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

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charles: susan, jared, thank you both very, very much. dow jones industrial average, off 638 points. we started off 654 points. we are all over the place, liz. eventful last hour for sure. liz: normally when we say we are 250 points off the low of the session, that would be awesome, right? yeah. not so when you're 250 points off a low of losses of 800 points, that's our breaking news. it still only brings us slightly off the floor. we have the dow jones industrials down 642 points. the dow had tanked 804 points in the last hour and about 20 minutes. look at the nasdaq, down a full three percentage points, down 224 points. s&p 500, that number there, 2718, is now below the 200-day moving average, that key floor there. all three indices trembling but it's the ominous sign rearing its ugly head in the bond
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market, paired with a laundry list of disturbing headlines popping up around the globe that have sent the bulls ducking for cover in this final hour. investors in a frenzy not only about the inversion of yield curves which often precede recession, but about the increasingly vague trade truce between president trump and china that was forged at the g20. was it truly all it was built out to be, and then around noon, secretary of state mike pompeo accused russia of cheating on the nuclear arms treaty with the u.s. pompeo ordering russia to admit it and fix it within the next 60 days. around the same time, british prime minister theresa may lost a critical vote after a british judge ruled parliament can cancel brexit without her approval. but it is mounting skepticism about the trump trade truce that's likely one of the biggest drivers here. blake burman live at the white house, talking to sources there. he's going to join us with the latest on what he knows. we are also going to try to clear the air with at least some of the fog moving out.
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two exclusive interviews with diverse opinions. sun microsystems cofounder, big wig in silicon valley, on china's role in meeting trump's terms. and we have td ameritrade's ceo on today's market meltdown in response. right now let me get to it. the s&p 500 is on pace for its biggest one-day percentage drop in six weeks, erasing all of monday's gains. if you're looking for the silver lining, we are off session lows. at one point the s&p was down 88 points. now, down 74. so see what i'm saying? we are really trying to come back but not by much here at the moment. let me show you the russell, the small and midcaps. it's one of the biggest percentage decliners among the major averages, down 3.66%. russell down 56 points and i'm telling you, at its lowest point it really was a very ugly picture. much worse than this. that means there's very little place to hide here. take a look at the transports.
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by far, this is going to be the biggest headline. the transports on pace for their biggest one-day point decline ever. currently we do have the dow transports down 459 points. i have been doing this a long time. charles payne has been doing this a long time. all of us have. i don't recall seeing a drop in the last 15 years, so i started in business 20 years ago. what do we have here, the transports down 457. that means airlines, choo-choos, fed ex, ups, all getting hammered. the volatility index, no surprise, up 23.5%. this is now above 20 which means it's at 20.30. that's above its historical average, hitting its highest level in six months. where is the safety? the flight to safety for traders, bring your attention to the u.s. treasury markets. prices on treasuries are going up, yields move in the opposite direction and they are
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plummeting. it's a pretty much free-fall starting from about a day ago, but it really started to accelerate starting overnight here. the ten-year yield at 2.93%. on friday, we were at 3%. now we're at 2.93%. you see that kind of decent basis point fall is rather significant. that's below its 200-day moving average. currently the ten-year yield right now stands at 2.93%. we will keep an eye on that but i need to move you to the 30-year yield, the long bond. my sources are telling me the long bond is seeing massive buying, so its yield is falling, down nine basis points at the moment to 3.18%. so getting closer and closer to that ten-year. while most people are watching the spread between the two and the ten-year treasuries, look at the spread between the two and the five-year notes. it inverted or went negative yesterday. first time we have seen an inversion of the yield curve in 11 years. so 2007. as bond yields slide, bank
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stocks are getting pummeled here. look at the big names here. goldman sachs down 3.66%. jpmorgan chase, citigroup, wells fargo. can we flip to regionals? they have dipped into correction territory. key corp, sun trust, fifth third bank, regents financial. key corp out of cleveland, we are looking at those names, they are having a difficult time. i want to quickly look at them at the moment, to give you guys a sense of what's going on. it is down about 5%. u.s. dollar extending losses against several major currencies, except for the japanese yen. we do have it stronger at the moment. worries over u.s. economic environment heading into the new year so we do have the dollar right now at about $1.13. the euro is in real trouble, obviously, because we are watching the brexit headlines. while trade and tariff talks with china are under way, dollar
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general gives you a sense of how the trade situation is affecting individual names. first, it cut its full year profit and sales forecast. then it specifically warned that the proposed tariffs on chinese imports that would affect them much more if they really kick in, will begin to have a greater impact on dollar general's business. during this earnings call this morning, the chief financial officer john garrett said the dollar store chain moving on production, trying to get it out of china to other countries so that it doesn't have that exposure. we have that stock down 7.66%. at its low it was down nearly 8%. garrett then went on to say in order to mitigate the tariff impact, the company's working on moving manufacturing and re-engineering products for finding new products away from china. with the dow jones industrials down 675 points, the trade truce details are continuing to rattle markets.
