tv Making Money With Charles Payne FOX Business June 29, 2022 2:00pm-3:00pm EDT
neil: all right. i leave you with the dow up 132 points. we're talking to chris scalia, son of antonin scalia about the remaining four decisions due out tomorrow. one could be a market mover, what to do with migrants in mexico. we want to keep them in mexico a decision that reverses that, that could be a market moving event. we'll simply have to see. to charles payne right now. charles: thank you, neil. thank you very much. good afternoon, everyone, i'm charles payne. this is "making money." breaking now, this feels like a day of introspection for investors. they are coming to grips with the reality of the moment and struggles for tomorrow. the federal reserve see as strong economy that has to be brought to its knees. they are vowing to blunt demand on consumer stops high expectations. who can ignore the cost of gasoline and food. should they be punished for it? the folly of going hat in hand
to ask a pariah for help. inclusion of sweden and finland as russia talks about world war iii. we'll talk with. what happens when breakouts fail and support doesn't hold? it is always ugly. we'll go to chart school. this is one you don't want to miss. why president biden would do well to listen to jimmy carter. i will explain in in "my take" away. that and much more on "making money." ♪. charles: so the market continues to play "whack-a-mole" at rally attempts as each day seems to bring the same epiphany, hey, the economy is in trouble. the nuance, it isn't the economy that is moving lower but the notion that some of those, you know, some of the declines are of course organic but some is being engineered by a group of mad scientists we call them the federal reserve. it reminds me of the three wise
monkeys. guide for living. we actually heard from four fed officials leading to today, they all agreed, economy is strong, actions must be taken to quell inflation and there will be no recession. sounds like the kind of swagger that could lead to some major mistakes. the carrage is adding up. it is equal to 46% of the u.s. domestic product. only second to the carnage from the global financial crisis. that was sparked by feckless risk-taking by the smartest guys in the room and it pricked a real house of cards. damage in my mind seems excessive based on the market we're in but however many are calling for more carnage. here to discuss, market group chief strategist, phil blancato and michael antonelli. listen this is what bothers a lot of people. the fed is fighting a battle
they cannot win because supply driven inflation is 2 1/2 percentage points above its historic norm whereas demand is only 1.4%. michael, i read somewhere where you said you don't see inflation even out of control. if that is the case, how aggressive should the fed be right now? >> i'm on record saying i think the inflation is starting to peak. we haven't peaked yet but i think we're starting to peak. we're seeing things come down like commodity prices and break even rates but you know this is a great question, i get a question all the time. client asked me how does fed raising rates put gas in the system cars on lots? it doesn't. they have two mandates. they have to hike until it gets out of control. they don't understand what causes inflation very well. there is no risk. there is risk can tighten too much. they're not guarantying a soft landing. this will not end until the market gets around to terminal rate. i think we're getting close,
3.50, 3.75. i think the market starting to grips on to that. charles: i want to talk about that, phil, mester pointed to gas and food prices, it has outsized effect on inflation expectations. she said those expectations become unanchored when the fed has to be more forceful this is the part seems nonsensical to me if the outside expectations are driven by the supply side why is the fed beating down the demand side? >> they're worried about a spillover effect. one thing to have inflation focused on two areas, specifically oil and gas but when it spills over into consumer psyche, ending up they have to spend more, increase their wages to keep up, then we get 1975 to 1980, we get wage spiral increased inflation, they feed off even other. that has the fed -- charles: what about the supply side? again all of these rate hikes, all of the jawboning, when is that, why, i don't know understand how beating that up
will change our infrastructure, the structural nature of our supply side? >> in the end they want demand structure. charles: bottom luna, bottom line. slow down demand. excess demand, limited supply. they want to reverse that. charles: i had a guest on earlier this week, he said this whole thing was ridiculous. inflation expectations, that it changes second to second. there is no way to really measure it. the fed is making a big mistake. why does the fed assume inflation expectations and why is it so important to pivot off that. >> you go back to the milton friedman days, worry about how much money the system and how long it takes to circulate through. the fed sees the money supply too high and now they're draining it. cash coming out of system by tam perking down demand. they connect. the fed is trying to use the narrative the milton friedman all over again. take the money out of the system. you oversupplied which caused a
