tv Cavuto Coast to Coast FOX Business August 22, 2018 12:00pm-2:00pm EDT
they were holding a moment of silence for aretha franklin. >> that's right. stuart: i like that. clear, beautiful rainbow right there, just at the perfect moment for the wonderful aretha franklin. >> celebrate a legend. stuart: we like that. neil, it's yours. neil: that is beautiful. thank you very much. i think it's looking beautiful right now. despite the slight downdraft is the longest bull market in history is on. welcome, everybody, i'm neil cavuto. coming up, a read on the historic day and what it means for you and your money, not focus on the red or the blue or which party can take a bow. all. this trillions of dollars of green. the read from former nasdaq chairman and ceo, and cme group chairman and ceo terry duffy, former obama economic adviser austan goolsbee, and a bear in his own right says don't get carried away. first of all, a look back in time and how we got where we
are right now? to connell mcshane who wasn't even born. reporter: we've never had a bull market last this long, neil, without a 20% pullback and for perspective for those of us who weren't born, as we sit here and date 4353, we thought maybe it would be helpful to rewind. go back to day one. march 9 of 2009, s&p 500 index put in an ominous intra-day low, it was 666. and market observers were predicting more declines. you remember that the financial crisis of the year before it wiped out the likes of bear stearns and lehman brothers not to mention the savings of sone many americans. we didn't know it but the low for the market had been established on that day, and later that month something of a turning point, the dow jones industrial average shot up nearly 500 points as tim geithner unveiled latest bailout plan. a public-private partnership to
relieve banks of toxic assets. bull run was just getting started helped along by a federal reserve that kept interest rates extraordinarily low, pumped as much money into the system as possible. the s&p, then and now, gained 324%. some of the most impressive individual gains reserved for technology companies. look at apple. gain would be more than 1700%. not just tech, though. three other dow names posted 1,000% advances, united health, visa and boeing. along the way certainly bumps, just none that equaled 20%. you remember the summer of 2011, on friday august 5th of that year. united states stripped of aaa credit rating. following monday the dow fell 635 points. and even the election of donald trump as president, november of 2016, that was initially greeted in negative fashion. the stock index futures tanked
on election night. lower taxes and fewer regulation policies. the market rallied more than 4% november 30, 2011 thanks to positive economic news and word of more help to come from central banks. another 4% on march 26, 2015, fed speak that interest rate hike wasn't such a great idea and 3% march 26 of this year as we learn the u.s. and china are talking about avoiding a trade war. here we are nearly a decade in and while no one knows how long the bull market will last, it has outlasted all the others and added more than $27 trillion in paper wealth. amazing stuff. back to. neil: thank you very much, connell mcshane. people look at the duration of the rally and say it's longer than the 90s one. maybe we're running out of steam here. stocks appreciated better than
417% in the vicinity of 315%. you could make the argument, and we have a ways to go. to mark zandi where he thinks that's the case that there's still a lot of running room here because of the fundamentals are sound. what do you think? >> not a lot of running room. i think that -- let me put it this way, stock prices three, four years from now will be where they are today. lots of ups and downs but i don't think we'll make a lot of progress. i'm not calling for the end of the bull market but i think the best days of the bull market are behind us. neil: all right, you base that on -- there are a lot of people who look at the value of this market and say, you know, historically it's not all that rich, you could make a good run since more than half of the american people are invested in the market, more might be intrigued to do so following this. what do you think? >> three things. one, we can debate valuation,
but it's on the high side of fair value. maybe slightly overvalued. it's not like it was in the late 1990s for sure, or 2,000, it's on the high side of fair value. second, the federal reserve is going to be raising rates. the unemployment rate is heading lower because of the fiscal stimulus and the fed is going to have to raise rates. that's going to put pressure on price-to-earnings multiples. neil: but if you think about it, mark, the rate hikes have not done much to dampen investors' enthusiasm, the one we've already seen, right? >> no, not yet because the fed is still very accommodative. interest rates are very low. the fed funds rate is only 2%, by any measure it's accommodating the economy in financial markets. but over the next year, over the next 18 months, they have to normalize rates. raise rates and make them much more accommodative. going from being a friend to the market to being a problem for the market.
and also the economy, the economy is all juiced up. that's going to fade away by this time next year, certainly by the end of the decade and so growth rates will slow. put pressure on businesses and their profit margins. so, you know, the market has come a long way, ten years is a long time. i don't think it's headed south any time soon, but i do think the best returns are certainly in the rearview mirror. neil: mark zandi, thank you very much. another read on this, i did not mean to start with a wet blanket, back to back bears or not optimistic, this is when we can get them on the show at different times. it was not my desire to start off with those who would have a dismal view. that's fine. everyone is entitled to their own opinion. on the phone with us, a man who might put mr. zandi to shame,
talking about peter, your view has always been that this market was built on a lot of froth and you had a lot of worries, do you still have the worries? >> not always been that, neil, indeed, i continue to have the same worries as before. we haven't spoken for a while. going back in february, we talked about the sign of the bear technical indicator that was given. here's the interesting thing, neil. if you look at most broadly based of the new york stock exchange stocks, the new york stock exchange index itself which includes every stock on the new york stock exchange, that is around 3% from all-time highs in january. still has not passed the january high. and one of the more psychological averages, the djia, the dow jones industrial average is itself 3% away. neil: the highs reached, and you could argue if you average
it all up over the many years that the multiples still look good. that's the bullish argument. you're not so sure of that, right? >> oh, i would not make that argument at all. here's what people have to do, neil, if they want to make this market look good in terms of valuation. they have to say, you know the earnings estimates are for six months or a year out or for this calendar year, that's where they take the price-to-earnings ratios from. they are never correct. probably the worst numbers you get from wall street is the estimates of earnings. what you really need to do is in real time look at the prior 12 months of earnings and see what the p/e ratio, the price-to-earnings ratio is from that. that by the way is not an ideal indicator either. one of my favorite indicators is look at the yield on the market averages. when you see the yield on the s&p is below 2% on s&p stocks,
you know that you're very, very overvalued, neil. neil: peter, what do you see happening now? in other words, this has been a very long bull market here, you think it's time for it to rest. what do you envision? >> well, not only time for it to rest but time for us to reach a major high, neil. i can't rule out the possibility that we go to slightly higher highs in the dow or the s&p, but if you're talking about the market's prospects over the next five or ten years, i would be amazed if ten years from now, neil, we are above where we are now in the averages. those are my prospects. a decade. neil: you think ten years we're looking back at this similarly to what started in early 2009, we'd be hard pressed to be higher. >> that's correct, that's correct. i'd be very surprised if in the meantime, within the ten years, we don't see a decline of at
least the magnitude of 07, 09, well over 50% or greater. neil: i know you're a technician, what might propel that? >> well, what's going to happen, theoretically is we talked about this before, neil, look at what the unemployment rate is, it's a wonderful figure, it's 3% or below. but go back over the last 40 years and look at what happened when the unemployment gets that low. no more room for expansion and bad things start to happen. the great economic numbers turn out to be bad economic numbers for the prospects of the economy. neil: i love you to death, peter, i so hope you're wrong. always good chatting. peter eliades. we do not do this by design back to market negative folks at the outset. we weren't looking for, and we have plenty of bulls, big names, those who were there then in the early days of the market and now when they can show up here. i did not want to give you a
metastatic breast cancer is relentless, but i'm relentless too. mbc doesn't take a day off, and neither will i. and i treat my mbc with new everyday verzenio- the only one of its kind that can be taken every day. in fact, verzenio is a cdk4 & 6 inhibitor for postmenopausal women with hr+, her2- mbc, approved, with hormonal therapy, as an everyday treatment for a relentless disease. verzenio + an ai is proven to help women have significantly more time without disease progression, and more than half of women saw their tumors shrink vs an ai. diarrhea is common, may be severe, and may cause dehydration or infection.
