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tv   Making Money With Charles Payne  FOX Business  November 30, 2021 2:00pm-3:00pm EST

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bill de blasio is only a few weeks more being mayor of new york, a city where he hiked local taxes. to those crappy rich are up in taxes, they don't and won't. the fact is, they are the. just me. [laughter] now, charles payne. >> great seeing you. i don't if i will blame the market on you but it's great anyway. [laughter] >> good afternoon, i am charles payne. breaking right now, jay powell setting the market into a freefall after purchases, this will probably happen in a couple of months, faster than anyone thought. just as the market was climbing off the canvas from continued confusion over how we should worry about the new covid
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variant. he slipped the scripts or should you flip your portfolio? i got the right substitute help you. meanwhile, welcome, millennial's and gently. decades of low inflation, your generation has to deal with the cost of them off. i will shall share my thoughts on how the money is in rising inflation. secretary yellen making comments i take serious issue with including the true cost of build back better. there's a ton of stuff to come through over the next hour, sit back, take notes but more important, don't panic. all of that and so much more on making money. ♪♪ the market likes to climb a wall of worry but i'm not so sure the worry, the market was in fact climbing up. jerome powell shocked everyone
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during his testimony to the senate banking committee. take a listen. >> the economy is very strong and inflationary pressures are high and it's therefore appropriate in my view to consider wrapping up our asset purchases which we announced at the november meeting. perhaps a few months sooner. charles: he said the path that both discuss bond purchases faster at these epic eating upcoming meetings. the fed will get a better sense of the new variant, it's impacting the economy and also a first look at the labor reports and consumer prices can inflation. the comments prove to be a fatal blow, we've seen this rebound right before that and now all of the gains, want to make sure it holds above last friday. let's bring in maryland economist, peter. i've got to tell you, it's strange because it's not a
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surprise the fed was tapering and powell talks about retiring the word transitory more than once the last few times he's spoken so i'm not sure why history is panicking right now, what you think though? here we are, they are going to taper faster than anyone thought although it's a rumor for a while. >> every business student will tell you higher interest rates are bad for stocks which is absurd. even with tapering and fed raising the federal funds next year i have a percentage points, still well below the historic average for the last one or two decades. stocks can private interest rates at three and a half or four and a half%. as a matter of stability the market does this, it panics just like it did friday on any negative news and it's no reason to change your portfolio at this time. charles: what about the bond
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market? the two year yield turning higher even today still trending lower, of course there are signs of economic sounds we were enjoying might be stalling and you think about the different indicators out there, very few back to 2019 levels including things like travel, could we be seeing the economy slowing down dramatically going up in 2022? >> i'm predicting growth slower than any other for next year. we are probably looking at like three and a half% growth next year considering where we are coming from, fact slope. from there, we will taper down the following year but the bad news is, we will have more inflation, something i've been talking about for months next year. around four and a half percent and we are not going to get away from that even with oil prices going down, too many problems are out there but the bond market reflects right now lack
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of confidence lack of confidence shared by the american people. with this administration, with the federal reserve, with janet yellen and mr. powell and their ability to cope and grasp what's wrong with the economy. and the notion you can spend $5 trillion in new social spending and somehow make most infectious with 1.3 trillion in new taxes is absurd. it violates any arithmetic, it's sorcery. the next thing you know, joe biden will have a piece of blood on his desk, national broadcast, throw a curtain down and bingo, up comes gold. houdini there is no confidence in these people. charles: i'm watching today's testimony and janet yellen kept saying build back better program will not add to the national debt and then this.
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take a listen. >> i want to repeat again, go back better is fully paid for and will not add to the debt or deficits. >> you and i don't agree with that. >> cbo agrees with what i said. charles: even with all the ways you can gain cbo and we know that, the cbo if you go to the website and look at the legislation result in a net increase and deficit, they are talking over $300 billion so if we are being honest about what it's really going to cost and from all the shenanigans, how much is it going to cost in your mind? >> $5 trillion and some of that will have to come out of the state so they will have to raise taxes in money so some of it is down to the assumption bike pre-k education the states are going to start picking it up and it will be another medicaid disaster. where the state even
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participate? i always thought pinocchio was a boy but he seems to be working in the treasury these days and has a tough job. i'm just waiting for her nose to grow. it's absolutely absurd. stop shooting at mr. powell, i know it's not chivalrous but i've got to call her, this is absurd going in front of the american people and saying that. like oil production doesn't raise gasoline prices. charles: she said a lot of things i don't think she would have said before going into the administration. acute. i want to bring in our expert today, david and nicole, nicole, the market getting pretty good, how does this bombshell change things? >> i still have the biggest smile on my face from the things peter and his sorcery comments. we aren't all that surprised.