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president trump jumped into the fray by giving himself a new moniker. he called jkim jong-un. now he gave himself a name. he renewed his threat to impose tariffs, tweeting president xi and i want this deal to happen and it probably will, but if not, remember i am a tariff man. when people or countries come in to raid the great wealth of our nation, i want them to pay for the privilege of doing so. it will always be the best way to max out our economic power. we are right now taking in billions in tariffs. make america rich again. let us just clarify here at fox business, folks. it is american businesses who are paying those billions in tariffs that the president imposed on chinese imports. it's not the chinese paying the tariffs. it's american businesses. but the stage was perhaps set for this market selloff kind of by committee. confusion in messaging by various members of the administration beginning this morning. treasury secretary steve mnuchin kind of kept things nebulous on
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fox business when he used the word "if" while telling maria the chinese will buy $1.2 trillion worth of u.s. agricultural products. listen. >> and if that's real and again, we have to have a negotiated agreement and have this on paper, but if that's real, that will close the trade deficit, and it will be the structural changes that lead to u.s. companies being able to compete fairly in what's a growing china middle class. liz: if they are real. so the white house and blake burman, plummeting treasury yields aside, if the administration cognizant of and working on clearing up the confusion, what are you hearing at 3:08 p.m. eastern time right now? reporter: the white house had to clear up another issue today as well, liz. there was some clarification as it relates to this 90-day window, when it starts. remember, there was larry kudlow who came out yesterday and said this 90-day negotiating window between the u.s. and china begins january 1st. now we are finding that is not the case. this 90-day window began saturday night when president trump and president xi sat down
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for that dinner at the g20 in buenos aries, argentina. seemed like an honest mistake from the president's top economic adviser but a clarification at that on this day. the markets obviously did not like the president's tariff man tweet which you just read earlier today, but there also seems to be the mindset and the belief that is starting to set in that top administration officials are starting to talk about this deal down the line. you just played some of the sound from steve mnuchin, treasury secretary, in terms of if and in terms of when, we heard that not only from mnuchin today but from kudlow as well. listen here. >> we have a lot of work to do, but i think this is the first time you've had a direct agreement between the two presidents. >> we have much work to do but again, i want to play this -- look, we have to, and bob lighthizer is the best guy in the business for this. we have to make sure there is enforcement on any so-called
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agreement. reporter: then you have peter navarro, one of the president's top trade advisers, of course, who wrote the book "death by china" who said today, telling charles payne last hour, that he is bullish coming out of saturday night's dinner. navarro also told charles that the whole tariff man tweet was an homage from president trump to the old president, william mckinley, and navarro told charles that the treasury has collected some $7 billion already because of those tariffs. >> i think we've collected $7 billion so far which is -- i think that's real money at this point, and i think what's important here is the function of these tariffs, when the president says he's a tariff man, he also understands one of the most important functions of these tariffs is to make sure that people invest within our borders. reporter: of course, the critics will note that tariff, the tariff money, gets passed on to
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consumers. liz? liz: thank you. please keep clarifying as you get every single new detail, blake. thank you. folks, i want you to guide your eye to the right hand part of the screen. dow is down 683 points. looks like we are heading back down. just a moment ago we were down 700 points. we will watch this every second for you and you know, considering the selloff that you see on the screen here, the french bank's timing pretty stunning on a certain call. the bank coming out with this bearish call this morning, saying quote, the longest bull run in u.s. history is on its last legs, saying that quote, a deep and prolonged correction is coming. but does today's selloff really mark the end and why should investors believe this one, when all the way back in january, goldman sachs says it sees quote, high probability of a market correction in the coming months? okay, coming months, 11 months, long time. then a year ago, november, bank of america merrill lynch said it sees an end of the bull market coming.