hike in wages caused a hike in demand. take that out and drain the system. charles: all the games being played and main street is being played like a yo-yo. >> less than 50,000 bucks are getting punished. charles: mike wilson, morgan stanley the drawdown could be as much as 50% from the high. i started this segment off how much destruction has been already. if we do go 50% from the high earlier this year, that would break the record from the great financial crisis. we would be talking about like 75% of gdp. is that necessary? >> it is not necessary. i would completely disagree. you don't get that kind of recession or kind of correction when you have 3.6% employment. healthy wage year-over-year. fighting inflation nowhere near the rock bottom of the economy is still shaky. consumer demand is still strong. you don't recess when that happens. charles: michael how much more downside, a, can be or b, has to be? many are saying we have to go down a certain amount, bottom line, they don't care what the
news is. we have to shake everything out, whether you believe too much enthusiasm on main street or anything else? >> i agree with phil. i thought that was really good comment. you remember loss of 50% from the peak, drop of 50% like mike is talking about, that is exceedingly rare event, happened once since 1980. here is where i think, drop of 30%, average bear market. drop of 30% from the peak that would be wiping out all of 2020 and all of 2021 f you think those periods were easy money, too much stimulus, wiping that is 3350ish on subpoena. roughly a drop of 30%. the economy was really good in 2019, even into 2020 before covid hit. if you wanted to say jobs down 30%, that makes sense where you would land this seems like too much. charles: i think the economy was actually great. so most institutional money managers look at equity risk
premium. sort of assess, if they should be buying stocks. right now it is below the 10-year bond yield or right there, using the forward p-e ratio. listen, we know the forward p-e ratio is below the five or 10-year average. does this mean, michael, in your opinion, does this mean bonds, for instance would be a better investment right now than stocks? >> it's a great question and i'm going to answer it this way. i will zag a little bit here. i want to buy stocks right now, not because i think the equity market is bottomed or primed to rip higher. it is terrible inflation. we and fed is hiking. at some point we'll make new highs, one, five, 10 i don't know. when that happens i want to look back at this moment i was buying in great americans companies. i was investing in the best economy the world and i reap those investments in the future. charles: i love that you can run for office with those kind of answers but in the meantime, phil, one thing i like you
always lay out how you're navigating these things. there is near-term anxiety people have to deal with. a lot of people have gotten into the market. i'm telling them don't look. i just looked. then they're getting anxious. then they panic. so how are you navigating right now. >> great question. mark this day on calendar, i tell everybody, soon to buy bonds. mark on september first, launch point for s&p 500 going higher. buy dividend stocks now. but your bond question, bonnes are starting to look attractive. you should think about what number on 10-year u.s. treasury, what percentage will you add bonds for the first time in years? my opinion that number is 3.75%. that is the peak of the yield on the 10-year treasury. you add bonds become a tailwind. charles: 3.57% that would mean the markets would be probably, this almost takes us back to mike wilson scenario though. wouldn't the stock market be down a lot? certainly technology and growth stokes would be devastated. >> yes, you're right. own the dividend.
own dividend get paid. inflation wanes in september. 3.57 is the peak. what happens after that the fed cuts into early next year because they want to avoid recession. it become as tailwind. wind by bonds with high yield and -- charles: dividends, bonds, transfer back to equity. >> exactly. charles: mike, real quick, i like the idea we're going to be okay, one, two, five, 10 years, i agree with you 1000 percent but someone said what should they do at this moment, what should you tell them. >> three steps, three easy steps men. purpose for the mon. why am i investing. how long will i invest for and three have a plan. it is hard, charles. if you need help, get help. those these things are paramount to your success, why am i doing this, how long am i doing this for, what plan will i execute. you do that i promise you will be a great investor. charles: all right. phil, michael, great, really appreciate it. we covered some really important stuff particularly in this environment. coming up we're going to continue down this road, folks, talking about the psychology of
failure. why failed breakouts trigger such harsh selling reactions. we'll go to chart school with ian mcmillan. nato declaring russia the most significant global effect as they invite sweden and finland to join. i'm sure the doomsday cloak moved closer to midnight. ♪. -- clock. after switching to the farmer's dog we noticed so many improvements in remi's health. his allergies were going away and he just had amazing energy. it looks like nutritious food, and it is. i'm investing in my dog's health and happiness. get started at longlivedogs.com researchers believe the first person to live to 150 has already been born. it could be you! wow. really?