before taking verzenio, tell your doctor if you have fever, chills, or other signs of infection. verzenio may cause low white blood cell counts, which may cause serious infection that can lead to death. serious liver problems can occur. symptoms may include tiredness, loss of appetite, stomach pain, and bleeding or bruising more easily than normal. blood clots that can lead to death have also occurred. talk to your doctor right away if you notice pain or swelling in your arms or legs, shortness of breath, chest pain or rapid breathing or heart rate. tell your doctor if you are pregnant, breastfeeding, or plan to become pregnant. common side effects include nausea, infections, low red and white blood cells and platelets, decreased appetite, headache, abdominal pain, tiredness, vomiting, and hair thinning or loss. i'm relentless. and my doctor and i choose to treat my mbc with verzenio. be relentless. ask your doctor about everyday verzenio. it's a revolution in sleep. the new sleep number 360 smart bed is on sale now, from $899, during sleep number's 'biggest sale of the year'. it senses your movement, and automatically adjusts
to keep you both comfortable. it even helps with this. so you wake up ready to put your pedal to the metal. and now, all beds are on sale. save 50% on the new sleep number 360 limited edition smart bed. plus, 24-month financing and free home delivery. ends saturday. sleep number. proven, quality sleep. . neil: all right, this bull market run, is it donald
trumps? barack obama? what if i told you it's both. we're going to explore. that we're going to explore a third entity who was more of a major player than you know or appreciate and brought us to the point. the guy who orchestrated near 0% interest rates for upwards of a decade. talking about ben bernanke, the federal reserve chairman in the midst of the meltdown, kept providing the liquidity and cash banks needed to right themselves. what was then, what does a bigtime banker think of it now, to john allison. i don't know whether we could have advanced the way we did for good or bad reasons if not for ben bernanke and not for interest rates being forcibly dropped to zero. what do you think? >> i think lowering rates definitely created incentive in the economy. how much incentive is an interesting question, how much rates were forced below what market rates would have been.
neil: all right pushing what was obvious. what did you think of that? there's a view with fiscal stimulus provided by barack obama. a lot of tax cuts on the rest provided down the road by donald trump, but in the middle of that, a zero rate environment, what do you think? >> i think it helped incentivize economic activity but leads to calculations and the fed does have to undo what it did, and that could be a challenge. although i'm generally optimistic where the economy goes. i think one of the big negative drags will be the fed trying to raise interest rates back to normal levels, which if it sdrnths will lead to excess optimism and missed investments like we had in 2005 and 2006. so they have an interesting challenge in that regard. neil: yeah, to put it mildly. john, i've been asking a lot of smart folks over the last couple of days, it could happen again? could we have a financial
meltdown? the kind of stuff for which we were rising, 3453 days ago, what do you think? >> i think it's unlikely but still possible. i think that, you know, the fed has stimulated housing again, particularly with a lot of these programs where you don't have to put anything down to buy a house. you can look at the stock market where i feel good about it but it's pretty high, relative to economic standards and pretty much depend that everything will continue. there are a lot of positives, tax cuts, reduced regulation, i think the court system we have a sense of a rule of law. all that creates optimism in businesses and incredibly important. huge advances in technology. on the other hand, if we started international trade war or don't deal effectively immigration, we're going to drive up labor costs. we need more people in the united states if we're going to
continue this growth. human beings that are productive raise the standard of living. so if the government did nothing, you know, except do normal activity, i would be pretty optimistic, but rather they'll do something dumb, it's hard for me to guess. neil: we're told banks in particular are shielded from something that could hit them akin to the meltdown, that they have to have more cash on hand, be a little bit more prepared for that, but i always have felt, i know you feel, john, in the midst of a meltdown are stocks losing value so fast? that's currency right there, and if that's imploding, you're imploding, what do you think? >> yeah, banks largely reflect the economy and banks are fairly leveraged. unfortunately a lot of things they've done to theoretically reduce risk have increased risk, the waiting of risking are the issue of how they
compete soundness is encourage banks to take the same risk, that's a lot of what happened in the last crisis. banks were way overinvested in housing because the incentives that the government was providing to overinvest in housing. i worry that a lot of the things that they thought would improve the system actually increased the risk in the system. i'm a big advocate of getting the government out except require banks to have strong capital positions and then get diversified risks among the institutions and one company could fail, one bank could fail, but the risk of a systematic failure would be reduced. neil: what do you tell young people? 55% of us are invested directly or indirectly in the stock market. half of them are not, particularly young people. what do you tell them now hearing you talking about the markets and the economy, and they say i want in, i want in at these levels. >> i tell people to do
diversified investing. if you have a little bit of savings, you want to put some of it into the stock market, you want to put some of it in the bond market, and you know, make should level of real estate investments. i think you should only do it if you can afford to do it for the long-term, but i think can you force discipline on yourself. when i went to work for bb&t, a farm bank and the president said i'm not going to pay you much but teach you how to live on what you make, and i started buying bb&t stock after i went to work for the bank, and that was very significant in terms of my own personal financial position. neil: look at you now, young man. john, a real pleasure. thank you very much. john allison, former bb&t ceo, former cato institute ceo as well. a raging debate, comes back to politics. we try to avoid it whether this is the trump recovery, whether it's the obama recovery.
. neil: all right, we are now officially looking at the longest bull market in american history. a lot of people want to pick apart what could undo this? could we get a jump in interest rates, there is a possibility the sentiment goes too far, too bullish, too fast, all of a sudden to be a contrarian you have to go the other way, or political developments. the president getting in a heap of more trouble or scandal surrounds him. some of his former top people, michael cohen and paul manafort are going to jail for quite some time. charlie gasparino following the market impact of all of this which appears to be minimal. >> muted. if you pull up a chart from december 22 to now. a stock chart. s&p or dow, might be if you can
get, that worthwhile here. you will see that the markets have essentially flat lined. right? there we go. that's year to date. if you look at december, yeah. there we go. little easier. it's essentially a flatline, and the reason why is because and the s&p is more pronounced as a flat line, the markets are taking into account two outside influences and i don't think it's interest rates. i think number one is trade. they're worried about trump starting a trade war because of his rhetoric and having a bad impact on gdp and earnings growth to major companies. the other thing is the political risk of what mueller may come up with and what's going on. i think all of that is factored into the fact that since december 22 when they passed the tax cut, the markets have essentially flatlined, and maybe there is interest rate fears in there too, i think it's mostly those two, and i
think it's -- neil: 5% this year? up a little bit on the dow. after last year's pace, that is remarkable. >> you would think, the tax cut was massive to corporations. you know, they kept in most of the loopholes and cut the rate from 35 to 21. that is almost -- neil: so this other stuff that's going to keep a ceiling on stocks? >> it could, until you see daylight. the mueller thing, who knows what he's got. that's the problem, it's so uncertain. s in, the stuff they got michael cohen and manafort is extraneous to the russia investigation, some of the stuff on cohen involves the president directly, whether he knew about a payment to somebody, even though it sounds innocuous. neil: not the type of noise that would rattle investors to the point, this guy brought us the tax cuts, lowered
regulations, did all this stuff is in trouble and now we're in trouble. >> and shows if he's kind of dumb enough, not dumb but reckless enough to tell michael cohen to make the payment and not handle it properly or not do it is the best way to handle that, if he's reckless enough there, what market players say gauging this stuff, well, who knows what he did with russians or what he did in private business affairs which mueller might be looking at. take out the collusion aspect, mueller could be looking at his controversial career in real estate. neil: that's what i'm thinking, we're so focused on collusion and what was going on, and if it ends up in investigation veers wildly off-course, and that this has now come about involving the money and the financial transactions that don't involve this. >> and it's a recklessness. cohen payment to stormy daniels and to establishing that thing with susan mcdougal was very
reckless. first off, it's obvious that it could be a campaign contribution, in-kind campaign contribution, you can make that case easily. the other thing is did you have to go there? you kind of didn't. after the access hollywood tape, would anybody care he had a fling with a . neil: i want to follow this through. even if mueller never gets into this, the democrats take the house, they could. >> they could just squeeze him and heat him up. neil: that does not appear to be coming in the markets? >> not yet. we don't know. one of the overhangs, listen -- neil: this is more after factor to you, interest rates moving up, trade concerns or this thing getting out of control? >> i would put trade concerns, this thing, and interest rates as the three in that order because interest rates, if they move up, it's a sign the economy gets better and there are positives to higher interest
rates, especially marginally higher interest rates which powell plans to do. there is not a lot of positives to a trade war. neil: right. >> to have the president of the united states getting bounced around for two years if the democrats control congress, plus if mueller really has some stuff it is not good. it creates uncertainty. let me make this point because i talk to investors about this. what they said last night, if he was dumb enough or reckless enough, not quite dumb but reckless, to direct michael cohen to make a payment to susan mcdougal or stormy daniels, he is reckless there, he is probably reckless in a lot of other stuff. who knows what is under the hood. that is it what people are looking b. economy, corporate earnings are best things for the market, people buy stocks generally. these are things that get factored into investment decisions. neil: markets are more certain we'll not have uncertainty that
this will all pass but they were certain the trade thing still and might. >> i think they're uncertain it will pass because i think the markets would be higher if we didn't have these overhangs. trade is more of an overhang. neil: barack obama, trump through, who gets the credit for this? >> barack obama's stock market rally was based largely on the fact there was a bailout and that the fed basically kept interest rates very low. neil: came from ridiculously low levels. >> there was nothing magical about his fiscal policy which was a mishmash of, wasting federal money on stimulus that didn't work. neil: but happened under his watch? >> it created a bottom. that was the fed. neil: you give donald trump more credit or the fed more credit? >> the fed propped up the economy and bailed us out. barack obama -- neil: federal reserve, regardless of either president, this wouldn't be?
