, so they can pass their bills and we can actually direct the spending of this country. until they do that, senator schumer and other democrats have a seat at the table. that's what we're dealing with but i'll tell you this again for me national security is our number one constitutional responsibility and i'll fulfill it. liz: congressman we're down 3% on the dow and pretty much at session lows here we were down about 753 points a second ago and we're watching this go lower and lower. we were just having a discussion with vinnie viola, of virtue, the high frequency operation and i would imagine that the house and senate would say it's not our fault but perhaps there's no fault. maybe it's just something that should have been happening because we climbed so much but what role do you think canning less has and what responsibility do you and congress have to calm things down and run this country as your constituents expect you
3:39 pm
all to? >> yeah, so i think we made the point when senator schumer and deputies shut it down the other day. no one in america wins in this case so there's no need at all to do it. we're focused on the timetable to finish this tonight and we're going to stay on that timetable. i hope sooner senate can move it to us the sooner we get it done. liz: and i understand that you said earlier today or tweeted was it that this stock market fall is a "good thing." can you kind of clarify what you meant by that? >> yeah, absolutely. so the question was has tax reform causing, is it failing is is that why the stock market went down the other day and my point is no look at the reasons. we are getting jobs and wage growth, that's feeding inflation somewhat and of course, the fed may change their normalize their policy on interest rates. that's a good thing and so i think the stronger our economy becomes the more normalized our
3:40 pm
fed policy becomes, the stronger we are for the long term and tax reform there's no question has created a new sense of optimism and a lot more investment here in the u.s.. liz: is it a good thing to add $400 billion to the spending of this country and hence in about two years we could see trillion dollar deficits once again. we know that can't be good for the country or for the financials of the country. that i think is the problem that your freedom caucus republicans have in the house. they're the only ones who seem to be having any religion when it comes to holding back on spending at the moment. >> yeah, they are not and in fact i think every republican member is focused on the debt and the deficit. i think one of the key things here is how do we address it and it won't be through these day-to-day operation zs, liz as you know we have to tackle medicaid reform and save medicare and social secure the and in fact our house bill on healthcare repeal and replace
3:41 pm
had $800 billion of savings in medicaid. the senate couldn't get through the senate we'd love to have them pick that up and help us address this issue. liz: well chuck schumer is on your side this time or at least you're on each other's side. i have to quickly tell you we just touched the lows of the session for the dow we're down about 767 points. please just clarify for our viewers. when do you expect the house to vote on what the senate sends you, if the senate approves it? >> the answer is as soon as possible. today, as soon as the senate can get to us we're going to move to vote very promptly. liz: you'll work all night? >> yes ma'am until we get it done. liz: good to see you trish: thank you very much for joining us. kevin brady house ways and means committee chair. nicole you've been talking to traders. we seem to be accelerating to the downside. nicole: we were close down now 780 points so down nearly 800 points or about 2000 points down , over the gyrations that we
3:42 pm
have seen since friday, so we had to and what's interesting is a real sense of calm but some of the traders are noting the people who got hurt. there are people i love noting how great we've done since 2016 but at the same time, you have to know that some stocks are in correction mode. many, more than half of the dow jones industrial average 17 stocks plus are in correction mode, 10% off of their recent highs. we're looking at some of the dow laggards general electric that has been a real dog this year but the big picture here is that people have been getting in and it's wonderful to say how great we've been doing but we're 10% off but i will say 2000 points were down 3% today alone. liz: it looks like they're getting in we're down nearly 800 points. just a moment. nicole: that's the other thing. liz: i'm going to do something i'd normally not do but with kevin brady get charlie gasparino back in the chair we're down 813 points.