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♪. charles: all right, folks, welcome to chart school. of course one of the reasons this is so important is because you can use it to understand, you know, the risk as well as opportunity and joining me to discuss adaptive market technician ian mcmillan. it to me always has been amazing when you see a breakout attempt fail, turn into a market rout. recently we've seen it couple times on the s&p 500, right? there was the time we tried to get above the april 29th low. it fell. we got hammered and it tumbled. recently when it got up to the may 19th low, and failed now we're beating a hasty retreat. what is the psychology of that, why is the failed breakout attempts often trigger massive selloffs? >> i would say it's a sign that something should work, newer
highs, momentum should lead to further and further new highs and when that fails, when you see big volume come in, you see patterns and set-ups work in the past, work in a healthy bull market, traders are quick to get out and, right, and they have been punished so many times on these failed breakouts that, it is just a domino effect and it leads to more and more selling. charles: right. >> as a lot of those, you know, there is a lot of orders sitting there waiting for those breakouts. charles: i got to tell you, so remarkable, happens over and over again. i think it is one of the reasons you don't want to jump the gun. i admit i'm guilty of getting in right before potential breakout to beat the crowd. i said i get beat. where do you see these markets headed right now? where are you focused on? >> really, charles, the same
message i've had today for the last few months that i had the pleasure talking with you. i do not believe that we have found a low. we said the same thing in fenn. said the same thing in march and april. we still continue to see areas that need to work, not working. transports, semiconductors, financials. i think nvidia, amd had another, they're hitting new lows today, semiconductors new relative lows. there are, there is just, there is no game anymore, especially now that they have taken energy out of, out of service. no pun intended. charles: yeah, to that point, you know i hear on one hand where some of this happens, it is because, okay, portfolios, we've had a rolling correction. you can go back all the way to the first quarter of last year, toward the end of there, first time bond yields started to spike. almost every sector. first it was stealth. you couldn't see it because tech stocks are doing well.
all of sudden tech stocks started getting hit. apparently the notion is that people are selling the winners because they have no choice. you have margin calls. you have got fear. but does that, is that where the opportunities start to create? if that is the case would you go back to looking, for instance, you mentioned semiconductors. would you look for semis to find some sort of a support or rebound to lead the way back? or specific names, for instance i know you talked about apple and microsoft in the past? >> yeah. apple, microsoft, those are the two big ones. we've got to see apple above 156. we've got to see microsoft above 276, or i do not see a way that this market really turns around. you have add energy and you can have materials and things like that. they just are not big enough to carry, they don't carry enough weight. energy had what, 40, 50% rally this year. look what it did for the s&p? nothing. charles: it was 1980 or something like that we would have been talking new highs,
maybe. ian, thank you so much. that is important to understand, everyone goes through that. you see something on the verge of breaking out. it doesn't, all of sudden all hell breaks loose. talk to you soon, appreciate it. >> take care. charles: nato facing biggest global threat since world war ii. could it increase the chance of world war iii? reaction from rebeccah heinrichs after the break. americans are sitting on trillions of dollars of cash. my question, what americans are they talking about? nothing in this market is suggesting that consumers are waiting in the wings to save the day. we'll be right back. ♪ you see, son, with a little elbow grease, you can do just about anything. thanks, dad. that's right, robert. and it's never too early to learn
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folks. formally extending invitation to finland and sweden to join. joining me senior fellow at the hudson institute, rebecca heinrichs. rebeck cashing former president medvedev, said any encroachment on crimea by nato member would amount to a declaration of war against russia and it would start world war iii. strengthening its borders being be reedy for retaliatory steps, that would include by the way install being hypersonic missiles. the thought where you're heading? >> russia continues to issuing threats for anything the united states and allies want to do. certainly finland, sweden, recognize it is not nato, it is not a problem for these countries when you're a member of nato. the problem when you're not a member of nato russia fixes its sights on you. that is why nato is being attacked and article v members
of alliance. finland understands it is safer to be part of alliance than not. russia will continue to issue threats what the alliance does to stop the russian invasion or slow it or help ukraine. russia does not want to go to war with nato. so the biden administration has been self-deterred because they're so fearful of doing something that could be escalatory to cause russians to expand the war. we remember the russians don't want to go with war with nato as badly as we don't want to go to war with russia. >> let me turn to that the war in ukraine. it feels bleak now. even though the united states pumped in 50 billion in various kinds of funds, europe pumped certain amount of money and arms, the administration still reluctant to give weapons that might actually achieve victory. how much longer could this invasion last, and are we at the point it is inevitable that