>> no. i think donald trump has some really good stuff in his fiscal policy. the deregulation was bottom line, went right to the, right to the bottom line of companies. the tax cuts, same thing. i have issues with his tax cut plan. i think he should have done a bigger individual tax cut. we still don't have decent wage growth for other reasons but if you look at the market as a whole, the reason why the economy and market is getting better, primarily because of donald trump's fiscal policies. neil: so is this a rich market to you? >> it depends. it is rich to me, if there is more political uncertainty and he engages in a trade war. i don't think we'll hit the bogeys on -- neil: the last big bull run ended with bill clinton. it was on the cusp of the internet -- >> bush bursting, bush bursting bubble bursting. bush got handed that. >> i don't see a bubble yet.
that is from stuff you don't see. i will say this, if stuff can stop the economy from growing. some of that is political uncertainty. a lot of that is trade, you take those things off. you go back to fundamentals of companies, do the tax cuts, actually give us the bang for the buck so far and deregulation so far has. i think, you know if you can take those two -- but you can't take them off the table because he is still talking about it. and i'm telling you the investors i talk to say this about michael cohen, yes, it doesn't directly affect trump but if you are going to do something crazy like that, which you don't have to do, this isn't a novel theory. "the wall street journal" editorial page said the same thing, if you are doing something dumb or reckless, i don't mean dumb but it is reckless, who knows what is under the hood. you know, i talk to friends of trump -- neil: there is no evidence campaign funds were used to do this. that would be a very --
>> it can be construed as in-kind contribution that the president direction. neil: to alter the election outcome and -- >> i don't think it would have altered the election. i mean -- neil: but again, it gets a little slippery, the president lied in both of those cases, we do know that now. >> well, michael cohen -- neil: said it didn't happen. >> michael cohen said he lied, right. neil: the president later owned up to the payments. >> that's right. first he said it never happened. i i keep track of all his dancing -- neil: he lied. we can dance around it. but he lied. good to see you. you never lie. >> yep. thank you. you like my tie? neil: you're so good at what you do i ignore your fashion. >> of course. neil: we have a lot more on that. he will still be chasing all these parties by the way, no matter where they come, from charlie follows the green and where is it going. imagine being douglas
holtz-eakin in the middle of this whole meltdown. he was point man for john mccain. you remember the famous meeting at the white house, mccain is there, barack obama is there, president bush is there, that might have been the moment mccain lost it. the read from douglas holtz-eakin after this. mgx minerals' disruptive technology can extract lithium - used for batteries from expired oil wells. mgx's new pilot plant aims to produce lithium-carbonate one hundred times faster than from conventional lithium brine. mgx minerals
neil: all right. more of the same. question for you here. would be where we are in this bull market recovery if not for the government diving in? in this laissez-faire world of capitalism where they like the government to be held at bay the government save the day. it is philosophical question and it's a real question. between a stimulus program and supposed to buy back a lot of bank debt and like, federal reserve greasing the skids to buy treasury notes and bonds to keep interest rates really, really low, where would we be without that? people were for a government
solution. this guy was at the epicenter of it all, douglas holtz-eakin, for a while former john mccain economic advisor. i don't know if you accompanied president mccain at the time as 2018 republican nominee with the famous meeting with barack obama and president bush to look in the financial landscape in middle of that, but there was frustration on part of republicans i'm told, that the government had to do something and was doing something. a lot of people didn't like what president bush was doing. john mccain was at a loss understanding whether this was the right strategy to take. what was going on then? >> well, it was a remarkable time, neil. if you recall, john mccain became so concerned about the outlook for the united states that he suspended his campaign publicly, went back to washington, d.c., and tried to broker a solution which ultimately became the tarp bill, so that something would be done to support financial markets in
particular and the economy in general. you know with the hindsight of 10 years i'd to this day admire his dedication to the american people and his desire to get something done but it was foolish politics to think that in the middle of a campaign he can go back to washington and the democrats would let him swoop in to be a hero. they had a gameplan to make sure he failed. they executed it perfectly. the that meeting was the pinnacle of that gameplan, it was disasterous meeting from the point of view helping the american people. neil: everyone looked to the government for some help here we could argue until the cows come home whether rescues started under president bush and continued under barack obama, whether the fed was right to buy all all the treasury notes and bonds, it did remind us when it push comes to shove everyone losing their shirt the government steps in. if it were to happen again, doug, is it your view what we
did then or some type of big government role would be warranted? >> i think we, i hope, we have learned some things from this. my own view is that the single-most effective action taken was the federal reserve. in the end, neil, they ran the oldest central bank playbook, when there is liquidity crunch, lend against any reasonable collateral. they flooded markets with liquidity, single-handedly stopped the fall. did they turn around and generate growth? i don't think so. the continued efforts at quantitative easing never produced good growth but i think they were the key for stopping the crisis. at that point i think there is a good reason to wonder whether tarp made a lot of sense, whether the stimulus made a lot of sense. i at least think that had we been fortunate enough to win that campaign it, would have looked very different. neil: you know, we'll never know, but we do know that relief started under president bush. in fact when congress first
repudiated that. market lost 800 points. >> it was awful. neil: to go ahead and pass it. even after it was passed the dow would fall thousands of more points. is there any lesson there to calm market tantrums, i'm not minimizing they were legitimate and scary tantrums we try to buy their affection? those in government and elsewhere try to get them to like what's going on and they can be finicky? >> i think that some of the actions that were taken actually terrified markets. when the tarp was passed it did not include what ultimately became the gameplan, direct capital injections in the bank. secretary paulson called together the banks, look, you're taking this money, i think that rattled markets dramatically. if you think back, the moment when it started to stablize was the moment they released the first stress test. that wasn't because it said the banks are great. what it said, here, market
participants, here is the information about the worse and better risks, price them for us. once you get ability for markets to price things the private sector is well. it went well after that. providing information is much more important than providing cash. neil: our debt is more than double with it was back then and the bull market climbed since then, it is just weird, isn't it? >> for someone like myself worried about the fiscal outlook for 15 years, coming in to talk to you about it for 15 years it is strange we're staring at deficits of 5% of gdp, trillions of dollars in outstanding debt. debt-to-gdp ratio approaching 100%, the market is quite bullish. only thing they assume there will be capacity to address this and address this quickly. i hope they're right. i listen to you and charlie talk with interest. i agree with a lot of things charlie said, i think one of the great ironies however of this long bull market, it took so long because the recovery was so
