Skip to main content

tv   The Claman Countdown  FOX Business  May 5, 2022 3:00pm-4:00pm EDT

3:00 pm
son, cupid. so we've got more fed speak, they're going to try to come to the rescue. in the meantime, you've got an hour left. this is a critical hour, more so than ever. i want to bring in liz claman because, liz, you've got a lot to handle here. liz: i mean, if we're staying with the greek gods thing, are we going to get swamped by neptune's waves? we shall see. charles: we shall. liz: i know we haven't done this before, but could i ask you to say in the chair and join the traders and investors just for a couple of minutes? we're amazing a couple of names -- charles: i was going to go sit on the ledge, but you know -- [laughter] liz: no, stay here. i'm pulling you back. okay. charles is kind enough to hang out with us for a second because a lot is going on. most importantly, the powell pop has vanished. 24 hours after the federal reserve raised interest rates by 50 basis points and nixed bigger
3:01 pm
moves, market sentiment completely reversing wednesday's big gains. could the fear gripping the street subside in this final hour or worsen? the roll tilt index -- volatility index, fear gauge, up 24%. investors swallow, try to come to grips, whatever you want to call it, with powell's proclamation that a 75 basis point increase in interest rates is not something the fed is considering even as inflation still soaring to 40-year highs. so if we look at the selloff here, it is mostly tech-led. take a look at the nasdaq. right now down 680 points for a loss of 5.25%. this is an outsized hit, obviously, compared to the other major indices. big tech, consumer names dragging the index down. let's look at the point loss here right this second, 684 points. so what do we mean by big tech and e-commerce?
3:02 pm
ebay, paypal, nvidia the most wounded. paypal down 8.75%, nvidia losing 6.7%. apple among the 30 biggest laggards on the nasdaq 100 down 6% as we kick off this final hour of trade. and by the way, that $3 trillion market valuation it hit back on january 3rd now gone by more than, let's see, half a billion? half a billion has been cut off. so we're at about $2.5 trillion right now. the 10-year treasury yield, look at this, it's popped back up above 3%, right now 3.06%. the dow falling more than 1200 points earlier, low of the session a lot of -- loss of 1243. we're down about 1194 right now. the eighth largest point drop in history. it has not closed down more than 1,000 points since june 20 of 2020. considering we're down 1 11,212 right now -- 12 -- 1,212 right
3:03 pm
now, we might see some buyers scoop in at the last second. we've got our traders on whether the fed just made an epic mistake by nixing bigger rate hikes. i mean,you look at shopify, it is cratering at the moment. consumer cession their getting absolutely -- discretionary getting crushed. the whole sector, worst performer of the day. the ceo of godaddy has his finger on the carotid artery, he's going to be here with evidence on how businesses and consumers are holding up. crypto investors, look at bitcoin right now, down nearly 9%. it's lost the 37,000 level. bitcoin billionaire brock pierce is coming into the studio in just a few minutes as crypto crumbles even more than the broader market. this may be what caused such a severe reversal, this morning the labor d. revealed that labor
3:04 pm
costs for the first quarter went parabolic, up 11.6%, far outpacing the expected 9.9%. this is serious inflation here. and yet here yesterday the fed, whose mandate is to keep inflation in check, pulled anything more aggressive than 50 basis point interest rate hikes off the table. what is propelling the selloff? that's something else. let's bring in our floor show. joining me now, scott bauer, scott remember and, of course, the aforementioned charles payne. scott, why do you believe the rip-roaring rally wednesday morphed into this selloff that we see right now? >> well, i think yesterday, liz, was all about traders and short covering when the chairman sounded not as hawkish as what the market expected. but let's face it, the target they're going to didn't change yesterday. he just sounded a little less hawkish than what the market expected. now today, of course, you mentioned it, you know, probably the trigger early was that
3:05 pm
employment, the cost number that was labor costs a lot higher than expected, and i think that just brings back the problems that we have. inflation's high, and it's sticking around. supply chain not clearing up, housing activity slowing. so, you know, the market knows there's some things to worry about out there. and today whether it's the nasdaq composite, we're testing these print meaningful technical support levels in here. liz: well, you know, let's just remind people yesterday the dow closed up more than 900 points, the s&p was up 103, the nasdaq up 401. scott bauer, here we are just as scott wren just said, everything's still in play. soaring inflation, supply chain problems, the china lockdowns. but are you ready to call a market bottom right now as a trader, scott? >> no, not yet, liz. and scott hit the nail on the head, there was a lot of short covering yesterday. you know, powell seemed very confident, but the bottom line
3:06 pm
is the market doesn't believe it. and if you look at the cme fed watch tool, they're absolutely pricing in the probability of a 75-point basis hike in june at around 75%. so the market doesn't buy it, that news we got this morning on the labor front did not help. listen, the fed does not have the tools to affect the supply side of the equation. they only have tools to really affect the demand side. supply chain issues are not getting better, and they're not going to get better in the next few months or so. then we saw what happened overnight with the bank of england, that they're, you know, raising rates as well. there's a big selloff in u.k. government bonds. that helped push our rate, you know, on the 10-year up to 3.1. so are we at a market bottom yet? no, i don't believe so, liz. but i will tell you the selloff today, hoe not unexpected, this,