russia will win some sort of concession on this. >> two big things to remember, the administration cast not just throw money at the problem and just say they're doing everything they can to help ukraine. the american people deserve to know where the $50 billion is going towards. only half of it is to the military effort itself. the rest of it is to economic rebuild which i believe is premature. ukraine needs victory, needs to push russia out. then the united states should work with allies, germany, primarily the western, very wealthy nations to work on economic rebuild once there is a sovereign ukrainian nation to rebuild. so a lot of that money isn't even going to help ukraine until, charles, you're exactly right are the kinds of things to send to ukraine are systems to hello them go on a counter offensive. otherwise the united states is delaying inevitable. ukraine will eventually slow down and lose. they're slowing down the loss but they're not helping ukraine win. charles: yeah. >> another thing to keep in mind, the russians are shelling
ukrainians 10 times more than ukraine even has shells available to fight back. so it is discuss simply not true that the united states and nato is doing everything they can to help ukraine. charles: what do you make also, then, we've got the nato news, what is going unnoticed in the mainstream media what is happening with so-called "bric" nations which were hot 10 years ago. we forgot about them. they're getting larger. more countries say they want to be part of that. meanwhile the ruble is higher. some are saying it is the hottest currency in the world. russia has more cashing than ever before. you get another 100 million or more people to join this "bric," brazil, russia, india, china, south africa, does that become some sort of a threat to the west and to nato and these other, these other alliances? >> well, i think we have to keep an eye on it, charles. we are in the middle of a very, very dynamic global environment. people are watching to see where is the united states going to
go? are we a safe bet? president biden is not acting like he is leading a superpower. he is acting like we are a middle power, that we can back bench. see what the germans are willing to do with nato, see what the french are willing to do, defer to macron, defer to what every other countries want to do, act like the superpower we are. the longer ukrainian war lasts, more protracted, the most dangerous it is. lithuania, they're enforcing lawfully and justify whether i eu sanctions. resulting in the ire of russia. what if russia make as foolish decision attacks lithuania? they have launched a cyberattack. what if lithuania responds cueing article v? those closer to the russian threat, if they cannot trust the united states to lead a strong nato alliance they will act out on their own in their own defense. i don't blame them one bit.
that is where we are, charles. we need to have strong u.s. leadership or things can go south really fast. charles: felt like we saw that at the g7 meeting. felt like from time to time, macron was in charge, boris johnson was in charge. didn't feel like the united states was the one that galvanized the whole group. rebecca, appreciate your insights. >> thank you, charles. charles: want to talk about the economics of this. emma, first of all these whirlwind developments happening in europe, what kind of impact could they have near term or longer term on financial markets? >> i mean the impacts will be long and structural, especially when it comes to energy and agriculture. so there has been estimates that amount of oil taken out of the global markets from russia alone is about three million barrels a day. that, that can't be made up by opec even if it wanted to or the
other non, 79 non-opec countries. charles: right. >> so people will look to china, oh, the economy is weakening, oil demand will come down, right? energy prices will take a little pullback, but that actually misses the point. you have to see, you would have to see a really severe recession, maybe deep depression when you have supply dynamics this tight to actually see oil prices -- charles: let me ask you about this. there was this awkward scene where president biden was talking to a reporter about going to the middle east and trying to get production up, right? middle-eastern oil and macron comes in out of nowhere sets the record straight, u.a.e., emirates there is no more capacity there, and there is barely any in saudi arabia. does that mean first of all this sort of a trip is folly? no need to make it certain if i if you have give an audience to mbs. maybe at some point consider being more pro-oil in america?
i mean because it sounds to me you think oil prices will be elevated for a long time? >> oh, yeah. they're going to be elevated for a long time and it will be very repressive for the lowest earning part of our population. it absolutely means we should be more pro energy in america. i'm not saying anything against green initiatives but we have to have the oil capacity to produce electric vehicles, so one tesla takes like 60 barrels of oil to make the plastics in a tesla car. if you don't have the oil to get -- we don't have enough hydrocarbons to get to the green energy transition to begin with. charles: that is the irony, right? the irony is to get to the green utopia we need to power it by oil. you just mentioned this, well you kind of alluded to it, the movement itself. i want to ask you kick about esg.