bad. in many ways some of the policies of the obama administration contributed to the length of this run. since we've done the deregulations, done the tax reform, the pace of growth has improved dramatically. i'm hoping that the bull market has a lot more time to run but also just accelerate more steeply. neil: here's one thing where it hasn't, the propensity to take on more debt of the republicans or democrats, it is a ticking time bomb, right? >> yeah. it's, we're looking at a trillion dollar deficits starting next year and rising. and, we never seen a major entilement program cut. everyone knows that is the core of our fiscal problems. irv up with knows that is where the money is being spent. they run around and scream about the other accounts. they don't touch the core problem. that is a bipartisan failure. i can only say, it is an enormous risk for this country, one, i don't think we should be
taking. neil: to your point cut is in the words of the beholder. cut in washington means trying to slow the growth of a program. even that is herculean task. >> i think that would be fantastic. here is the last thing on this, neil. everyone thinks, doug holtz-eakin, green eyeshades, doesn't care about people, cut, cut, the real problem with these problems they're not serving the beneficiaries well. we're telling retirees, hey that pension program you call social security, we'll cut it by 25%. that is no way to run a program. so we need to fix these things so that the beneficiaries can rely on them as well. neil: you're right on all counts douglas holtz-eakin, epicenter of so many pieces of american fiscal financial history. how much has changed in just the last few years alone. you know, we talk about what keeps this going. a lot of optimism about tax cuts. a lot of optimism about, unleashing those animal spirits in corporate america. there was a time we were saying
neil: nothing like making a statement of historical economic fact to get a lot of people just all hot and bothered. a lot of people email me, neil, you should know this is the trumbull market. seven plus years prior, obama you bull market. started on his presidency. can't we agree to give both presidents. a lot of people say, neil, you have your head up -- i can't repeat that. that is very nasty. you should stop writing that. i want to not compare what it going on, president trump to barack obama, i do want to go back to the last long bull market whose timeline likely will be beat today, and that goes back when bill clinton was president. we had internet boom. we had the debt being hacked away and we had surpluses that is the parallel. a lot of people are looking at this, by that definition alone, market run-up during that time
span, the markets surged. 417%, by comparison here, 323%. we have a ways to go. john steele gordon. what do you feel about that, john, that we have aways to go? this is compared to that one a rich one this, is a very affordable one? what do you say? >> we have a way to go especially if the economy keeps humming along like the last year. in the 199s, the market got way ahead of itself. neil: when we look what undid that one, it was the internet boom that suddenly went bust. nasdaq cut in half and took close to 10 years to recoup. do you envision anything like that any just see that particularly in technology we have a, you know, a lot more of a sound basis going into it and real palpable earnings that in a lot of cases back then we did not what do you think? >> well that's exactly right and
remember the 1990s bomb was concentrated in technology stocks. neil: absolutely, right. >> a lot of them were just, they were air. they weren't earning any money or anything else. sort of like in the 1920s, after lindbergh flu the atlantic a whole bunch of airline stocks, mostly existed on paper, only one was a going business seaboard airlines. it was not an airline but a railroad. neil: i remember covering that. let me ask you, one thing that comes to mind with this rally, surge in earnings, maybe buoyed by the tax cuts, so would try to avoid politics at all costs here, but the latest argument for this advancing is, taxes are so low, companies have a curse of riches at its disposal, buying back stock, doing the kind of things heretofore would be very difficult in a higher tax environment and that could keep this going awhile?
>> indeed it will i think because we haven't seen the end of that by a long shot and whenever we lowered taxes the market has always gone up. the 1920s, the 1960s, the 2000s, and now. neil: when we look back at bill clinton, a fascinating presidency, a lot of people focused on hike being taxes on well to do, but he cut them for almost everyone else. cut business-related taxes, investment-related taxes and capital gains, et cetera. that did a lot to unleash the sort of animal spirit in the markets, the likes of which we had never seen. go back then, if you can, compare that to the tax environment today? >> well, remember it wasn't bill clinton who cut those taxes t was a republican congress that had been swept into office in 1994. neil: you're right. i tell people on the left and the right, if you're the guy in the white house, you get the apple in your head if you fail.
what do you think of that great accord that did that? >> bill clinton was, didn't have an idealogical bone in his body, whatever he thought was politically good for him he was in favor of. once the republicans came in, he was happy to work with them. he did many good things, reforming welfare, what have you. he didn't act like a democrat during those years, which may account why the economy was so successful. neil: he was rag mat tick. it wasn't his way or the highway. you're right to point out after the midterms in '94 he didn't have that luxury. those were polarizing times, not too many years later with the impeachment and everything else, what is your sense of environment these days? they're talking about the i word, the impeachment for donald trump. it is a worry for the markets. what do you think? >> it's a worry. democrats were talking impeachment before inauguration
day. if democrats get control of the house they may well impeach him even if the republicans still hold the senate which is much more likely. neil: that is where the action is closed in the senate. the house has start something and be finished the and stamped in the senate. thank you my friend. very good catching up with you. >> thank you. neil: there is another market you can make money in. there are not just stocks but you can trade in commodities, wheat, barrelly, oats, soybeans, up to gold and precious metals, everything in between. that market has been interesting as well. if there is a place you want to make money, there are apple choices. the read from the cme after this a little bit of water, it really- it rocked our world. i had no idea the amount of damage that water could do. we called usaa. and they greeted me as they always do. sergeant baker, how are you? they were on it.
neil: all right. it is now technically the longest bull market in history at 3453 days. the question, how long does it keep going here and what would possibly dampen it? we have analysis from cme chairman terry duffy, former nasdaq chairman robert greifeld, former obama economic advisor, austan goolsbee and ben stein and many more. very quiet day on this special day, isn't it? >> you have to look what is going on. i don't like to say quiet day because i'm ready for anything. we have a mixed market. we'll see if we end in the green
on all three. as you noted, neil, look at up arrows for the s&p 500 over this time since 2009. 323% since the bull market. so now we're talking about 3453 days, the longest bull market ever in history. taking a look at the sectors, and we actually have amazon and netflix in the consumer discretionary sector, you can see 3,000 plus for amazon. netflix, 6,000 gain. we saw technology and financials also gaining in this time. if someone were a genius picking it up during the financial crisis you certainly made a cashful. you can see people held, gained it back with apple, 1700% higher overall. some of these financials. as i toss it back to you, neil, as far as how people are feeling on wall street, they're still very optimistic about earnings the economy, the investor, the consumer and saying the only thing that could derail it, a stronger dollar, trade wars and
the fed raising too fast. i can tell you they're not worry about those things at this time. they're very optimistic, neil. neil: thank you, nicole, thank you very much. a lot ask you what is the magic of what happened 3453 days ago. we didn't know it at the time, that would represent the low of s&p 500. eerily enough it was at 666. and certainly that was the start. if you saw that as the beginning, we were in the darkest of periods. one fellow saw opportunity when people were running away, "making money"'s charles payne and, michelle mckinnon. charles, go to you, market we couldn't get out of our way, nothing could be done, cynicism was rampant. now you could argue bullishness is rampant, not across the board. it is not 100% giddy.