3:07 pm
to me, is a little bit more of a capitulation than what we saw earlier in the week. i see more panic today. even though the vix is not approaching 40, 45, i see more panic today out there than i did earlier in the week. so i do think we are getting closer to a bottom, but we're not there yet. liz: charles, you know one guy is buying stocks right this second with both firsts, i would bet my eyeteeth it's warren buff pet. monday and tuesday -- warren buffett. he now has a more than 15% stake in occidental, he was buying chevron, activision blizzard, what do you see today? charles: let's not forget he was buying up apple, and he said the only reason he stopped is it went up. liz: liz: not today. charles: you're absolutely right, he's probably someone our viewers, long-term investors funding their 401(k), looking to make a little extra money than they have in traditional accounts on the street, you know, this is a lesson they need
3:08 pm
to be reminded. so i don't think it's about pinpointing the exact bottom. it's more of a question and certainly if there are names that you like, look at them through price to sales ratio, even more so than price to earnings because even there i look at price to forward earnings. we're looking extraordinarily cheap. oracle of omaha, he's buying oil just as we keep hearing oil can't go that high because of esg and other things. he's loading up on apple whenever it gets hit. it's the most amazing company in the world, i get it. everyone has to make a decision though, liz, and this is the tough part for our viewers, they do hold some stuff that's junk that's not going to come back, and they hold some quality names, and heir trying to hang on to all of it. they're not taking market share, they're still expensive, they may not have the profit ability, they don't know how to grow their margins, take a hit on those so that you have more money to accumulate during this bottoming process.
3:09 pm
liz: well, is part of what charles just said, scott wren, getting rid of, say for example, bond funds? some bond funds have done just abysmally, and it's not going to be a good return as we see these yields spike. so what else do you like? and when you look at what is working, it's the etfs that are shorting things. these directly owned triple shorts, the etfs that are having just a field day here, they're triple-leveraged inverse markets. the one that is bearish against the s&p, it's up 12% ultra short, the qqq, it's up 16%. there are a lot of ways to slice this one, are there there not? >> there are, liz, but these short etf ifs and things like that, those get a little dicey. these market moves are not investors pushing stocks up and down, you know? these are traders. so you need to try to figure out, you know, is my time frame 12, 24-plus months?
3:10 pm
if that's the case on bad days like this, bad weeks, you need to step in where if you have cash on the sidelines that you want to commit to stocks, you need to be legging in on these kinds of days. the people who have a liquidity event in the next 3-4 months, you have to write a big check because their daughter's getting married, hold on to the cash. or if your view is three months. unless you're trying to trade it, it's going to be a tough time. look at these gigantic hedge funds that have just gotten annihilated so far this year. trading this market is not easy, but it you're a longer-term investor, clearly there's some opportunities here. technology is a great one. i mean, we've just had a massive selloff in technology -- liz: i mean, microsoft -- >> step in. liz: right. microsoft down 5%. you've got google, alphabet down 5%. i mean, meta, if you're buying that story, down about 7%, are you, scott bauer? >> you know what? some of those names, i am. but to scott's point just now,
3:11 pm
what he said was it's not the big, you know, the big investors pushing this market down, it's the traders which is exactly why i said earlier i'm seeing more of that capitulation right now. you typically don't see that from the big, you know, the big investment out there, the big investors out there. you see that from the trader perspective, and that's exactly where i come from. that is what i am seeing right now. so longer term, am i dipping into microsoft, apple, google here especially before they're split or alphabet, going into their split? yes, i am. you don't go in all at once, but you have to. if you have a longer term horizonnen, these are the opportunities that you look for. and you're not necessarily going to be right tomorrow or the next day, you know? it's an average process. liz: hence, laddering in. you know, we've heard that term on this show from really smart people. charles, is the fed going to have to eat its words? scott bauer pointed out the fed funds futures are already pricing in, even though powell
3:12 pm
said no, a 75-basis point hike for june, at least a larger percentage of these people look at the odds of that. is powell going to have to eat his words? charles: it's a tough one. there was a great article in the journal today, and powell understands credibility. in fact, he pushed back against the notion that he lost credibility yesterday. so, you know with, i think he drew a line in the sand. it was a definitive line, he's going to, i think, try his best to live with it. unfortunately, you know, he thinks that inflation could run its course the old-fashioned way, that businesses will stop investing and people will stop shopping and that the prices will come down, you know excluding all these events that keep foiling his efforts. i'm not sure yet. i do know if he does go 75, he'll go kicking and screaming, but he'll resist as much as he can. liz: charles payne, thanks for hanging around, my friend. and the two scotts, scott bauer, scott wren. we put the nasdaq on the bug because it is, as we said,
3:13 pm