3:43 pm
charlie: i'm right here. liz: charlie we're down 800 points, ge is falling once again nicole just mentioned that and you've got all kinds of news on jeff who used to run it here. charlie: it is kind of ironic that jeff got a job amid this implosion at ge. as you know he's the long-time ceo, the stock not doing well whether he was paid attention to expenses like use of airplanes, he came under a lot of pressure for that. yesterday he got a job as chairman of athena health. now the irony is it's a healthcare company a pretty big one. they're being targeted by activist investors, paul singer 's firm is targeting them and has been brought in theoretically to deal with that and this does seem like somewhat of an odd fit for him. there's also a role from there as a door opener, you know ge has obviously a big healthcare subsidiary and he's going to help with that with expanding or working on that business, so it
3:44 pm
is an odd fit on a day liked to where ge is getting hammered, where the company is by the way what is it trading at now? $14 a share i can't believe, jack welch's head is about to explode right now, and it looks like the company has no other choice, at least when i've been talking to people, that possibly a major breakup into three different major subsidiaries and sell-off the rest. you know the market is really taking it out on ge right now. that is pretty amazing. liz: yeah. charlie: so that's where we are and it's ironic that jeff gets the job literally now to help at hena health deal with an activist. as you know, he was sort of prod ded out by an activist investor at ge, who has his board seat on ge, so that's an interesting situation but you know listen, the whole market is getting collapsed. i know what kevin brady just
3:45 pm
told you the jobs are coming flying back and everything else. maybe, but, you know, i think they will. i'm a tax guy but here is two things have you to realize. the markets don't necessarily believe this massive corporate tax cut is going to lead to greater productivity, much higher gdp and if they don't believe that you'll have a bigger deficit and much higher interest rate spikes. liz: paul ryan earlier today when challenged about how extensive the new budget coming out of the senate if it does might be and what it adds to the deficit he said growth will cover up most of that. there will be growth, again this is pie in the sky. i like to remind people we don't know. we don't have hard evidence. we certainly hope. we have started to see good evidence that there's a lot of it's not even trickle down. it's rivers coursing down where companies are sharing their tax savings. charlie: by the way liz let's be clear where we have to see it.
3:46 pm
it's nice people get thousand dollar checks and nice there's hiring going on which there is. we have to see it in productivity gain and gdp growth. if you get gdp to grow above 3- 3.5% you could start paying down the deficit. if the gdp doesn't grow now why wouldn't it grow with a massive corporate tax cut so maybe they do big time stock buybacks maybe they handout checks and they don't invest in capital spending , plant and equipment to make whatever they put, make their businesses more efficient and more productive. liz: but they stay off people. charlie: what's that? liz: they lay off people. charlie: or, who knows. i'm just saying maybe they take their corporate tax cuts and open up businesses, open up shops in china to further reduce cost. we don't know and the market doesn't necessarily believe that in what donald trump and the atlanta fed says will be like 5% growth. they don't, and it doesn't and it's having a debate right now
3:47 pm
and one other thing i'm going to point out, liz. there's a personal side of this tax bill. they really raise taxes on a lot of people. and these are people who pay a lot of taxes, because they do not lower the top rate that much and they plugged many of the loopholes, so this is a debate -- liz: and i just talked to a new yorker last night at dinner who told me he is moving to florida and it's killing him and he voted for president trump but he wasn't thrilled about what the situation is with new york. charlie, we are at new lows right now we're down about 847 and now again, down 810 to see that move just about 47 points in the blink of an eye, i mean, vinnie didn't like when i challenged him on this, but he was okay with charlie challeng ing him. is he one of those guys who doesn't like to be challenged by a gal i don't know but i'm telling you somethings playing into it let's bring back our traders scott martin and scott
3:48 pm
redler. scott martin to you first. we are heading back down to the lows of the session down about 800 points for the dow, but i'm looking at the s & p also down nearly 80 points, we've blasted through the earlier low which was down 65. >> yeah, that's not good, liz when you see these levels get violated that were hit before there seems to be some support or at least an area to watch that's when you start to see these trading mechanisms the alg os if you will and that's why we're seeing further pressure and liz this to me is the fall out from the blow up on the volatility side and started last friday and continued into monday and came back to the forefront on tuesday and when we did have that rally so to me this is the start of the unwind or still the middle of the unwind that's likely to continue for a few more trading sessions here. liz: scott redler, what happens in the next 12 minutes? >> well in the next 12 minutes it's 25.90 doesn't hold which was tuesday's low chances are we could see the algos kick in because it's another sell program and then all you have