>> right. neil: smart guys like you like you go to contrarian point of view we're getting ahead of ourselves. are we? >> according to american association of individual investors, bullishness and bearishness went down of the hallmark of this particular leg of the rally is indifference or neutral. 40% of individual investors consider themselves neutral right now. neil: what does neutral mean? >> i think it is indifference. we're watching the market but we still don't believe. we're not afraid or bullish or bearish. they got stuck in the limbo. the first, dante's limbo. they're stuck there, right? because of all the crashes and all of the insecurities and all the september system. if you're -- skepticism. if you're a contrarian, you think this has many, many miles to the upside because the individual missed so much of it. neil: john, number of people have it fresh in their mind, their memory, the experience was
their home, their investment or remembering their parents the same way. they're still leery, very leery. it only a little over half of americans are in the market as a result. >> they're still very leery, for a lot of good reasons. the last bull market ended very tough. very little comparison to the two. you can't pair pets.com to apple, amazon or facebook. multiple on nasdaq was 71 at the high. nasdaq is 21, 23 as far as market multiples. the biggest thing -- neil: that means market being too rich or not. >> companies are valued consistently lower from 71 to 20. the biggest difference, 2001 you had a 1% gdp growth, it was a tough time. bush tax cuts come in by 2004. 3% growth annually, two thundershower, 2005, the difference we got the tax cuts before the bull market ended. >> i take your view.
i think people are really scared. there is $15 trillion in cash that i think ultimately will find its way in the market, that i think you is a bullish sign. >> excuse me. i have to call my broker. >> get in charles, get in. neil: i remember all sides are represented, getting long in the tooth and there is a lot of churning going on and sectors that should be technically rebounding are not. that is sure sign of a market about to be walloped. >> you always look out for what could hurt but you don't want that to kneecap you or make you indecisive. the inability to jump in because you're always worried, you're always concerned. there is always something to be worried about. maybe those areas he is talking about, maybe they will come on. one thing i do like about the last couple weeks in the market, exhibited the ability to rally without the big tech names leading it. so facebook took a heck of a hit. amazon has been back and forth or not.
netflix took a heck of a hit. now the retail picked it up. yesterday kohl's was down three, finished up one. this morning lowe's was down two or three bucks. it is up 7 bucks. we're seeing money rotate into other areas around i think that is a bullish sign because, really the big question over the last two months, could this market rally without those big five or six tech names? neil: it is all in the fundamentals, right? i was reading a lot of press after the '87 crash and president reagan said fundamentals are fine. the fundamentals are sound. do you think, john, the fundamentals are sound because in both of those cases they did prompt, in case of '89, a minute my tolt mull no one saw coming despite those sound fundamentals? >> i think the basic economy is on fire. i think there are real headwind out there. inflation is a headwind. >> what do you tell investors who dive in right now?
>> i think you pick and choose. i would not go into twitter. i would not buy amazon. >> would you buy a fund mirrors the nasdaq or s&p 500, like people are doing many, many years? >> finally look at the competition, the competition in europe is slowing. the competition in china is slowing. emerging markets are being hurt because rising interest rates make their exports less valuable. i think the u.s. market is the place to be. neil: how do you play that? >> look at the health of the consumer. we had rock star earnings coming out of target this morning. walmart had great earnings last week along with home depot. that alone this consumer healthy and this bull market has a long while to go. neil: there are always things outside expected aberrant events. a lot of people are looking at the president, former two top aides likely to go to jail for many, many years. could this engulf the president and uncertainty of that? there is no way of handicapping that, what do you think? >> one of the first things i did
this morning i went back to see how the market performed under the clinton impeachment. the whole thing blew up in december of 1998. the trial began january 7th. the market slipped a little bit. it was sideways until march 9th. at the worst-case scenario -- neil: short-lived event. >> short-lived event. that is our template for worst-case scenario. we're nowhere near that. i like the idea with this target news, for instance, ceo saying the best environment ever. the key has been traffic. i have come through right now about 15 retail, brick and mortar retail names. the number one thing i'm seeing is traffic. people are getting off the sofa. by the same thing with the jobs. 600,000 people in one month. people are getting off the sofa in america and going outside. some of them are spending money. some of them looking for jobs. but we're getting off the sofa. we're coming out of the bunker. i love it. neil: you started out, when you first wrotethis, look at traffic
outside of stores, look at anecdotal evidence to see whether they're worth the time. >> you start with anecdotal stuff. i try to connect the dots. it helps, particularly for the average investor out there. for years, people tell me, i don't know what to buy. have on under armour hat. why dud buy that? i always tell people if you buy something, with hard-earned money, you tell five family and friends to buy it, maybe you should be owner of the company. just maybe. that's all. neil: at these levels, the company you're buying at a very high price, you say, john? >> i say multiple is coming down significantly. forward multiple of s&p has gone from 18 to about 15 because of earnings growth. earnings growth of about 22% growth. phenomenal in a bull market. attributable, 35% of that is tax cuts. wage pressure for low unemployment to pick up and tax cut, which is over 70% of
consumer gdp. they're starting to see that that has a lot to do that these political scandals shown throughout history the market doesn't care about political scandals. neil: john, you represent age group that has lowest participation in the market. why? >> that is changing. i see in my client base, millenials are coming to me. they have wealth. they are sitting in cash because of 2000, 2018, but potentially they are finally interested in the markets. that is another reason why this bull market could continue. neil: from your mouth to whatever. all right, when we come back, here, the read after the longest bull market run in history from a guy who knows the nasdaq and technology spending well. then the ceo and chairman over at the cme group, how it is not just about stocks anymore. ♪
with tripadvisor, finding your perfect hotel at the lowest price... is as easy as dates, deals, done! simply enter your destination and dates... and see all the hotels for your stay! tripadvisor searches over 200 booking sites... to show you the lowest prices... so you can get the best deal on the right hotel for you. dates, deals, done! tripadvisor. visit tripadvisor.com with its historical records... ...you could learn you're from ireland... ...donegal, ireland... ...and your ancestor was a fisherman. with blue eyes. just like you. begin your journey at ancestry.com.
just like you. retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver.
this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. >> everything that we stand for, we're the greatest country in the world, we are now, and we are now, the greatest economy that we have ever had. we're the greatest economy in the world. [cheers and applause] we have gone up $10 trillion in value since my election. neil: president trump taking a bow for what is happening in the
economy and in the markets. you know, you think about it, things were going south we would be blaming him for it. so it can be a curse of riches or failures depending on your point of view who occupies the oval office. obama economic advisor austan goolsbee. i was looking for you in the crowd. didn't quite make you out. >> did you hear me cheering? neil: i did. we have the arguments, you're pragmatic, we step back, you talk about what barack obama did during the earliest points of the meltdown and dealing with that as a new president and talk about the stuff donald trump has done, i always feel it is not either, it is both. can we leave it at that. what do you think? >> i kind of agree with that. you know, as we have always said when we talk about these things, most of what happens in the economy and in the market have nothing to do with the white house and, i said that when obama was there. and i say that when donald trump is there. if you're going to allocate
credit to washington and presidents for the stock market, you know, that's okay, but you can't really claim you're the guy who won the game, you won the super bowl, when you didn't enter the game until late in the fourth quarter. you know, 80 some percent of the bull market was, now longest bull market ever, 80% of that was under barack obama, okay? so -- neil: all right. all right. i know where you're coming from. i'm not here to argue politics. i do want to step back and talk about what got us out of that quagmire, the meltdown, everything else. people forget that president bush had started these rescues and t.a.r.p. and everything else to sort of right the ship. a lot of die-hard conservatives, laissez-faire types, a lot are bankers by the way, didn't bemoan the help they got then, accept this with a grain ever salt --
>> that's true. neil: argue there are times when the ship is sinking, you throw a life raft out, and generally it is to something in the government. is that a good thing or bad thing? once in place the fear seems to be that you can never detach? >> it is probably a little of both, if there hadn't been bailouts at the end of the bush administration, who would have knows what would have happened. it is certainly not good -- it is good we didn't have a depression but certainly not good to set a precedent we're always come save your bacon if stuff goes wrong. i have said that many times. neil: this is not what you're doing, i'm talking more about ben bernanke and federal reserve, helping all the banks and keeping interest rates forcibly near zero percent for many a year, that we have, we said we wouldn't do that again, i think if it were to repeat itself we would do that again, wouldn't we?