taking a much bigger percentage hit, down about 5.6% for the nasdaq, down 728 points. the low of the session, a loss of 740. question is, in the next 48 minutes will we see it test those lows or start to come you have up off the bottom? we've got red on the screen extending the chinese stocks at this hour. the securities and exchange commission, this has been a problem all day here, added more than 80 chinese akrs to its provisional firms in danger of being kicked off its exchanges. these are u.s.-listed chinese companies now provisionally or conclusively highlighted for possible delisting if they do not increase transparency and follow u.s. accounting rules. all right. so we've got down 6%, baidu, obviously, also getting hit here. long running dispute, regulators have been demanding complete access to awed different --
3:14 pm
audit u.s.-listed chinese companies. wills a little bit of hope that detaint could eventually be reached. nio is going to continue to comply with chinese and u.s. laws and regulations and strive to maintain its listing status here in the u.s. we do have nio down 16%, so that i attempt at being all sweet and, sweetness and light is not really happening. x pension down 14%dxpeng. some of us are still striving for green on the screen. bookings holdings shares have been rising, still up about 3.5%. the online travel company beat qirs quarter revenue -- first quarter revenue expectations. here's probably what's giving it the biggest lift, increased 129% over just last year. and like, say for example,
3:15 pm
airbnb, brian chess key was here yesterday, had great bookings and told the us here yesterday that the summer's going to be gangbusters. so is booking holdings. they're saying get ready for a very busy summer travel season. and that pivot toward travel and toward travel spending is just slamming e-commerce. wayfair plunge plunging to a 2-year low a after a it swung to a loss in the first quarter as the pandemic yen for online shopping wanes. active customers dropped 7% quarter over quarter, also announcing its chief financial officer is set to retire in january. that stock down 26%. etsy and ebay underscoring the swoon in e-commerce names, etsy down 18%, ebay getting clip by 12%. both came in with weaker than expected guidance. e bay did beat on earnings but lowered its full-year forecast. etsy's outlook was less than
3:16 pm
what analysts had been fore forecasting. the company with its finger on the pulse of e-commerce sites is also the world's largest domain name registrar. the ceo of godaddy up next to tell us if small business, the consumer, the investor or all three are in danger of seeing the era of pandemic-driven e-commerce returns is over. we'll see. closing bell ringing in 44 minutes. dow jones industrials down 1,304 points. that is a few session low. we're watching every tick of it. "the claman countdown" is coming back in just a moment. don't move. ♪ we gotta tell people that liberty mutual customizes car insurance so you only pay for what you need, and we gotta do it fast. [limu emu squawks] woo! new personal record, limu! only pay for what you need.
3:17 pm
♪ liberty, liberty, liberty, liberty. ♪ your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit lemons. lemons. lemons. lemons. look how nice they are. the moment you become an expedia member, you can instantly start saving on your travels. so you can go and see all those, lovely, lemony, lemons. and never wonder if you got a good deal. because you did.
3:18 pm
what's it like having xfinity internet?
3:19 pm
it's beyond gig-speed fast. so gaming with your niece, has never felt more intense. hey what does this button do? no, don't! we're talking supersonic wi-fi. three times the bandwidth and the power to connect hundreds of devices at once. that's powerful. couldn't said it better myself. you just did. unbeatable internet from xfinity. made to do anything so you can do anything. whoa.
3:20 pm
liz: shopify,-a pandemic era darling, getting rocked at this hour. shares dropping precipitously even after reporting first quarter revenue jumped to 1.2 billion. sales and profits missed expectations. it the did announce its large arest acquisition, a $2.1 billion cash and stock deliver
3:21 pm
for deliver. but with this concern deal with deliver. we've got it down 37% for the past two years, shopfy's swing from big profits to a loss, is that stock-specific, or is the whole sector in danger? shopify rival go item daddy, it too -- godaddy, it too released results after the closing bell, came out on top with revenue if coming in at $1 billion, beating expectations by about 10.8 million. unlike shopify, godaddy is not seeing a slowdown in january to march quarter with 20% year-over-year increases in gross merchandise volume at 24 billion, let's find out more here what's going on. joining me now in a fox business exclusive, godaddy's see you, iowa man bhutanny. we get it, it's not all sunshine and roses for you guys, but give
3:22 pm
us your assessment of the consumer and the small business world right now. >> liz, thanks for having me on the show. and as you know, our customer is the smallest small business. we love calling hem my microbusiness. they're -- microbusiness. what heavy seen over the last three years is a need to go online. they've brought their resilience and passion to the online world. we see, yes, some of their business is going back off line and hay love that, they want people to come into their stores, but they continue to work online. we continue to see a good trend. now, it's not accelerating the way it was over the last two years, but these folks know that they knead to wake up -- immediate to wake up every morning and so they need to make it happen. liz: i need to press you on what you're seeing in the current quarter. all you have to do is looked at etsy. etsy was saying, well, we're not seeing all that much excitement. for you guys, as the domain name king, the going gets tough the,
3:23 pm