it wields amazing power particularly over in europe. particularly in this country. some say is play as major role in oil. you can't do any major developments because you can't get money out of wall street. meantime if you invested in esg itself it is something of a dud as an investment. where do we go from here? what is the role of esg? will it be this dominant from here on out? >> you know, that is a good question, investing in esg as a dud, i can explain pretty simply. a lot of funds used it as a tactic, just as a marketing ploy, so, it is not necessarily going to be investing things that give you the most immediate returns. depends what you prioritize. what is the second part of question? charles: you kind of hit it on it right there, in terms of, you know the power that it wields, because i read somewhere today that some surveys showed retail investors are showing more
interest. they have googled esg more often. i think it is all marketing to your point. there is no real set rules to this but we do know the consequences. one of them has been we haven't been able to drill in this country. and now the average american is paying a heavy price for it. emma, we've run out of time. always appreciate your expertise. thank you very much. >> thanks for having me. charles: up next, this recession debate, folks, it has roiled the markets so where do we go from here? what is the so-called fear index telling us? you always hear about the vix. we'll talk about how you need to understand it a little bit more. there is all the uncertainty around the markets, the economy, that is why i'm hosting another town hall, inflation in america. this is the hangover edition, folks. tuesday, july 26th. we went crazy, nuts, pumped more money that you can believe. it was fun. now we're suffering from the biggest hangover ever. we'll talk about the investing how you make it retirement and
day-to-day. email your questions to firstname.lastname@example.org. we'll be right back. (fisher investments) in this market, you'll find fisher investments is different than other money managers. (other money manager) different how? aren't we all just looking for the hottest stocks? (fisher investments) nope. we use diversified strategies to position our client's portfolios for their long-term goals. (other money manager) but you still sell investments that generate high commissions for you, right? (fisher investments) no, we don't sell commission products. we're a fiduciary, obligated to act in our client's best interest. (other money manager) so when do you make more money, only when your clients make more money? (fisher investments) yep. we do better when our clients do better. at fisher investments, we're clearly different.
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minions are bitin' today. (sung) liberty. liberty. liberty. liberty. minions: the rise of gru, in theaters july 1st. ♪. charles: all right, so right now everybody's waiting for the fed pivot, right? then everyone will pile into the market but my next guest says it might take a little bit more than that joining me data track research cofounder, nicholas colas. you had a tweet today, let's be careful with the idea that a change in fed monetary policy alone can mark a turning point for the direction of stocks. that was not the case in 2001 because of rising uncertainty related to corporate earnings as recession took hold. such is the case again. can you tell us more? >> sure, absolutely. we had a huge bear market from 2000 to 2002. people forget the fed was on the side of stocks in early 2001.
they did a emergency rate cut by 350 basis points all the way through 2001, it didn't help stocks at all. the 2001 and 2003 is the s&p bear market. it didn't work that way before. charles: are we as frothy now as we were then? that was the infamous pets.com era. feels like a lot of names, i feel we have more nonmoney making companies but feels like overall quality is better right now, even for the names that are not producing a bottom line right now? >> certainly the quality of the s&p is much better than it was back in 2000, 2003, however those companies have all gotten huge. where is the growth coming from in 2002 we could have a lot of technology growth. can we say the same degree now? probably not. charles: bear market is
different, bear market versus bear market during recession. you told me we're in recession or heading there, and adjustments have to be made. >> yeah. charles: go through the math for us, with the audience what the math will be and what it looks like where it takes the s&p. >> super important. s&p, q2 is earning $55 a share. now analysts have 60 bucks a share in q2 and q4, how do question get to 60 bucks a share if the economy is flat or declining? we're not. most logical set of numbers, 20% reduction in earnings power. that is typical recession. that is benign recession. i'm not looking for a huge crack. benign recession takes us earnings of 220 for the year down to 175. put 18 multiple on that. totally fair long-term average of multiple for the s&p. gets you to 3150. that is the basic math what actual recessions due to stocks prices. >> that would be the year-end target,. >> yeah. charles: some are looking ahead already to 23.