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john corpina and our traders, john, i will start with you, what do you see now that gives that call any validity? >> i don't see it. i think when you look at the market and the way trading activity has been for the last two years, the only call that they can make is that there is going to be a correction. yes, they will be right at some point but the economic data that we have now and the trading patterns and activity we see are not calling for that. we came in from sunday to monday, s&p futures were up 50, market was indicated up 600 points. we're just seeing these large swings. it does show me that the market is certainly fragile. it's really listening to headlines, very focused on tariffs and any comment, any tweet, any conversation that comes out related to tariffs, the market is really going to start swinging from that. we are in no different position today than we were on friday. liz: phil, you got to give me a sense of what's happening on the floor at the cme. what is the feel on behalf of the traders?
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you know, people's eyes start to blink a lot when they see a loss of 704 points right now on the dow but look at the s&p, down 78. >> yeah. it's dramatic but the guys on the floor are getting used to this. we have seen some pretty wild swings over the last couple of months, and when you see a big selloff like this, it's like all right, see what we'll do tomorrow. we had a huge rally yesterday. everybody wanted to buy everything and you know, one tweet later, we are back down. you know, listen, we have to put all of this in perspective. the market, you can tell, so badly wants to get a deal with china that the first sign that there could be some progress, the market rejoiced. but i think donald trump is coming back saying listen, this is going to be a tough negotiation. i think larry kudlow is coming out saying yeah, we want a deal but trust but verify. we just don't want to make some kind of paper deal, find out three months from now or a year from now that we have been taken
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advantage of. and i think also, too, we are going to have -- a day of sympathy tomorrow for president bush, we will not be trading tomorrow so that could be adding to the volatility we are seeing today. liz: larry, i tend to agree on certain levels with john and phil but i do have to say this about the trade situation. trust and verify, absolutely. we know the chinese have made promises in the past but it's been radio silence since sunday from the chinese. the commerce ministry and foreign ministry keep referring reporters to each other's ministries and they're quiet. they are mute. i'm not surprised to see this. but there are other stock stories that aren't helping the picture. i'm surprised, i don't know if we can get the home builders up. toll had a bad story. i want to let people know that toll had the first fall in quarterly orders in four years. we've got yields falling now. the 30-year mortgage rate fixed
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is probably falling at the moment. that should be positive for the home builders. >> you would think so. keep in mind, with rates, we are basically going back, at least the long end, ten year, 30 years, going back to where they were in september before they made that pop over 3%. with that in mind there are so many vagaries going on. in my view, trade has gone from no one cared about it to all of a sudden, it can't get worse. i think no news is bad news to everybody. the bottom line is, the u.s. equity market is no longer decoupled from the global equity market. with that view, there's a lot of incentive for a compromise to be made. with the fed, you would think the fed's being run by a bunch of aunts and uncles who will continue to hike rates until something breaks. they are concerned about global growth and market imbalances. you get it.
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don't worry, it's going to be okay. liz: all right. aunt sponge and uncle spike are at the fed. thanks to our traders. how does the ceo of a company who watches every tick of both treasury yields and the stock market, see what's happening now? the ceo of td ameritrade next. you're headed down the highway when the guy in front slams on his brakes out of nowhere. you do, too, but not in time. hey, no big deal. you've got a good record and liberty mutual won't hold a grudge by raising your rates over one mistake. you hear that, karen? liberty mutual doesn't hold grudges. how mature of them! for drivers with accident forgiveness, liberty mutual won't raise their rates because of their first accident. liberty mutual insurance. liberty. liberty. liberty. liberty. ♪
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liz: okay. the dow is down 710 points right now, and some of it has to do with some questions and confusion about this trade deal, this trade truce, but there is a little bit of clarity on at least one point. china is apparently following through on at least one of the pledges that it made at the g20 dinner where president trump and president xi jinping broke bread, and this is a big one. according to a government document released by china, a few dozen punishments will be meted out for intellectual property theft. this matters to president trump a lot. among them, violators would be banned from issuing bonds or other financing tools. they would also be restricted from government financial support, foreign trade, registering new companies or auctioning land. that's not all. the chinese government said it would post violators' names to its website. little public shaming there.
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scott mcnealy, founder of sun microsystems. you have done enough business with china, in china. do you believe the chinese on this and will it stop the chinese from stealing u.s. companies' proprietary ideas and technology? >> it might slow them down for a little bit, but i really think they want to see if they can outlast, i mean, what i would guess they are probably doing is they will try and outlast the trump administration, then go back to their old ways. there's no question, you know, in an economic war, they are operating under very, very different rules of engagement than we are. it's not fair engagement. and it made sense as china was developing and evolving all the rest of it. over the past 20 years, i don't know one ceo who isn't frustrated by both arms tied behind their back as they head into the chinese market. over the last 20 years, we have been trying to normalize the rules of engagement.