americans turn entrepreneur right? during the pandemic so many people decided let me start my own business since i can't work, everything's shut down. are you seeing a market slowdown or a deceleration in that behavior? >> yeah. in fact, it wasn't so many people, over 2019 2.8 million people decided to open a micro business, and if you go back to the great recession, it was the same. lots of people in 2008 opened business because that's what they had to do. and, again, i want to point to the microbusinesses. these are people, lots of them have two employees, five employees. a lot of times when other companies are talking about the market, they're comparing the very large, comparing much larger businesses. but for the true microbusiness, again, to have to show up every morning and make it happen, they do see shifts. they're not immune to what's happening in the economy. they work super hard. and what we see in the macro environment is a shift from online to offline to some
3:24 pm
extent, but they are not shutting down their online, heir not shutting down their businesses because hay know that they have to go through -- they have to go through ups and downs and still be here. they have a domain name, they have a web site, they have a store, and that helps. liz: before we go, they also have to deal with supply chain issues, obviously, and inflation. we saw labor costs spiking dramatically year-over-year for the first quarter. can you just give us a sense really quickly about how you view what the fed's plan is? and that is to not be more aggressive with rate hikes to cool down demand. >> inflation impacts our customers, for sure, and it impacts our customers' customers. so when the fed raises rates, of course they worry about it. but again, liz, these are people that are going to do 50,000, 100,000, $200,000 in sales. he was personal relationships with their customers. they're looking at their can customers suffering and saying what can i do to keep my business going? how do i do more for them?
3:25 pm
and in the background, of course, we want to do whatever we can to help them, but this is a small, micro customer. yes, they're impacted, but they have to show up tomorrow and make it work. liz: thank you for giving us that perspective on an extraordinarily busy day. we've got this story also developing, elon musk may be adding a new hat to his ceo wardrobe. as the tesla ceo adds new investors to a twitter fold, we're going to show you what the billionaire's new focus -- show -- is going doing to tesla's stock. folks, these session lows are a moving target. just a second ago we hit a few one for the dow, a loss of 1,326 points. slightly off it at the moment. new session lows for the nasdaq as well. we are coming right back with just 35 minutes left to trade. we're going to blow out commercial breaks. ♪ ♪
3:26 pm
or is it a feeling? a freedom, to live our lives the way we intended. through the ups. the downs. all of it. this is financial security. from long term care planning, to annuities and life insurance, lincoln helps you plan, protect, and retire. this is lincoln financial. big game today! everybody ready? alexa, ask buick to start my enclave. starting your buick enclave. i just love our new alexa. dad, it's a buick. i love that new alexa smell. it's a buick. we need snacks for the team. alexa, take us to the nearest grocery store. getting directions. alexa will get us there in no time. it's a buick. let's be real.
3:27 pm
don't make me turn this alexa around. oh my. it's painful. the buick enclave, with available alexa built in. ask “alexa, tell me more about buick suvs.” ♪♪ i got into debt in college and, no matter how much i paid, it followed me everywhere. so i consolidated it into a low-rate personal loan from sofi. get a personal loan with no fees, low fixed rates, and borrow up to $100k. sofi. get your money right.
3:28 pm
3:29 pm
3:30 pm
liz: this just hitting the tape, breaking news, boeing shares just tested and broke through the session low, and right now we're down about call it 4.8%. boeing is moving its global a headquarters from chicago, illinois, to northern virginia. the aerospace and defense firm said it's going to maintain a significant presence at its chicago location, but the new article aington campus is going to serve as the company's global headquarters. boeing, obviously, struggling. as i said, you look at this intraday chart, you can see pretty much at session lows for the aerospace giant. take a look at the tesla shares. this is an ugly picture. down about 9.8% right now for the electric vehicle leader. possibly other murmurings that ceo elon musk might be splitting his leadership titles and attention -- albeit temporarily -- between the ev maker and twitter. according to reports, once his
3:31 pm
acquisition of twitter is complete, musk is going to serve as twitter's interim ceo until a permanent replacement is found. still just a report, we keep checking twitter to see if he tweets as to whether that's true. but today musk also revealed 19 investors are now backing his plan to take twitter private. to kelly o'grady who has the veriest when with it comes to elon's excellent add venture. pretty big money names on this new list. >> reporter: yeah. and this is a really big win for elon, at least on the twitter side. maybe not the tesla side. this 7.14 billion in equity musk is raising means he doesn't have to borrow enough. the 12.5 billion loan pegged against his tesla shares now slashed in half. you mentioned i think larry ellison is one, he's the largest, coming in with a billion dollars. he's a close personal friend of the tesla ceo and a believer in the entrepreneur. cryto exchange bye nance, it's an intriguing investment as there's a lot of talk about
3:32 pm
crypto being accepted as payments on twitter. now, a number of private equity firms are also buying into musk's vision. while e elon is claiming it's not about economics, the billionaire has convinced investors monetization will be a top priority, sources tells me musk made a compelling case for cost cutting. saudi prince bingal allude will roll his stake into the private company. he tweeted, quote, i believe you'll be an excellent lead or for twitter to propel and maximize its great potential. his initial reaction, musk's bid undervalued the company. reports that musk plans to take the company public again after a few years, in that case, they'd turn even more of a profit. elon is looking to convince other shareholders like jack dorsey to do the same. all this as reports surfacing that musk plans to serve as