some are already modeling rate cuts in the third quarter. is that premature. >> probably not too premature. let's stay focused what matters to stocks, it is earnings. corporate earnings move stock prices. corporate earnings have to recover. that is the big open question. charles: bill ackman had a tweet, i saw your tweet, i thought about his tweet as well. he says business is a confidence game. consumer confidence is weak because of inflation, not because the economy or jobs are plentiful. the economy is strong. the fed needs to act decisively to kill inflation and inflation expectations. on one hand though, looks like the fed is between a rock and a hard place. if they act really too hard it will pun maybe street. some will say it is unfair. hear bernie sanders saying a lot of politicians, what the heck why are you making main street poorer because wall street got in over their heads. where does the fed start to gain confidence of main street and wall street? is there some sort of sweet spot they can do both? >> that is what they call a soft
landing. chair powell called a soft landing just enough of a decline to get inflation under control but not raise unemployment. he admitted more recently it is a very, very hard path to find. maybe he can, maybe he can't. odds are he can't. charles: you err on the sudden crushing main street a little bit? >> you have to, you have to. ultimately this country has $30 trillion of debt. you cannot have structural rates at 5, 6, or 7%. you will do very bad things for the budget. powell has no choice. this isn't about the economy. about all the debt the country accrued over the last 20 years. charles: he seemed to be, someone asked him when he was on the hill, he seemed pretty upset about the notion that the fed though would have to set policy based on the recklessness of washington d.c. someone brought up the notion of a trillion dollars for instance in interest rate payments. he seemed to push back on that? >> yes. because it's a political third rail. you cannot talk that way in d.c. because both parties have added to the deficit over the last 20
years. it isn't just one or the other. charles: sure. >> as a result it is something neither party wants to take ownership of because both fault. charles: and the fed doesn't. >> and the fed doesn't. charles: nick, great stuff. appreciate it. coming up my takeaway on jimmy carter with the crisis of confidence speech. you know what, i think he got a few things right, believe it or not. nancy pelosi calling for end to filibuster. we'll bring on beverly hallberg because d.c. may be focused on the wrong things these days. ♪
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ok. wow. i'm right here. and you can do better, too. at least with your big name wireless carrier. with xfinity mobile, you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill, over t-mobile, at&t and verizon. wow. i can do better. yes, you can. i can do better, too. break free from the big three and switch to xfinity mobile. charles: house speaker pelosi now calling to eliminate the filibuster as a vote to codify roe v. wade. this of course after friday's supreme court ruling. joining me to discuss, district media group president beverly hallberg. beverly, i just, in some ways i guess we saw this coming but it feels like if either party starts to say we're going to change the rules when things don't go the way we want, then we won't have the sort of
foundation that we built this great country on in the first place? >> i think it is interesting that the party often, often talks about our democracy dying and democracy being in peril is the same one trying to change the rules the foundation were based on. the filibuster is very important. i don't think this is going anywhere. actually rather odd, nancy pelosi doesn't speak on senate. say things i focus on the house. we'll let the senate deal with the senate. this may point to how scared democrats are. they're using nancy pelosi, a female to talk about the abortion issue because they have nothing else to run on in midterms. that purely a way to run in november but not necessarily something that is going to happen. charles: i want to ask you, nancy pelosi, the female, grandmother, or the pelosi push, or nudge, the video of her nudging daughter of gop democratic republic of congo woman may i -- mayra flores,
people are shocked. get away from me kid. >> how many times have you seen the video in slow motion. the child, she handled this brilliantly, kept her pose, kept the game face on, i give her a lot of credit. here is what is ironic, nancy pelosi came out and said this was her trying to help the child get into the frame, actually trying to do that, charles, you know, you don't push the child out of the way of the frame. this is just frustration on nancy pelosi's part. she had to be there for the congresswoman taking over. this is a district that was blue, that went red. i think it was mary frustration and a poor look all the way around. charles: between that 18-dollar ice cream. i don't know she is a woman of the people. a big theme today in the show, also for really in a long time, has been trust in these large entutions. we saw news yesterday that ernst & young is being fined $100 million. they discovered that employees cheated on their cpa exams.
you know, golly, it just, where do we go? you know, airlines are canceling flights and they're blaming everybody else. just feels like everyone is letting us down. >> well, think about it, during the pandemic we lost the faith and trust in the cdc and the fda. we lost trust during many mainstream media outlets in the trump years. now airlines. an accounting firm is supposed to hold up ethics to determine if other people are cheating and they are cheating themselves. people are right to loo faith in the institutions. we can regroup to a place where we can rebuild again. it remains to be seen if we can do that. charles: you and i have not done winners and losers in a long time f we do it today, it would be boris johnson u.s. is still world leader and any other is a grossly exaggerated. what do you think? >> i completely agree.