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they don't want it to happen, we do. they have been kind of grin hugging us all the way along, and now trump is actually the first one to step in and be serious about this. you may not like his style, it may not provide for face-saving and the chinese government has some very, very delicate challenges they have to meet their 7% gdp growth goals and all the rest. they are the second largest i think economy in the world now if i'm not mistaken. liz: they sure are. >> treating them like an underdeveloped, you know, third world nation isn't necessarily the fair and appropriate thing to do. liz: on that point, what do you mean by that? everybody has given the chinese break after break and finally, president trump came in and was really only responding to demands and complaints by the business community here in the u.s. he didn't have problems with the chinese. he's done great business with
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the chinese on his products, and ivanka had products there. he looked at this and said okay, let me try and fix this, and they weren't doing anything until he came in. so i guess the experiences that you've had with the chinese, what was maybe among the worst and how do you fix something like that? >> well, at this point, i do a lot of advising to companies, small and emerging and growing companies. don't even bother, go elsewhere. it's just too hard. or they'll just, you know, take your technology, run with it and outdo you. so it's very, very different than, say, 35, 40 years ago. 1982, when we started and got into china, we helped build the chinese internet. now it's a very, very difficult market to crack. ask twitter and facebook. there's a lot of -- you have to be a joint venture. we don't force people to be a joint venture to do business here across the board. it becomes very, very -- very complicated. the barriers are not just ip
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stealing, there's just not tariffs but there's also big rules about how you can play there. the rules of engagement are just not the same. i believe it is time we start trying to level that and make it fair and even, and the right way to do it is for them to eliminate their barriers, tariffs, all the rest of it. if they won't, you got to do something. we would love to do it in a nice calm face-saving way but it hasn't been working. liz: well, there is one thing that's moving slightly higher right now and it's bitcoin, up about 42 bucks. you are an adviser, as you said, but to crypto miners, as you look at bitcoin falling, it had been at $19,000 per bitcoin, today, $3,904. at what point does it fall so low that the cost of mining it is more than the actual cost of a bitcoin, and where do we go from there? >> well, unfortunately, i think the real challenge for crypto
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currencies is that sovereign governments don't want this to happen. they don't want people dealing in a currency that they can't manage and do what do you call, quantitative easing and deficit spending where they can devalue it and tax all of the players in that space so that they can buy votes to stay in power. there's going to be a huge battle, not a technical issue but rather, a policy issue about whether governments want to give that up. liz: scott, we have got to run. thank you for your perspective. he built out the chinese internet and says it's really closed now. great perspective. dow down 737. we'll be right back.
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liz: well, stocks are rolling over and as we look at all the major indices, we do have the dow heading back down, closer to session lows. remember, i need you to remember the session low, down more than
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800 points. now we are down 742. the s&p is losing 84 points. nasdaq, as i said, this is a rollover, down 3.5% or 266 points. it's the transports that are having their worst percentage loss in history so in a single day, this is a tough day for them. still some green on the screen. to gerri willis live on the floor of the new york stock exchange. save us. gerri: it's hard to say when 26 of the dow components are down and only four are higher. let's talk about some of the laggards with the dow down 751 points. caterpillar, a company with a lot of sales in china. that company down on this trade talk we have been talking about all hour. jpmorgan chase, the financials lag here. apple, bad news on apple today, as the stock was written about by a wall street analyst negatively, and boeing down. any company, basic materials, financials, industrial, technology, all those stocks sold off today. nowhere to run, nowhere to hide for investors.
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let me add, there were a handful, short handful of winners. procter & gamble, j & j, mcdonald's. you see companies that have a broad consumer base, lots of business here in the u.s. these are consumer non-cyclicals with j & j doing well but it's not a long list. back to you. liz: yeah, sure. it's a compressed list. gerri, thank you very much. i want to reset this for a second. we have 29 minutes before the closing bell rings, and we do have us now down 723 points. president trump not shy about taking on fed chair jay powell. we are going to talk about that, because right now, another hike is starting to look a little squishy because the markets are very, very disconcerting. we are going to bring in, in a fox business exclusive, a man, a ceo who watches every tick of the markets incredibly carefully for his 11 million customers.