3:33 pm
temporary ceo for a few months. the market may be baking into concern in tesla shares, i'm hearing concern from from within twitter as well, employees are even morage anticipated than they were at the mere thought of him taking over the company, liz. liz: kelly o'grady, thank you very much. the fed's trimming the sails of more aggressive future interest rate hikes, it's now stirring up gael force winds for -- gale force winds for stocks. all right. is the u.s. jobs picture and its smooth sailing about to face a big wave indicating the fed is off course? we're bringing in top economist diane swamp, she's here next to sort things out and tell us whether the soft landing on a beautiful beach is really in the forecast. closing bell 27 minutes away, dow jones industrials -- again, as i said, this is a constantly shifting target but going south, down 1,280 points, s&p losing
3:34 pm
4.5% or 181 points. nasdaq down 737. so when we come back, we are going to go commercial-free so we can get every tick of this very significant day in for you. ♪ ♪ meet jessica moore. jessica was born to care. she always had your back... like the time she spotted the neighbor kid, an approaching car, a puddle, and knew there was going to be a situation. ♪ ♪ ms. hogan's class? yeah, it's atlantis. nice. i don't think they had camels in atlantis. really? today she's a teammate at truist, the bank that starts with care when you start with care, (vo)ou get a different verizon business unlimited is going ultra! get more. like manny. event planning with our best plan ever. (manny) yeah, that's what i do. (vo) with 5g ultra wideband in many more cities, you get up to 10 times the speed at no extra cost.
3:35 pm
verizon is going ultra, so your business can get more. if you used shipgo this whole thing wouldn't be a thing. yeah, dad! i don't want to deal with this. oh, you brought your luggage to the airport. that's adorable. with shipgo shipping your luggage before you fly you'll never have to wait around here again. like ever. that can't be comfortable though. the smart, fast, easy way to travel.
3:36 pm
3:37 pm
[♪♪] did you know you can address one of the root causes of aging the smart, fast, easy way by targeting all the cells in your body? try tru niagen. life as we know it cannot exist without nad. as we age, nad can decrease by as much as 50%. tru niagen is proven to increase nad, to support heart and muscle health, and energy production that starts in your cells. address one of the root causes of aging with tru niagen,
3:38 pm
researched by the world's top scientific institutions. in two seconds, eric will realize (laughs) they're gonna need more space... gotta sell the house. oh... open houses. or, skip the hassles and sell directly to opendoor. wow. get your competitive offer at liz: with all of this, we've got the april jobs report hitting the tape, about what, 17 hours from now. 8:30 tomorrow morning, we get the report. expectations for a gain of 391,000 jobs, and if it comes in there, had be the record 12th consecutive month of gains around or above 400,000. unemployment, well, that rate is expected to fall one-tenth of a percent to 3.5%. that would be the lowest level we've seen since pandemic started. jerome powell said yesterday the
3:39 pm
fed believes there is a path to taming red-hot inflation without causing a recession or pushing unemployment back up. >> we need to do everything we can to restore stable prices. we'll do it as quickly and effectively as we can. we think we have a good chance to do it without, without significant increase in unemployment or, you know, a really sharp slowdown. but ultimately, we think about the medium and longer term, and everyone will be better off if we can get this job done. liz: well, some of this is in question at the moment. joining me now with a brilliant macroeconomic context is chief economist diane swann. diane with, first, what is your expectation for the jobs number tomorrow for the month of april, and if it because even better than what the world is expecting, what does that mean for the markets and for what jay powell said is his path forward? >> well, it's really critical.
3:40 pm
i think we could see more than 400,000, closer to 450,000. that would be about the same, 4 if 1,000 that we saw in march -- 431,000. that would have been an okay year mt. 2010s many one quarter. and at the same pace we saw in 2021. what's most important about the jobs situation is sort of an untold story here that is unpacked in the data that we got today, and and you nailed it when you talkedded about unit costs going up. they rose at the highest rate since 1982. embedded many that, yes, wages are accelerating, but not as fast as inflation. labor costs are going up faster than inflation because productivity has plunged at its fastest pace since 1947. the churn in the labor market, employers having to replace workers, pay up and train those workers, excuse me, those workers, that's costing us productivity. and let's face it, in the hybrid
3:41 pm
work from home environment it initially boosted productivity growth because we all allocated more time that we weren't commuting to our jobs, but it does make it easier in a very tight labor market where job demand, it's so easy out there. people are taking zoom calls and interviewing in between meetings and getting picked off. i think that's really important to understand, that churn being very costly. and it's one of the things that keeps the fed awake at night because what that means is that you can't have wage gains that improve living standards. instead you're having wage gains that are accelerating but not as fast as inflation. they're chasing inflation, chasing a moving target, eroding living standards. and at the end of the day, even chairman powell admitted although there is a path -- a very narrow path concern to get to that soft landing, he also qualified it, softish landing.