popular model democracy is dying an in peril. a couple states try to shore up elections and easy to vote harder to cheap. both republicans and democrats are concerned about the election process. i think we're on the right track what states are doing. charles: i do too. i wish we heard more from over there earlier this week. beverly, been too long. appreciate it. >> thanks so much. >> there is always market impacts with all of this stuff. i want to talk to gary kaltbaum about that. so, gary, first quarter gdp numbers were revised today, on the surface doesn't look like big revision, right? down 1.5, to down 1.6. here's the thing, consumption was down a lot. initially we thought it was over 3%. now it is 1.8%. and the investment part of it was bigger as well. now the way i read it, is that businesses are saying hey, we can't keep paying for the wage spirals. we'll invest in robots, a.i., big data. if that is the case, there has to be ways to make money in the
market? >> fine robotic stocks i guess. but in there you talked about the word consumption and i'm just worried about the consumer as we move -- first off consumer stocks are a horror show but i watch two things. savings rates are plunging and credit card usage skyrocketing. something is up, my friend. people are running out of money. people are running out of the covid money. now we really have to watch employment. if unemployment picks up i'm really going to worry. i think there are too many people out there saying oh, the economy is sound, the economy is just fine. sounds like bernanke and paulson back in '07 and '08 when they said subprime lending was fine, housing never goes down. i'm on watch big time here, my friend. charles: ironically, fed saying it. powell again saying the economy is strong. you know, we've had this discussion, you and i, phil, about all the quote, unquote, excess savings. 2 1/2 trillion dollars.
are they nuts? where is it? the fed says if it is out there the majority with the top 10%. so it would be inconsequential anyway but when these analysts look at these kind of numbers and make policy based on that, don't you wish they went to the supermarket occasionally or to a local gas station? >> i always said a lot of these people are have the butlers buy the food and drivers pick up the bentley and fill up the gas. they really don't have a good feel what is going on on the ground. i do my own little small sampling channel checks and it is a issue out there now. i think that you're seeing it in droves. you know the markets has got great ears, it has a great voice. i think it is hearing a lot. it has great eyes to sing a lot, acting a lot. charles: right. >> we've been seeing it in the market since november and there is still no let-up in this juncture. charles: i know you stepped back
which is is a great move. is anything piquing our interest at all right now? >> since november, we've been 80 to 100% out of our growth accounts. we've done a few forays into the market. biggest bear market has been 11 days. we're trading them. pretty much flat on that. fine and dandy. there is no leadership. i can count on one hand of drug stocks new yearly highs. united health i talked about it before come on again because of government payments but after that there is not much. just about every stock in every sector continues what i call the stair step down. three steps down, one step up. and we're seeing it again in the last few weeks where we had that nasty drop. a good rally up. people feel better and then we got the big hook yesterday. i think yesterday was a pretty big wake-up call. charles: that was ugly, ugly
reversal. talk people feeling okay, this could be it, bam did you get the license plate. >> charles, today with the dow up, more than 2 1/2 to one negative advance declines on the new york and nasdaq and new yearly lows, even the indices are not near new yearly lows have really picked up markedly. that means the average stock is starting to get in trouble again. these are the indicators that got me out early in november and off of every rally since. i would be real careful here. i'm seeing guidance coming down for a lot of companies. we're entering earnings season. i don't think the central banks are still on their game. some of the things i'm hearing from them the last two days has me scratching my forehead, twirling my eyes. charles: i hear you gary. you're not only one. always appreciate it, my friend. we'll be right back.
charles: so let's face it right now the nation is in a crisis and in many ways it reminds me of jimmy carters years as president his infamous turn down the thermo thermostat put on a sweater speech, and there's no way we can quickly solve it that was followed up two years later with a speech you remember that was the crisis of confidence speech. now he was right about an erosion of our confidence in the future threatens to destroy the social and political fabric of america and i have to say i wish president biden would look back at some of these speeches
because instead of the blame game, constantly pitting us against each other, maybe it would underscore because this is what carter tried to do. the beauty of our nation which is allowed to disagree. we can disagree and still be family. the great news though of course is we are built on the constitution. we can't let lawmakers break us apart. i know people are down right now , but keep the faith. by the way, listen to jimmy carter on this one. liz claman, over to you. liz: yeah, how about these markets? i have a song. i have an analogy. charles: i'm ready. liz: up down, they're like the rubber band man. charles: you can't go wrong with the spinners. liz: charles thank you very much the clock is running, those are the exact words fed chair jay powell is using today to say that reducing inflation is paramount but worries about a hawkish fed have market players undecided if i big rate move at the end of next month could tip the economy into a rec