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liz: breaking news. we are watching the markets incredibly closely. it is a rough, jittery day. how jittery? look on your screen. this is the volatility index, the fear index. super red-hot. it is climbing. 24.66%. as we look at the volatility index intraday, you can see it was kind of fine in the morning, and certainly calm yesterday, but the spike began on a couple of things. stocks started to fall on the confusion about whether the trade truce really is clear and set, and also, how the bond market was behaving in a very
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bizarre way. we bring in our next guest, who knows all things bonds and stocks. top financial ceo with more than 35 years experience in the financial sector, 11 million clients, trillions in assets, he places stock orders super quickly. we welcome td ameritrade ceo tim hockey in a fox business exclusive. how many people are -- i'm sure you are getting updates as we speak. >> it's a big day. liz: what are they doing, panic or calm? >> no, i don't think it's panic. if you notice the vix actually spiked later on in the day. it was a relatively slow start. we will probably do about a million trades today, which is a big number. liz: what's your record? >> our record is about one and a half. and average, i would say this past year was call it 750 to 850, around there. it's a big day but not a crazy day. liz: there's a head line. you will do about a million trades today alone. >> yeah, but tomorrow the markets are closed so it will be zero. it averages out to half a million. the vix, on the other hand, i
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always smile when i see this and you're right, the climb in the intraday was a big spike, but 20 is the long-term average. so we have just become used to a relatively low, in fact, ultra low, you could argue, vix level over the last few years. it's only recently now that we started to see it get up to even average for the long term. liz: you have 11 million clients. i'm sure, let's just say a good one-third of them even, if they are very concerned about what they're seeing with the dow down 740 points, all major indices selling off, you as the ceo are watching in two different ways. one is the ceo of a publicly traded company that likes higher rates, i would imagine. joe mogley, all the previous ceos, they sat here and said we like higher, obviously, because then you get to be able to bring in more money with the money that's parked there. but as you look at this yield curve, the inversion between the two and the five, sometimes in the past that has signified a
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recession is coming. is it? >> well, depending on who you listen to. as you know, it's a very good indicator, it's not a perfect indicator. but i think the difference between when it inverts and when you actually get the recession is interesting to know. it actually ends up being on average almost two years. so from the point of inversion to the actual peak in call it the markets, could be on average over the last 20 or 30 years, a couple of years. liz: inversion between the three and the five -- >> five or two and ten. liz: does one have more weight than the other? everybody talks about the two and the ten. >> that, i couldn't tell you. i think that fact, i think it relates to the two and ten so you could argue maybe we're not even there yet. point is, it's been this inexorable slide over the last little while. liz: we might have two years, everybody. looking at the stock market now, flip it over to equities, are you hearing from a lot of clients right now? >> sure. remember, we have two businesses. the way to think of it is we have our retail business, 11
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million clients that are actively empowered, thinking about their own trading and making their own choices. they actually see these types of opportunities because they are quite savvy investors and actually buy into the dips. we often see net buyiehavior in buying on days like this. the clients that actually work for the rias look at these types of days and actually say oh, i'm a little more nervous because they tend to want to work with an adviser, so they might not be as savvy about markets up and downs. our retail investors actually enjoy this. liz: okay. >> they don't enjoy -- they enjoy when they have days like yesterday. liz: a little heartburn right now. tell me as we're looking at the nasdaq down triple digits, this is a pretty significant move, i think i know the answer to this next question but i want to hear it from you. what matters more, what should matter more to all of your customers, the trade situation and the confusion there, or what the fed does?
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>> by far, the fed decision in the long term is way more important to the fundamental drivers of the economy. the reason why we're seeing so much up and down activity, notably around the trade file, is because it can go from everything's all clear to the next instant, a tweet comes out and maybe it's not clear. so global trade is a hugely important issue to the economy. but the intraday volatility you're getting based on a shift in mood or a meeting is way less important than the direction of interest rates over the long term. liz: where do you see them in the long term? >> the question is, they have been going up. the question is how much more can they go up. liz: well, with this and the concerns about trade, the slowdown in housing, gdp is slowing down -- >> record low unemployment rate. liz: okay. that is the good part. >> again, you have to think about, it's certainly nice to have record low unemployment