3:42 pm
liz: uh-huh, heard that. >> kind of hard, to me. and our real estate is that concern reality is that we think we're going to have to see unemployment rise above 5% before this inflation is brought back down to the levels -- liz: this is the issue, these great job opportunities for people, i mean, finally. if you think about the rest of the world not just the c suite who's all worried about, oh, i have to pay workers more, this is great for, under normal circumstances, for the economy that there are jobs plentiful and that people have choices. however, with it paired with the inflation that we see, whatever job gains they get are being sucked up by higher prices that they have to pay everywhere. when you heard that jay powell said yesterday, right during this hour, i'm taking 75 basis points that we are not actively considering any hikes bigger than 50 points, what was your first thought? i mean, can he really tamp down inflation with piecemeal 50
3:43 pm
basis point hikes here? >> i didn't see it as piecemeal. i mean, he put in 50 basis points if the next two meetings which gets them almost up to the neutral rate, and they want to go beyond it, and they're increasing the pace at which they reduce their balance sheet by double what we saw previously. and that will be fully in place by august. the reductions in the balance sheet amplify rate hikes. it's one of the reasons why we've seen such an extraordinary rise in mortgage rates relative to the 10-year treasury yield. and i think that's very important to understand is that small moves off of these low rates have outsized impact on interest expense. and that's something people lose in translation as well. it's very costly. i did a calculation just on average mortgage costs and how much they've gone up with values since december alone to april. home values hold in april at the march levels, it's still over $500 a month. that's extraordinary. liz: it is. and if we look, we can see that
3:44 pm
the home builders are getting crushed along with the rest of the market. we do have, obviously, a big selloff here. dow jones industrials down 1,212 points at this moment with 17 minutes left to trade, and the home builders, you can see on your screen, these are increasing losses here, by the way. justin about everybody's down 5-6% or more. diane, great to see you, thank you very much. diane swonk. crypto currencies taking a bigger hit than the major indices right now. if you look at bitcoin, this isn't a pretty picture, down 9%. we do have it below $37,000, in fact, we're just about $109 above 36,000. for the moment we're looking at cryptos across the board falling, but adoption is actually still rising. and when we say adoption, we mean businesses out there who are willing to take it. gucci, but with this, are strutting the crypto catwalk, the italian retailer announced today it's going to accept
3:45 pm
cryptocurrency as a form of payment in select stores in the u.s. starting with sort of a beta test here, right? the brand will accept up to ten different cryptos including bitcoin, yes, sheba i knew and dogecoin's in there too. gucci says it will convert the crypto into by yacht with currency. equinox also started announced -- announcing plans for bit pay. remember, bitcoin seasonally has historically rallied 27% this month for the past 11 years. will that still be in play, or is a 2018-style crash ahead? let's bring in brock pierce, the crypto billionaire who was one of the key figures behind el salvador's legal acceptance of wit coyne as legal tender -- bitcoin, here in new york he's making a similar push to the city. joining me now in studio, brock
3:46 pm
pierce. brock, good to see you. a big selloff here. what is telling you? >> well, there's more sellers than buyers, and we've seen this. as much as we dream of a time where where this becomes an on-correlated asset class, it tends to move with the markets. when we see a big selloff in the tradition aleck bity market, stock market, we tend to see the same thing in this space. we do expect a decoupling at some point. that has been one of the promises of this alternative asset class. but not yet realized. and i do expect that to change though. liz: so you're still a believer. does that mean you're still a buyer? because, you know, your neighbor in puerto rico, peter schiff of euro pacific, said to me, liz, the early bitcoin billionaires -- that would put you into that category -- they're not buying anymore. they're buying assets. they're buying jets, private jets and fancy homes. are you still buying? >> i am. i continue to buy, but i'm invested in all sorts of things,
3:47 pm
and peter schiff does manage my gold mining stock portfolio. i am not one of those people that operates with a singular view. i do believe that diversification is a sound strategy that has withstood the test of time. i am not a put all your eggs in one basket sort of person. i am definitely massively allocated to the cryptocurrency sector and continue9 to found, create, invest and will continue to do so. though i do hold gold and precious metals as well, and peter schiff -- my neighbor and friend -- does help me with that. liz: yeah. warren buffett and charlie munger last weekend in omaha, nebraska, they really disliked it, obviously. it was it was here on fox business several years ago they both called it rat poison. meantime, you've done extraordinarily well with it. but the question becomes, does it go to zero? there are people who think it will simply because, you know, it's -- the adoption isn't that muscular in the grand scheme of