3:49 pm
under that is the actual 200 day which is about 25.40 which was of you remember the night session on monday night they tag ged the 225.40 so if we break 25.90 which was the intraday tuesday morning low then it might be another whole segment that triggered and we hit another air pocket. liz: i want to let people know because we have a lot of people listening in their car on xm channel 113, hi guys the s & p is at 26.03 so your level we need to hold is 25.90 you said? >> 25.90 tuesday's low if that doesn't hold there might be another air pocket. liz: we got 12 points to go to the downside to see that happen dow down 834 points so scott martin we want to let our viewer s know that raj shah is the press secretary who is holding the news conference at the white house right now. we're monitoring it to see if he's asked about what's going on with the markets right now. as soon as that happens we hear that we're going to take it but right now we're hoping to stay with the markets at the moment
3:50 pm
because to see an 835 point loss , scott martin, certainly gives people pause about i thought i'd missed the pullback. i guess i didn't. is there another one to come, should i wait to buy stocks, i've been hoping to get on sale. >> yeah, i mean liz, i think there's some stuff worth taking a look at here. there's some names as you had up on the board there just getting thrown out. now because of the program trading, those are probably getting overdone. the other thing to think about too if there is a bright side here, that is the fact that there is some things working. bonds aren't getting completely smashed. yes they're down but they are providing a little volatility dampening. gold is actually up today and it hasn't been doing that in the past the dollar isn't getting smoked. i mean, there are some things out there sports fans that are doing okay that you're looking at your portfolio thinking what do i do. it's okay to hedge some of that stuff with some of those things i've mentioned as we've been doing because i agree with scott redler.
3:51 pm
he nailed it. there's other air pockets out there that are probably going to get hit because of the big volatility unwind that is still rippling out there. just because we had this bounce back or pullback in the vix, it doesn't change the fact, liz as you know that on monday, we saw four standard deviation move in the vix index. i mean that has not happened in many many many decades. it's a very outsized move. things got blown apart and they will have to get repaired. liz: todd you're at the cme. i need to hear from you what you're seeing and what you expect to see overnight because we saw overnight on monday that 10-year yield hit 2.88. that then pulled back, markets calmed down but we rerid ited that exact level earlier today. what does that tell you, what should it tell our viewers? >> it has, liz and i think there's a 3% target right now is still very much alive in the 10 year yield. we have yet to get there, we've crept up close to it but you'll pulled back like you said and the reaction in the equity
3:52 pm
market the continued selling continues to build momentum so i don't see any real bottoms. i don't want to say we're going to see support here or there because the selling continues to build momentum but once we hit 3 % things will change and this whole week has been week would be one for a new fed chair and not the easiest week for fed chair going back in history so not something we expected this kind of a move but higher volatility, new fed chair tends to go hand in hand. liz: guys oil just erased all of its gains for 2018. just now, it was hitting lows of 2018 when we started this hour. scott redler. what's happening in the oil market except the true fundamental which is theres too much u.s. output. >> two months ago oil was at 56 and went to 59 and 68 so now it's a natural pullback we'll see if oil holds 59-58 and a 10% correction in the market isn't the end of the world and your viewers should not be jumping
3:53 pm
out a window. stay with the course and know your timeframe. listen -- liz: that's a great point. >> just say the course because if you sell at the bottom you won't get back in. if you're 30, 40, 50 years old or a trader like me know your levels because if we hit another air pocket you know what you can take. liz: last week we got a warning flare early last week from andy brenner and andy was watching the 10 year yield very closely he is joining us right now along with hank smith. andy, it's playing out exactly as you warned our viewers before the 600 plus point fall on friday and then of course the thousand plus on monday. >> well thanks, liz and thanks for having me. yes the 10 year has been under tremendous pressure and even today i think the extra move you've seen down inequities is attributed to bill dudley's comment that oh, this is just small potatoes and i think that it was taken i think it was very poor context and i think that the equity market is showing
3:54 pm