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rates but the question for the economy in the future is how much further can they go. there's just not a lot of upside to have even more and greater unemployment -- liz: also a worker shortage, too. >> that drives wage pressure, which drives inflation, which drives interest rates to counter. so when you get to these levels, you are seeing what you would expect to see after about ten years, which is we're getting to that frothy end of the cycle. liz: is it a mistake for the fed to raise in the next couple of days, it's got a meeting? >> not my job to -- they have much more view into the crystal ball, but i would think they have been prudent in raising appropriately, and these intraday fear, greed shifts, depending on how many news items come out on the day, shouldn't impact the patient. they should be focused on the multitude of data they have available to them. liz: as busy a day as it is, with your 11 million clients, did you think about canceling with us? >> no. liz: no way, right? >> no. my team is more than capable of
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handling the volume and they are doing a great job and standing by our clients and lots of opportunities. happy to be here. liz: that's what we really needed to hear. thank you so much. tim hockey is the ceo of td ameritrade. thank you. please come again. >> i will. liz: busy day for his company. busy day for the entire stock market. we have some major turbulence in this final 17 minutes of trade. charlie, you have been up in the newsroom. what are your sources saying about a very mercurial market, huge swings, mostly to the downside here? >> lot of factors here. it's not just one thing. we should point out at the top, when i'm asking about major concerns from investors, it's tariffs and a trade war. donald trump came out yesterday and said there might be a deal with president xi on china tariffs. they essentially put a hold on any sort of trade war, tariff war. today, he came out and said maybe not so fast, there's not really a deal in place. guess what? i'm not just -- i may not just threaten tariffs, i am the tariff man. he called himself the tariff
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man. i tell you, the markets, once he made that statement, went down precipitously. i think the big issue here with trade is, and i'm getting this from pretty senior wall street executives, people with money in the market, they are perplexed essentially by the direction of trump trade policy. is it a more free market policy where, you know, speaking softly, carrying a big stick or speaking loudly and carrying a smaller stick, or are we threatening to get the best deal possible, or are we really going to do this, is it peter navarro, the trade hawk, who is pushing trump to basically go into a trade war with china? peter has been very clear what he wants to do in terms of combatting chinese protectionism and theft of intellectual property rights, or is it larry kudlow who is looking for a much more conservative response, something that maybe focuses on the intellectual property rights but doesn't go into a tit for tat trade war with china which a lot of people think would be bad
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for stocks, for the economy and hence, you got a 700 point decline. it's one other thing that's really interesting here. larry mcdonald, you know larry, good bond market expert, we have a flattening of the yield curve, right, we are having a flattening of the yield curve not necessarily because short-term rates are going up. that's usually good, because it shows that the fed's raising rates essentially to cool down a very overheated economy. what we're seeing now, that was a couple months ago. what we're seeing right now is a flattening of the yield curve because of the long end. people are buying treasuries. why do you buy treasuries? well, guess what happens when you buy treasuries. lot of people are pricing in a global recession so there's a flight to quality. liz: hold on, charlie. >> it's a different type of flattening of the yield curve than we've had in the past. liz: we are just hitting session lows for the s&p, down about 90 points, 9-0. we just had tim hockey here of td ameritrade. he struck a very calm note,
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listen, as you want leaders, and business leaders to strike, but as we see this happening, we've got to start hearing about some funds maybe really struggling, some hedge funds -- >> remember, we had a 600-point -- that's a great point, that when markets get incredibly turbulent, hedge funds start to implode. i think we don't -- we're not there at the panic button just yet. we may be soon, but here's what i would say. remember, the markets have been dealing with trump trade policy literally from the minute the tax cuts were passed, he started going very protectionist. so it's kind of like in the ether. not like this is catching anybody by surprise. the s&p and dow, got to check these numbers out, have been essentially flat since the tax cuts got passed, because trump sort of shifted to a much more aggressive tone on trade policy. i will say this, though. here's the sort of thing that's kind of interesting here. the flattening of the yield curve, bond prices on the long
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end are going up, hence the yields are going down. they are flattened. that's the flattening that's occurring, not the flattening where the yield curve on the short end goes up, which essentially means that the fed's tightening to stop an overheated economy. what this flattening means is that people are flying -- people are buying treasury bonds, right, prices go up, yields go down. they are doing that as a flight to quality. that's a big difference than you had in the past. larry brought this up and he's absolutely right. it's a much more scary scenario. now, that doesn't mean it's going to happen. i am telling you that, you know, today, that is the story. people are worried about a global recession and hence, you get that both in the yield curve and stocks trading off at the same time that president trump is threatening morte tariffs. sort of bad thing for this economy. the worst of both worlds would be a global slowdown, a u.s. economic slowdown because we have gone through our stimulus,