3:48 pm
things. however, fidelity has just announced that they will add cryptocurrency as an option to 401(k) plans later this year. what would you say to people like buffett and munger? >> well, i mean, they're not known for their foresight or vision around innovation and the world changing. you know, obviously, the sage of omaha is, you know, one of the best -- the greatest value investor at scale that we're aware of. but how does that that qualify him to have an opinion about what's happening in this space? i wouldn't go to him for that type of -- it's not what he's qualify for. if you have a heart problem, you go to the cardiologies, something with your brain, you go to a neurologist. and i love spending time with people who disagree with me. i think those are where the best conversations occur, which is why i love spending time with my neighbor. it could go to zero. it's a by mare outcome -- binary outcome. it's going to be one or the other which is why you shouldn't
3:49 pm
put everything there. this reminds me a lot of 1999, right? we're many that phase, and what came out of that? ebay and amazon and all sorts of interesting businesses came out of the sort of 1.0 era, and a bunch of out went to zero, and i think that will probably be true of what we see here. it's not going to play an important role many our collective future. liz: what other cryptos are you buying other than bitcoin? that you own? >> a bunch of them. obviously, etherium and upgrading, i famously just made a nine-figure bet on eos. i converted all of my block one shares into that that. that that's public. and beyond that i'm very interested in what's happening within the nft market. i was part of the purchase and launch which happened last week many panama. their legislative branch of government just passed crypto laws last week and excited for the president to sign that into law as well. liz: brock pierce, perfect person to have on a day when
3:50 pm
bitcoin's falling about 9%. we're continuing to watch it. thank you, my friend, we appreciate it. one guy who definitely, as i said, disagrees with brock is taking up sides with warren with and charlie on the cryptoverse, that would be peter schiff. he joins me on this week's edition of everyone talks to liz podcast. you've got to hear his reaction to buffett and munger's take on crypto and the screaming warning he is getting out there about where with he believes bitcoin is going next. you can get it on apple, google, spotify, wherever you get your podcasts, everyone talks to liz. check the nasdaq, down 718 pointings. stay at home stocks, the pandemic darlings not safe from today's selloff. hardly. docusign, zoom, peloton, okta, all of them are getting hammered with peloton down 9.8%. boy, that was a triple-digit stock, it was at -- it's at 16 bucks and change.
3:51 pm
americans gear up for summer and plan to spend less time inside at home in the next few months. let's bring in global fixed income head andrew brenner because, ann crew, this morning you started putting out some serious notes. and i always read your notes, and they were hitting my inbox saying, hold on, this is a serious move in the bond market right now. what do you glean from the 10-year yield right now? >> liz, what i between from the 10-year yield right now many even though it's off its lows, 3.10 was the low, last i looked it was at 3.05, that's close enough. liz, what i glean is that people are not happy. the trend followers, the people that make markets move were not happy with what powell said yesterday. they didn't like the fact he knocked out the 75 basis points. they didn't like the fact he said that the neutral rate is between the 2-3%. in fact, liz, in just the last but minutes your old friend richard that you've interviewed
3:52 pm
numerous times very well has come out and said that the neutral rate is going to be at least 100 basis points above what powell's thinking, he's thinking 3.5. so i a lot of people feel that jay powell not only, who's been behind the curve for the last 7 or 8 months, he's put himself even more behind the curve. but i believe that powell honestly believes even though he refuses to use the word transitory, he really believes that inflation is transitory, and it's going to reverse on its own and that the fed is going to move very slowly. as diane swonk just said, 50 basis points still isn't bad, but i think the fed's going to stop somewhere around 2, 2.25, 2.5%, and the people that trade the long end of the markets both in futures as well as in treasuries did not like that. you sent your long bond today up to 3.20. and, you know, the correlation is such long rates go up, nasdaq stocks -- which are viewed as long duration assets -- go down.