them what small potatoes really is not. as far as 10 years yeah you bounce back to 283, you are going to go to 303 that's the next level. you're not going to get with the dow down 900 points and i don't sense it, it's going to give away any time soon but as soon as the equity markets stabilizes you're going to much higher rates. liz: the reason that andy just said dow down 900 points is because we just got there. hank smith tell me you're not buying something today. it's cheaper things are on sale. >> oh, absolutely. this is a classic time that you reallocate if you are under weight equities and balance portfolios, you take some of that fixed income money and you add to your equities absolutely. you take advantage of this. the important point here is the fundamental back drop of this bull market hasn't changed. gdp growth here and abroad -- liz: hold on, sorry hank. so sorry stop talking for one
3:55 pm
second. we've got to go right now to white house where blake burman is talking about the deficit with the press secretary let's listen in. >> is the president concerned about all of this spending and what exactly is your plan to pay for it? >> he is concerned about spending in washington. he's expressed that for years. let me just say off the bat we do support the two year spending bill that is being discussed and voted on in the house and senate you know it lifts the caps on defense spending which is something that the secretary of defense the president's generals have told him that they need to ensure that we rebuild our military and protect our national security. with respect to deficits, no, we're going to be releasing a budget on monday. the budget does move us toward a path of restoring fiscal responsibility. it reduces our deficit by trillions of dollars. i'm not going to get more specific you guys will get more on monday but it does incorporate these budget gaps, it
3:56 pm
so we do think that budget will outline a path towards fiscal responsibility. >> you will still be running deficits at that point and now you have this 300 billion-dollar tab to raise. is it just economic growth, is that the only way -- >> economic growth is essential to cuttings deficits and to restoring fiscal responsibility. again, the budget will outline a lot more detail. reporter: what can you tell us about the involvement of the white house -- liz: we had to listen in. part of what they're talking about, i would have to say andy, you might agree with me about this much more spending plays into the negative psychology maybe? we're down 897 points. the dow is down 3 and 2/3%. we're below 24,000 with 3 1/2 minutes to go before the closing bell rings. andy is. >> what you have, liz, you have a perfect storm of higher interest rates coming. you have a federal reserve that said they will continue to tighten.
3:57 pm
you have a budget, lack of budget discipline. you will have a tremendous amount of new issued treasurys. you are going to higher and higher yields. historically we should be, 10-year should be at nominal gdp we're not going to go there. the central bank put is dead. that is it what the fed wants you to believe. you have to go to higher interest rates. it will be messy for the markets. to hank's point, yeah the economy is doing great. we don't see it changing. you got here because of the fed. that is what it is. it is about money and flows. liz: all three major indices about to be in correction territory. down 10% from the recent highs. 2 1/2 minutes to go before the closing bell rings. we're down 895 points. charlie gasparino, a lot of people are throwing in the towel in last couple minutes.
3:58 pm
>> this is clearly, i think you laid it out in your inter view with vinnie before this is clearly exacerbated, you have leveraged etfs, whatever they were,. liz: margin calls. >> margin calls. the high frequency traders between that, but the real fundamental issue here is the deficit that, listen, we're going to have to grow our economy three to 3 1/2%. not grow the good economy at 2% gdp, we'll have to grow to 3 and a half% to repay the deficit and traders and investortores doubting that big time. congress made a bad situation worse, when the senate agreed, excuse me the senate made a bad situation worse with this deal which increased deficit $300 billion. liz: hank, we're down 941 points. best advice.
3:59 pm
10% correction for the dow jones industrials. we just hit it. there is activity on the floor. you're starting to hear the din get a little bit louder. traders shout and bang gongs. they do superstitious things at this point. take it, hank. >> liz and charlie, it might be a call to the house, you better pass spending bill. we might better not have a government shut down the market has a way of motivating politicians. take advantage of corrections, normal part of any bull market. what we experienced in 2017 was very abnormal. this is in fact is quite normal. and it should not turn into a bear market because there is no recession out in the future. liz: 3:59 and 37 seconds before that closing bell rings. down 100011 points.
4:00 pm
-- 101 is -- the russell down 41. nowhere to hide. [closing bell rings] it's a day in the markets if you're a bull. that will do it for the "claman countdown." david: 1000 point loss again. stocks getting shellacked in the final hour of trading. folks inside the beltway spending your money and affecting the economy on main street. the dow closing about 1034 points right now. it may settle even lower. this is the longest stretch of days with more than 500 point swings since the height of the financial crisis. the dow, s&p 500, now in correction territory officially, off 10% from record highs. all of the major averages ending down more than 3%. all three of those averages are now back negative for the year. hi, everybody, i'm david asman. melissa: i'm melissa francis. this is "after the bell." we have you covered on the major sellof


info Stream Only

Uploaded by TV Archive on