>> i think it would be hard to do it exactly the way they did it again. the law of, unless and until the trump administration gets rid of dodd-frank, dodd-frank makes it difficult to do, let's call them naked bailouts. neil: right. >> where you give money to companies to let them live. dodd-frank requires basically if you do bailouts you can only pay for funeral expenses. you can't pay the hospital bill. neil: you're right. i know that is the argument but i can't help but we're in the middle after free fall in the market, i remember the financial issues torpedoing bear stearns -- >> that was scary. neil: that was the capital shrinking fast. no matter what cash you have on hand, it will not compensate for cash you're losing hand over fist on wall street, right? >> i agree with that, but kind of the question is, should you allow -- let's say somebody gets
in big trouble and it spreads to a bunch of other firms and threatening to bring down the whole system the way that it did at the end of 2008. neil: yeah. >> the question of should you give money to a firm, let that firm live to, see another day, or should you give money to somebody else to buy that firm and break it up and let us never speak of that firm again? those are two different kinds of bailouts that are, i think the moral hazard problem is very different from those two. neil: you think it could happen again? >> i hope not but, i mean you can't rule out that it could happen again and for sure it could happen again in other financial systems in the u.s. where they didn't have the kind of reckoning and accounting for the problems, come forward, do a stress test, show us the full kimono, what the problems are. there are a lot of countries in
the world did not do that and for sure it could happen there. neil: you dealt with a lot with your time in office, whether left or right, it is thankless task, many told me that. austan, as you good having you. >> love seeing you, neil. neil: former nasdaq ceo robert greifeld on the tech this bull market versus the last bull market. why? because those guys have earnings, real palpable earnings, after this. u should be rushed into booking one. that's why we created expedia's add-on advantage. now after booking your flight, you unlock discounts on select hotels right until the day you leave. ♪ add-on advantage. discounted hotel rates when you add on to your trip. only when you book with expedia.
i thought my health was perfect. then i had a screening and doctor's discovered i had a serious medical issue. unfortunately, it was the end of my football career, but if i hadn't been tested it could have been the end of my life. i believe in preventive testing, it saved me. many health issues like mine have little or no symptoms. life line screening goes beyond your anual check-up to tell you what your body isn't. call and schedule an appointment. call right now and save over 50%. just $149 for 5 painless screenings including an ultrasound test that actually looks inside your arteries for plaque that builds up as you age, increasing your risk for stroke and heart disease. after all, 4 out of 5 people that have a stroke, have no symptoms. if you're over 40, take control of your health today and call life line screening. life line screening. the power of prevention. call to learn more.
the power of prevention. used for batteries frome teexpired oil wells. mgx's new - pilot plant aims to produce lithium-carbonate one hundred times faster than from conventional lithium brine. mgx minerals neil: you know, they say what could undo this rally? political outside event, a president getting scrutinized by bob mueller, michael cohen situation, much more, hillary vaughn at white house with more on that. we're getting more as we speak. hey, hillary. reporter: rocking the white house, we're getting reaction on camera from the president, in a sneak peek of an interview airing on "fox & friends" with fox's
ainsley earhardt, where he addressed the hush-money payment where michael cohen pled guilty to paying. saying he did so because president donald trump directed him to when he was a candidate. >> did you know about the payments? >> later on i knew, later on. but you have to understand, ainsley, what he did, and they weren't taken out of campaign finance. that is at big thing. that is a much bigger thing did they cam out of the campaign. they came from me. i tweeted about it. i don't know if you know i tweeted about the payments but they didn't come out of campaign. in fact my first question, when i heard about it was, did they come out of the campaign? because that could be a little dicey. and, they didn't come out of the campaign. and that is big. but they weren't, it is not even a campaign violation. if you look at president obama, he had a massive campaign violation but he had a different
attorney general, and they viewed it a lot different. reporter: the white house is making efforts to discredit cohen saying he is not credible. he is a liar. the new york prosecutor that brought this case against cohen yesterday also said that he had a pattern of lies and deceit. this may not be the last time we're hearing from michael cohen. his lawyer lanny davis saying this morning he would be willing to testify in front of any congressional hearing, committee, on this issue, even if he was not granted immunity. also, we have at the same time, happening here at the white house, the presidenting a knowledging the record-breaking run happening right now on wall street, but, a lot of this political noise could be getting in the way. some investors are worried that these scandals may have a trickle-down effect on the market, but, there is one person who is saying, they don't think there is anything to see here. merrill lynch's andy sieg, taking a long-term look.
he thinks we're only 10 years into a 50-year bull market cycle, saying quote, you need to avoid getting wrapped up in the day-to-day noise, focus on the fundamentals. the internal risk to investors is be distracted by fundamentals from the day's headlines or the day's tweets. another big question mark what will happen from the white house and the administration on trade. that continues to be a pressure point in the market as well. neil. neil: i like the 50-year bull market thing but i don't know. we'll see. hillary, thank you so much. hillary at the white house. i do want to touch on a lot of these developments and whether these political developments, scandals, whatever you call them will weigh on investors as they start to fear that the president's attention or maybe the president himself gets sidelined, former nasdaq chairman and ceo, robert greifeld. >> good to see you, neil. neil: the outside noise, this could materialize into something, manafort, cohen,
possibly others, markets abhor uncertainty. that is an uncertain future. what do you think? >> i think the markets will focus on the corporate earnings. that is will be the drivers of the market. ooh i'm not sure a 50-year bull market, at the end. day what matters are earnings growing, are corporations doing better? i think the prognosis of that certainly next 12 months are quite strong. neil: markets are not, people find this hard to believe. they're not red or blue. they're just green. they like to make a lot of money. they have been making a lot of money right now with donald trump. they don't want to see that disrupted, right? >> no, definitely not. the markets are completely apolitical. neil: right. >> the expression of the marketplace. neil: neil: do you know what's also alive and well? technology is very different from the first wave of love,
right? in the last bull market would be the internet boom and a lot of these companies getting earnings , how do you see the difference? >> well it's dramatic difference and you highlighted the important factor back in 2000 and i'm old enough to remember back in 2000 you had companies trading on the ether, their own promise of the future and now when you look at a company like apple, by any measure, especially the cash they have on the balance sheet this stock is fairly priced so that's a dramatic and complete difference than we had 15-18 years ago. neil: but the apple was the exception to the rule and now facebook would come later in this bull market but do you worry that the people, that there are technology funds that hang on the very survival and the thrust from these companies and the so-called fang stocks, that, you know, shows a dependence on just one key sector? >> well one is yet to recognize that technology cuts across all
sectors right so you have companies identified as technology companies but any industry right now is a technology-based industry whether it be retail, banking, think about how pervasive technology is in that arena, so you're going to see technology continue to advance, tinty to be more important across all sector s of the marketplace. neil: what about individuals 55% of americans invest directly in the markets more might be affected obviously but that number hasn't budged and what do you tell roughly half of americans who are not in this? >> well, first off you have to understand the whole financial picture, but clearly, there are ways to get into the market indirectly which i think a lot of people individuals go that route, but if you look at the fullness of time, those people have invested in the equity markets have outperformed other asset classes. are there one, three, five-years
to that of course but over the time being involved in the equity market will provide a better return. neil: but it depends on the timeframe? >> oh, yeah. neil: obviously if you wanted to mimick the nasdac for example, in 2000 when it peaked you've waited close to a decade to get your money back but what do you tell young people in particular who always talk to me and say neil i really want to get on this thing? >> well i'm saying especially if you're a young person you have the time in your career and your life to wait out the ups and downs of the marketplace. do not try to time the marketplace, be in the marketplace for the ups and the downs and over then the fullness of time you'll get a superior return on your invested assets. neil: what do you tell people look at the landscape now we're clearly the world's engine here, in terms of the economy and what's going on in our markets. do you see that continuing? >> well i see what the most
optimistic viewpoint is understand the tax reform which was substantially put in place this year, has really not fully affected corporate earnings as of yet. also, we've been on a de regulatory -- neil: but it helps for comparisons right? >> it certainly does. neil: last year when the taxes were much higher. >> but you're talking about the direct impact of the tax cut. i'm talking about the ability to invest more in your business over time. neil: we're seeing a lot of that though companies buyback stock. which they're free to do. >> they're definitely free to do but i think you're seeing both you have enough of a benefit from the tax cut and you also have the business performing well where they can serve two masters where they can buyback stock, return capital to shareholders in a tax efficient way that's a good thing while also investing in their future, and so that investment in the future not showing up in the numb berms you see today or next quarter. likewise when you look at the performance of the companies, the ability to take that
incremental money, and do really wonderful things on it, i think is going to be quite fascinating to see. the other factor is deregulation that takes a long period of time to show up in corporate earnings so you have a deregulatory environment that gives you some new business opportunities, opportunities you wouldn't have pursued before and if you pursue that you're not going to get a return instantaneously so look at the earnings today i still see that we have tailwinds coming with respect to the changes this administration has made. neil: and trade and potentially higher rates right? >> yeah, well trade is certainly out there and i think when you talk to most executives today and the general public and anybody whose read the art of the deal, they know there's back and forth. neil: so they think cooler heads prevail this isn't going to be a big deal? >> i think it's noise right now it's posturing to the extent it gets real and then it'll have a negative impact on the marketplace but we'll see what transpires and what's the end state. neil: thank you very very much.