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and then on top of that, a trade war with china. remember, it's one thing to go after them on intellectual property. they have a huge economy. that's why a lot of our businesses were very lax in terms of intellectual property and dealing with them in the past. they wanted access. there will be, even if we get tough on china, which everybody knows we have to get tough in some respects, there will be an economic casualty or cost for that, and that's being priced in the market. that's the debate the market is having right now. doesn't mean it will happen, but there's clearly that debate. i'll tell you, the treasury yields on the long term, pretty scary because then you start talking -- we're talking recession if you buy the long bond at these levels. liz: charlie, the bear claws are out. dow is down 767 points so we are about 63 points away from going below dow 25,000. if you could stay in the chair, i want to bring in our traders. tim anderson, phil flynn back at
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the cme, alan nuckman at the cme. alan, let me bring in your voice. what are you seeing that would indicate that maybe the selloff, you always say the rally has legs. does the selloff have longer legs that follow through on thursday, or will the pause tomorrow during the ceremony for the funeral of president bush 41, will that sort of give a pause for a brief reprieve? >> if it's up to me, i think we're going to get a reprieve, i really do. i'm looking at some of the order imbalances that are coming in. we are seeing as many buy side orders coming in as sell side orders, and you know, when we talk about the flight to quality in the bond, we are seeing the long part of the yield curve move up but part of that is from long-term imbalances. we have seen the long end of the yield curve be low for a long period of time and as far as the flight to quality, we are seeing some of that today, but it's not like a big surge for one day. usually you will see that on the
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day if the market's really going to crash, you will see that really accelerate. it is something we have to really watch when we look at the long end of the yield curve but i'm not seeing the typical type of fear going to some of the other commodity markets. for example, we are seeing a little bit of a rally in the gold and silver. liz: tiny. >> oil prices, you know, they are like hey, what slowdown are you talking about, oil prices are actually higher for most of the day. so it does seem to be more of a stock-based, fear-based rally right now. yes, they have a lot to be afraid of. i think a lot of people were disappointed we're not hearing from the chinese. you know, hey, the chinese say we are going to buy a million beans tomorrow, i don't think so. liz: soybeans are up. lot of people are disappointed we didn't hear from alan. he was like hey. you know phil is like secretariat right out of the gate. now, tell us what you are seeing and what you feel might happen as we spin it forward to thursday, the next date where we
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will see trade open again here in the u.s. >> well, i'm definitely not ready to panic. we are looking at a 3% selloff today and it's after a big, big bounce that we have seen over the last couple weeks. we have seen it time and time again where you get this move forward and a step backwards. so this is typical. if we look at the fear factor, we are sitting at the 20 level on the vix which is a halfway point of these recent lows up to that high. we have seen a series of lower highs in volatility and a series of higher lows in the stock market. now, i know we have had this discussion about rates before, where if you remember a few months ago, what was our big worry, that rates were moving up too fast. now we're worried rates are moving down too fast. can't have it both ways. you can't be worried about everything. so you know, it's a bit of a pause in the market, and i think it's profit taking after the big week that we had last week. liz: we're all very spoiled. alan just made that point. it's sort of what have you done for me lately, and lately was
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ten minutes ago. but we are looking at a loss now going back down close to 800 points on the dow jones industrials. we've got nine minutes left, eight minutes left of trade. is there anything an investor should know or should do? >> you know, it's very likely we will have a 90% down volume day. now, if that had happened after a series of other down days, people might view that as a capitulation day. i'm not completely convinced that's what we've got going on right now because of volume, it isn't nearly as high as i would like to see to term it real capitulation. but i'm certainly going to be watching the internals at the end of the day after everything washes out, and to see where we are on some of the market closes. again, we had a very sharp move over the last six days. we were up 6% in six days on the s&p, we were up almost 7.75% on the nasdaq in the last eight
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trading days. we are giving up about half of each of that today. but there's a little bit too much hysteria for me right now. liz: tom is in the chair and i really want to talk to you, young man. i was reading your report this morning, the sevens report, and this was the quote. i expect a fairly quiet day, even as the spread between the two years and the ten years has compressed overnight. what were you thinking? we now have anything but a quiet day. the decibels are charging higher. >> that's exactly right. what i was referencing, though, is something i haven't heard all the guests talking about. it was touched on for a second. look, this is a weird day because we have tomorrow off. attendance, liquidity, way down. this is a perfect time for the algos and the volatility funds to run the market. that's what we're seeing happen. look, fundamentally, liz, things