3:53 pm
and look where we are on the nasdaq right now, down 5-6% which brought the s&p down and the dow along with it. so you've got a lot of problems out there, and we're hearing margin calls are happening as we speak. liz: okay, hold on. let's go back to margin calls. people borrow money to buy sock and to buy certain investments -- stock and certain investments x then on days like this they get the call for the person from whom they borrowed, okay, pay up now. so they have to sell, okay? what are you hearing about that? >> what i'm seeing, liz -- what i'm hearing is that it's going on. i'm not privy to whom it is and probably won't know that until tomorrow. but nonetheless, you can see as to how the markets are reare acting. the equity markets, that is. margin calls are happening, and people are getting stopped out of positions at the lows. now, is this the low? we were hoping to be able to qualify this as a capitulation day today, but, you know, liz, as i look at the numbers where
3:54 pm
we're probably going to close, we're no real worse than monday or maybe friday. so i wouldn't say that the capitulation trade is here yet but, boy, today was a pretty big selloff. liz: we're seeing a tiny bit of nibbling with about 6 minutes left of trade. we have the nasdaq sill down about, well, 700 points. i mean, the low of the session still about a loss of 757, so not much. there doesn't appear to be a lot of courageousness here. is powell going to have to eat his words and hike 75 basis points if we don't see any kind of moderating in inflation? >> liz, i don't think so. i wouldn't call him a stubborn man, i'd say he's very smart. liz: very. >> he's the only fed governor i can remember over my history that's actually a businessman, and he understands things. so i would tend to think that he really does believe inflation's going to come down. it's going to be behind the curve, and he might have to move a little bit here and there, but i believe he's going to keep with his 50 basis points and
3:55 pm
then reevaluate. i do believe when the balance sheet starts getting taken off which will only happen a little bit over the summer but really kick in in september, i think that's going to have a more dramatic effect. so i don't think powell's going to have to raise -- i think powell's going to raise what he said he's going to raise, which is 50, and i don't see 75 in the cards. liz: gotcha. interesting. stubborn, i don't know, maybe browbeat? i don't know, i think jay powell has been dealt some really tough cards to deal with. thank you, andy brenner. closing bell, we have 5 minutes left. a lot of things are cheaper at the minute. as we round out to the last few minutes of trade, the dow has not finished down more than a thousand points since june of 2020. right now we're down 1126, all right? and the nasdaq is on pace for its worst day since march of 2020, and the nasdaq, obviously, in bear territory, down more than to -- 20% this year with. remember, the start of the pandemic was a really tough time, and we're pretty much testing those numbers.
3:56 pm
joining us now, circle squared alternative investments ceo jeff sica. and, jeff, what are you buying, if anything, in these last couple of minutes of trading? can i i just say, can we put up amazon? earlier the low of the session for amazon was something like 2317, it's just hit a new low, 2301, at 2313 right now, down about 8%. i mean, a have been clipped dramatically. >> yeah, liz. i have to say as much as the market has fallen, i don't, i'm not finding any bargains here. the only stock. liz: really? >> honestly looks good for me right now verizon because the way i look at it, people will pay their cell phone bills and we have a dividend of above five% which is attractive to where yields could go on bonds. liz: okay. >> that's really it. at this point you mentioned
3:57 pm
amazon i have loved amazon for quite a while, but there is a lot of issues regarding their free cash flow. a lot of issues regarding the consumer. i don't think this is the time to do any bargain hunting. i think we have to let it fall a little bit more. liz: an did andy brenner who is still with us, didn't believe it was capitulation. do you, jeff? >> no, i don't believe this is capitulation. we have a market, keep in mind, liz, this market has been driven by low interest rates and high margin balances. the whole robinhood crowd discovered the drug margin. they have levered up to buy stock. they have not seen volatility like this. i see capitulation when the robinhood crowd begins to sell an raise cash because we've
3:58 pm
operated on this concept, cash is trash. have your money invested all the time and when markets are falling sometimes it's the old analogy is true, cash is king. liz: got it. i need to look at the vix if we can put that up, folks. it is climbing even higher at the moment now up 25 1/2%. andy brenner, you're still there with us. can i get your thought here. we're at 3.04% for the yield on the 10-year. what kind of distortion are we expected to see, or maybe it is just the real world or mortgages, for credit card rates, for car loans? >> liz, what you've seen in mortgages, i mean over the last year mortgages have gone from 2.8 to probably based on five 1/2 as of yesterday. i'm taking it off the top of my head. what you've done, you have made it incredibly more expensive. we did numbers last week t was
3:59 pm
the average home loan which is 300,000, you're paying between 4 and $500 a month more for that. you're going to see. i don't care what the current housing numbers are showing you. those are old numbers, those are backward looking numbers. everyone tells me involved in the home market right now the amount of sales are slowing down, the amount of looks are slowing down. people are having open houses and no one is showing up. i think a lot of stuff is happening there. i think the economy is slowing. will it get to 5% unemployment? i don't think so but you know what? it is definitely slowing. >> 20 seconds jeff sica. we're now slightly off the lows of the session. what happens tomorrow, in your opinion? >> i think the selling is going to continue through tomorrow. tomorrow, keep in mind, i think there are seven fed speakers that will start to speak starting tomorrow. so this has been a fed-driven
4:00 pm
rally yesterday. the declines are concerns over the fed. so tomorrow you're going to hear them talking about inflation and potentially raising interest rates more than 50 basis points. [closing bell] liz: jeff sica, andy brenner, thanks to you. we have the lows of the session. we're witnessing history, the ninth largest dow selloff in history. april jobs report tomorrow. ♪. larry: well low, everyone, welcome to "kudlow." i'm larry kudlow. after yesterday's stock market holiday with the dow up over 900 points, today's market plunge of about 1100 points really was a dose of reality. why do i say that? because jay powell's press conference yesterday coming after the release of the fed policy statement tried to whitewash the whole inflation picture. he backed offing a yes


info Stream Only

Uploaded by TV Archive on