speaking of that environment where we have trade being a big worry it's already affecting agricultural goods and my next guest knows it cme group chairman terry duffy on the trade war already being played out on his exchange in realtime, after this. ♪ adults are just kids with much, much better toys. introducing the 2018 c-class sedan, coupe and cabriolet. the thrills keep getting better.
lease the c300 sedan for $399 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. ♪ as moms, we send our kids out into the world, full of hope. and we don't want something like meningitis b getting in their way. meningococcal group b disease, or meningitis b, is real. bexsero is a vaccine to help prevent meningitis b in 10-25 year olds. even if meningitis b is uncommon, that's not a chance we're willing to take. meningitis b is different from the meningitis most teens were probably vaccinated against when younger. we're getting the word out against meningitis b. our teens are getting bexsero. bexsero should not be given if you had a severe allergic reaction after a previous dose. most common side effects are pain, redness or hardness at the injection site; muscle pain; fatigue; headache; nausea; and joint pain. bexsero may not protect all individuals. tell your healthcare professional if you're pregnant or if you have received any other meningitis b vaccines. ask your healthcare professional about the risks and benefits of bexsero and if vaccination with bexsero is right for your teen.
moms, we can't wait. ♪ with tripadvisor, finding your perfect hotel at the lowest price... is as easy as dates, deals, done! simply enter your destination and dates... and see all the hotels for your stay! tripadvisor searches over 200 booking sites... to show you the lowest prices... so you can get the best deal on the right hotel for you. dates, deals, done!
neil: you know, look at a bull market run and think just stocks there are other ways that you can invest and other ways you can make a lot of money and if you like to invest in things that are not just equity you have a wide choice from precious metals to everything in the agricultural commodities market from barely and wheat and soybeans and all the stuff caught up in a potential trade war that's going on globally, and doesn't this next guest know that the ce m group chairman and ceo terry duffy good to have you >> thank you, neil appreciate it. neil: you know used to be the old run that if stocks are
having a bad day, commodities and things you oversee are having a good day. that's no longer thought to be the case. they could both have a wild ride good or bad. what changed? >> well i just think that you started off talking a little bit about the tariffs earlier and i think when you look at the markets today, they are so global in nature that they become interconnected instead of disconnected like the old days so the interconnection of the marketplace were all dependent upon each other that's why global trade is critically important that's why the united states, china, canada, mexico and the european nations all got to come together and get these trade issues resolved because it doesn't help anybody to have these things linger because they are connected and we are connected, the world is much smaller. neil: you know, do you think there is a method to what the president is trying here he says he can be very very patient but he's been very all over the map on who he wants to target and how much he wants to target them and he leaves people confused.
does he leave you confused? >> [laughter] i don't know if he leaves me confused i look at running the marketplace as you know and all i can say is i don't think tariffs are good for the markets , i don't think they are good for global trade at the same time we need fair trade so i can understand where the president is coming from but eventually we've got to call the question here and i said this to you not too long ago. i think that eventually these tariffs they start to have an impact and i think china is wanting to get to the table sooner rather than later as having an impact on their economy. you look at the currency as not record lows but lows last week so again i think that not only china but the pane nations and of course canada and mexico would love to have this issue resolved but what the president is thinking i'm not quite sure. all i know is that the market needs is a global market and whether you're investing in derivatives or investing in individual stocks you'd like to
see this resolved. neil: that is a very politically correct answer young man. >> [laughter] neil: i know where you're coming from but i'm curious about something here there's a lot of worry about inflation rearing its ugly head and of course it would have to go a long way to get back to what you and i can remember but there is this fear that the federal reserve has to get ahead of it and jerome power despite the criticism he's getting from the president despite the crowd that he regret s choosing the guy. >> i didn't hear that. pete: do you think that's going to be a big worry and going forward maybe it helps a lot of the commodities and stuff but that it changes the dynamic a little bit? >> well i didn't hear that the president said that he chose the wrong guy because i think that would be a mistake to say that. i think chairman powell has done an exceptional job in a short period of time he's been there. neil: i want to be clear you mentioned this last week at the hamptons event where he said had
had known, i'm paraphrasing, that he would be hiking rates that he would not have done what he did but it's done. he's the fed chairman now and a lot of people say he is going to start hiking rates to address inflation or to get ahead of it what do you think? >> i think he's take in a realistic approach. the fed only has so many tools, taking down their balance sheet, we have the only federal reserve that does not hedge their portfolio of their balance sheet around the world so now that means others have to assume that they need to hedge it out so when you look at what chairman powell is trying to do if in fact the economy has a downturn, he's got so many levers he can pull but if he's got rates at such historically low levels he's got very little room to the downside, so why would you not want to take advantage of the economy that the president has been touting the unemployment numbers have been touting to raise rates even though you don't have inflation, so you have some tools in your arsenal in case the market has downturn?
to me it makes pure good economic business sense for what the chairman has along with the other federal reserve directors. neil: you think about it now it's easier to mark now the low point at which we would come crawling back, when we got down to 666 in the s&p 500, little did we know then that that would be the start of the turnaround that would produce the longest bull market in history. now we're looking at an environment where people are saying well then this can't go much longer. is it your sense that this can't go much longer? >> well neil i've always known when people try to predict high tops and bottoms they are wrong but then eventually somebody will be right because it's just catch a falling knife theory so i look at what's going on today in the marketplace and i don't think people are really developing the efficiencies that have been created from the last bull market so look at 1990 to 2000 which was the dot com bust possible but a lot of technology
was discovered through that time period. a lot of it is being deployed today which has empowered the consumer to a point where i don't think any of us ever imagined so that can extend markets a lot longer because of technology, efficiencies, capital efficiencies and look at some of the growth of the companies that we've seen in america, a trillion dollar company in apple and the growth of caption but look at the smaller companies they've been able to grow. the united states has historical ly been a safe haven for investment and that's really accelerated over the last couple of years especially what's going on around the rest of the world so it doesn't surprise me a bit. i don't know if the top is in or just the beginning of another leg up that's not for me to decide but i will tell you we live in a different time than back in the 90s or even nearly 2000s. neil: you can always make money on the trade as well. we always forget that. cmex group chairman and ceo great seeing you thank you very
much. >> thank you, neil appreciate it buddy. neil: ben stein has been among those who say i'm not a market timer or not smart enough to know exactly what's going to happen but i am smart enough to know for the long-haul i'm investing in stocks it's a good bet. he's been proven right time and again, and he's next. at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & if your customer also forgets socks! & you could send him a coupon for that item.