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have gotten better over the past two weeks for this market. as we know, everything's about risk/reward. the risk end of this market has actually declined over the medium term because the fed's getting dovish and we have some trade clarity. it's not a solution, but it's improved clarity. a lot of this, i think, is funds, high frequency guys underneath the surface fundamentals have gotten better. it's important to remember. liz: i don't see any clarity when it comes to the trade truce, at least, mark esposito, from the standpoint of all the administration members getting on the same page. i think they are working it out as we speak, but part of that nebulous messages what was struck the markets this morning, i think. are you making any moves? are you buying anything? things are a lot cheaper right now. >> yeah, hi, liz. i think this is a great buying opportunity in the short term. i think tom's right. i think the market is robotic in nature and the machines do run it. so you're seeing an oversold
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market here that's probably not where it should be when we reopen on thursday. i think you will see, you know, the market go up on thursday. this is definitely way too much being down 3% or 4%. there's just not enough fundamental news for that to take place. liz: charlie, i think it's really important that the administration figures out a very clear message here, but part of the problem is the chinese. we are not getting anything from them right now. they have gone radio silent. what does that mean for investors? >> you don't expect the chinese to help us out of this market. i will say this. if anybody thinks there's clarity in trade policy, they're crazy. that's one thing we don't know. there is no clarity in trade policy. you have essentially, think of it this way. if you are an investor, forget about what's going to happen on thursday, because that's one day. liz: down 800 for the dow. down 804. i want to let our viewers know that. >> the next couple months and maybe the next year, what do you
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have to worry about as an investor? that we turn increasingly protectionist as the global economy weakens. there's a good chance the global economy's going to weaken. there is a good chance we are going to turn protectionist. why is that? because donald trump actually believes in what peter navarro says as opposed to what larry kudlow says. and you know, will he, can i guarantee he's going to slap lots of tariffs on chinese goods and everybody else? i can't guarantee that. i'm just saying it is more than just something that, you know, it should go in one ear and out the other and let's be all hunky-dory because the market is less risky because the fed is not going to raise rates as much as they were in the past. i mean, one other thing to look at, liz, is it possible that the fed underestimate -- overestimated how strong the u.s. economy was when it was raising rates in the past? liz: yeah. well, they were late on that. phil, i want to get phil flynn's voice in here. the fed was late on raising. they should have been doing this more than a year and a half ago,
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two years ago. they dragged their feet, they were concerned. there's always going to be a headline but now there are a lot of headlines. the dow is heading -- yeah, there we are, session lows. now we are going even lower. the dow is down 811 points. it is a very rough day for all major indices. phil? >> it is a rough day here. you know, as i look at the traders here, though, they are taking it orders are coming in here. it seems to be fading on itself is as we get to the end of the stay. we are not seeing normal type volume with real panic selloff. china is going to be quiet on trade. they're going to be supposedly the biggest buyers of u.s. grain and all these commodities. they can't come out and you know, really forward to the market, hey, we'll come in here to buy a lot of grains. otherwise they are rising, causing the prices to go limit up before they come in and buy. we have to look at from traders on the floor.
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they will look at export sales numbers, to see if there are big buyers coming in next couple weeks. we'll get a sign if really the trade war going in the right direction. liz: our job is to let me people know as data come in, the vix is higher, volatility is coming in. apple down 4 1/2%. apple's market cap was above a trillion, it is now 837 billion. gerri willis you have other stats. to -- go. liz: gerri. >> look at lows of the session, popped back to 792 on the dow. we look at stocks that led the market lower. financials, semiconductors. nowhere to run, nowhere to hide today. we're looking at tech titans. amazon down 5.6%. apple down.
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there was news that it was being downgraded by wall street, seen the top and peak of their sales on handsets bad news for apple. it is about china trade and concerns what will happen with that liz, back to you. liz: tom, i would like to look at if we can, utilities. gold isn't doing much at all, up about four bucks. three out of five of major utilities, duke, american electric power, edison are moving slightly higher. you could call that flat. give us a sense, tom, what the first line of your sevens report will be tomorrow morning? >> relax. that is what it is going to say. it will say relax. today was a nasty day. it is sort of a messed up week because of the national day of morning. one point on trade. there isn't clarity but improved clarity. we know tariffs won't go to 25% on jan 1 be that is the first step. liz: thanks to tom and mark.
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whole trader team and charlie gasparino all our ceos. [closing bell rings] closing just off session lows. a very rough session with crosscurrents ranging from the bond market and yields dropping to concerns about clarity on trade. that will do it for "the claman countdown". "after the bell" has more. cheryl: session lows, liz. we're looking at major sell-off on wall street. stocks plunging on fears of slowing economic growth. of course skepticism of that trade truce with china. a lot of rhetoric adding to the nervousness today. the dow ending down at this point, we're down 786. give it a couple minutes. near session lows. we were down over 800 points for the dow. s&p 500 and tech-heavy nasdaq both closing down more than 3%. what a day. i'm cheryl casone i'm in for melissa francis. i pick ad day to be here. connell: what a day to stop


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