designed to save you money. wireless network whether you use your phone to get fit. to find meaningful, thoughtful, slightly-weird gifts. or just to know which way you're facing right now. however you use it, your wireless bill is about to cost a whole lot less. ask how you get xfinity mobile included with your xfinity internet. so you just pay for data -- by the gig or unlimited. saving you hundreds of dollars a year. plus, get $300 back when you buy a new smartphone. xfinity mobile. it's simple. easy. awesome. click, call or visit a store today. yeah, i got some financialbody guidance a while ago. how'd that go? he kept spelling my name with an 'i' but it's bryan with a 'y.' yeah, since birth. that drives me crazy. yes. it's on all your email. yes. they should know this? yeah. the guy was my brother-in-law. that's ridiculous. well, i happen to know some people. do they listen? what? they're amazing listeners. nice. guidance from professionals who take their time to get to know you.
it's a revolution in sleep. the new sleep number 360 smart bed is on sale now, from $899, during sleep number's 'biggest sale of the year'. it senses your movement, and automatically adjusts to keep you both comfortable. it even helps with this. so you wake up ready to put your pedal to the metal. and now, all beds are on sale. save 50% on the new sleep number 360 limited edition smart bed. plus, 24-month financing and free home delivery. ends saturday. sleep number. proven, quality sleep.
neil: you know, in the markets they say that time is your friend that if you give it enough time no matter when you buy into these markets they will reward you. they will make you some money, to economist best selling author , lawyer, actor, you name it, ben stein. ben we always forget that but over these many many years you told me you're not, you know, smart enough to know the right stock at the right time. you are appreciative enough to know that capitalism wins out over time. what do you think? ben: well it wins out in a huge huge huge way and it's unbelievable anybody would be questioning that, the data is just overwhelming and capitalism is the way to go. data is overwhelming over very long periods of time the stock market is the way to go. now bear in mind there's been times when the stock market is very sluggish but generally those have been times when the dividend rate has been quite high and so people have done already on the dividends
but this kind of run we've experienced the last 10 years that's unprecedented and you would think that would make all the college students be jumping for joy saying i want in, but no , they want to be socialists. neil: well a good man it certainly think more of socialism than they do capital in. why is that? ben: they're stupid. neil: all right ben: they just aren't very smart so bear in mind i'm about to speak at a university in ohio, so those ones are really really smart, but somehow, maybe a lot of them have become brainwashed to the idea that if you're a capitalist you're a pig and swine and you're cheating people and not letting people have decent healthcare. that's all nonsense. people are better by any metric whatsoever under capitalism than any socialism, unless maybe you're in sweden or denmark but other than that they're better off under capitalism and they
have a much bigger scope of imagination. a bigger scope of being somebody i mean, the other night i was watching jimmy kimmel, my hero although he's a huge democrat and they had this one run after another of minority group entertainers who had become incredibly rich and i was thinking to myself, you guys should be huge huge backers of cap capitalism and they are. they are, where they've seen it work in their own lives they are neil: so i always think whether they're young or old or a lot of people had the meltdown experience of either losing their homes or seeing their parents lose everything they had , and i think to this day, it freezes them and makes them think twice. that thing that ruined my parent s or whatever i know what it is because the participation rate is still as you know has been very very low and for individual millennial investors and younger, extremely low and i'm wondering how that changes? >> well, its got to change. you know what's really really
interesting neil, old friend, is how much lower the participation rate is for women than for men. here we have a gigantic gender gap. the stock market has been very very good to the men who have invested and good to the women who have invested but women tend not to invest in the stock market to anywhere near the extent men do. neil: why is that? ben: it's because i think they are scared and they've been brain washed into thinking the market is going to be cheating them and takeaway all their money but if i were a person at the new york stock exchange or whatever runs the stock exchange these days, i would say to myself, our next big market is women. we have so many talented brilliant hard working well paid women. why are they not getting in on the stock market except through their retirement plans or through their husband's or maybe their fathers. why is it that women are discriminating against themselves by not getting into the market? neil: yeah, maybe they're more risk averse who knows but when
you look at the -- ben: way more risk averse. neil: right so when you look at the market the way it is right now. there are a lot of folks look and say well you know, yeah, this is the longest bull market in history, yeah, it could run some more because it hasn't gone up as much as the last bull market, but you've got to be cautious and pick your battles so when a young person comes up to you ben and says all right i heard my hero ben stein talking about this market and i want in. what do you tell them to do? now you are to getting into individual stocks they're a crap shoot for you but you're open to mutual funds and open to buy something that represents the s&p 500, how do you play it and give advice? ben: i play it by saying buy the spiders, buy the s&p index fund and you'll get most of the benefit that anyone else would get. look, -- neil: but over time, right? ben: patience is a virtue. neil: what's a long period of
time? ben: 10 years. if you can't be in there for 10 years then maybe you shouldn't be there at all but stocks are just great, an incredible genius wrote a book called stocks for the long run and his data is overwhelmingly powerful and may i add as a person who has a great deal of real estate relative to my individual means, selling real estate is a nightmare whereas if you pick-up the phone you sell stocks in 30 seconds or three seconds or something like that, i love love love the stock market and the stock market is god's gift to the ordinary citizen. neil: all right so you did well in real estate. better during the meltdown than you did in stocks, right? ben: well, i did fairly well but i haven't sold any yet and i'm leaving it to my son i've decided let him have to worry about it he's young and patient and he can worry about it but stocks are a genius investment. stocks allow the ordinary dollar
slob fat person like me to become like a businessman. i wrote a book about this called the capitalist crowd which i said you basically become a businessman by buying a lot of stocks and the indexes and i sent it off to warren buffett and he said he completely agreed so if he agrees it's right. neil: by the way thank you for pushing our demo so much in the course of this interview by turning off young investors so that was a great move on your part, thank you. ben: no, i'm saying no no no i want them to come in. neil: i don't think they got that message because they're sending me nasty e-mails right now but ben, i love you thank you very very much. neil: [laughter] they are. neil: more after this. . .
once-daily xarelto®, a latest-generation blood thinner significantly lowers the risk of stroke in people with afib not caused by a heart valve problem. warfarin interferes with at least 6 of your body's natural blood-clotting factors. xarelto® is selective, targeting just one critical factor. for afib patients well managed on warfarin, there is limited information on how xarelto® compares in reducing the risk of stroke. don't stop taking xarelto® without talking to your doctor, as this may increase your risk of stroke. while taking, you may bruise more easily, or take longer for bleeding to stop. xarelto® can cause serious, and in rare cases, fatal bleeding. it may increase your risk of bleeding if you take certain medicines. get help right away for unexpected bleeding or unusual bruising. do not take xarelto® if you have an artificial heart valve or abnormal bleeding. before starting, tell your doctor about all planned medical or dental procedures and any kidney or liver problems. learn all you can to help protect yourself from a stroke. talk to your doctor about xarelto®.
neil: on this very historic day. we're down about 57 points here for the dow. a lot of attention, keep this tension going. investigation of the president's associates, and bob mueller, who is, end we have no idea. we call out these factors. we think it will affect things in the long term. but in the long term all that comes and goes. the opportunity does not. cheryl casone right now to take you through the next hour. cheryl: well-said, mr. cavuto. thank you very much. we have breaking news right now. we're seconds away from the release of the minutes from the federal reserve's last meeting
as we enter the longest bull market run ever. i'm cheryl casone in for trish regan. welcome to "the intelligence report. we'll wait for a white house briefing and we'll bring that to you when it begins. let's go to the federal reserve minutes. let let's go to jennifer schoenberger. >> minutes from the federal reserves policy meeting earlier this month, showed, cheryl, the economic data comes in as expected, fed officials say it will soon be appropriate to take another step and removing accommodation. officials harping on strong consumer spending, strong business investment, and strengthening in the job market as they paint a picture of a strong economy. however they do expect economic growth to slow down a bit in the second half of the year from that torrid pace of 4.1% in the, though they do expect growth to remain above trend. now on inflation t