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at some moment, we had to address this is lingering not meeting and inflation is here. it's fun for us to be panicking having driven by uncertainty. we see it as opportunity. we are not changing our forecast going into 2022. we don't think the fed is going to become less cautious suddenly as they look at the global central bank environment so we are still foolish on financial selective energy, pricing for insurance companies. charles: and i want to write that down because those are two areas under particular pressure. i think you might like those as well, david but ironically powell would probably have to start tapering sooner rather than later so he finally admits it and the market tumbles. >> market has a double whammy today.
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we have the federal reserve with jay powell talking about -- in the market spot he was coming and talk about slowing the rate of tapering, increase the rate of tapering and we had the omicron virus creating uncertainty edits those two headline risks creating another sell off the markets today but we look at it as a buying opportunity, not a sign of worse things to come we want coming into the market, one thing i look at our internal, it looks like extraordinary portable 21% and training in the 20 moving average. a month ago 80% i'm looking at this market as a buying opportunity but at the same token, it's been horrific so are there changes you are making, if you're bullish now, you were bullish a month ago, is there something different about the way the market is now? >> we are still biased toward
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gross stocks and we like to make a cap tech. they've become defensive names and. like this, we look at apple, whether tech or retailer that's held up well. friday is positive today, we've been here before on this, just a year end a half ago we were referring to the s&p 500 and the s&p five. there were five stocks, apple, google, amazon, microsoft. those are the stocks that don't have extraordinarily high pes that we can still count on going forward. after that year end a half ago the narrow leadership the market defined for that year end a half so it's about separating nonprofitable tech gross stocks from those that have stable earnings from liquid cash flows and we think will produce good results for investors into 2022. charles: so we both say don't panic although david is more in
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coal and that's why we love them. very much appreciated. crude oil continues to fall that has been buying off. one of the best oil analyst at the coming up. also, another bombshell today, basically admit to tax laws in order to promote a complete government makeover takeover of our tax system and might even violate the constitution. i can't wait to hear what he has to say about it. he's after the break. ♪♪
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's jay powell testifying in
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front of the senate banking committee today where he spoke on inflation and the economy were progressive such as elizabeth taylor openly pushing for a different chair. there's a lot of concern about the institution. i'm going to bring in hilary vaughn live from capitol hill with the latest. reporter: jerome powell said the right part out loud, he admitted
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inflation has been around longer than they anticipated could stick around even longer than they forecasted due to the new covid variant omicron. he said it's possible it could mean inflation is here a lot longer and admitted time to stop using the word transitory to describe inflation and higher prices americans are being hit with everyday. >> i think it's probably a good time to retire that word and tried to explain merely what we mean. you indicated inflation pressures will linger well into next year. do standby that? >> that's our expectation but what happened, it's been pushed out repeatedly as supply-side problems have not improved. >> janet yellin also made the case for her trouble and mom tax saying they need the cash to pay for things like the infrastructure bill and mike president biden build back
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better social spending plan but some set lawmakers scolded her today for thinking show could bypass congress and hike taxes on her own. >> corporations profitable and successful need to pay their fair achieves. from our view. >> i asked you to acknowledge the administration would need to come to the senate for treating approval to and from one. he responded treasury has yet to determine whether a treaty will be needed or not implementing pillar one would require modifications to our existing bilateral tax treaties and the modifications must be approved by two thirds of the senate. >> charles, that is the concern especially from republican lawmakers that putting in place
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tax without going through the constitutional authority through congress violates essentially the constitution and they don't have the right to do that. charles: thank you very much and i have to admit, i had no idea how intrusive this international treaty would be so it is mind-boggling and perhaps the biggest news today, that's the real news. thank you to senator toomey and don promote this pillar one ignores the constitution, the authority of the senate gargantuan undertaking writing brand-new tax laws, reshaping or repealing other tax policies already in place including digital service taxes and that's all we've got to do, we'll pay for everything. your thoughts? >> something for the entire family. this administration and congress is trying to ram through all kinds of things like that.
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every kind. it could not be clearer, article two section two united states constitution says it's a treaty that takes two thirds of the senate, two thirds does not mean 250 plus kamala harris. the build back better act aspirating like it's 1.7 joint and spending such a small number but even that manufactured with artificial sunsets and rises, any realistic assessment at 5 trillion, if all of this is so good, if it's so fair and reasonable as our esteemed treasury secretary would say than why can't they explain honesty of the american people whose congressional budget office the real boat, not reconciliation show in the sunlight, not midnight box here is why. this stuff would not pass with the american people and it's unconstitutional. charles: to me it is interesting because we keep -- i say we, the
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folks in charge now, tries to deconstruct america and make it into something different as if we are not good enough for haven't been and we are ignoring our largest rival. think about how great a week china has had. the world health organization gets excised and they are in line for an experience. oil will help china and potentially china will take ownership at the airport in uganda. why do you think we are falling down like this? why are we giving up? why are we abandoning the greatest country ever for a utopia that won't exist? >> in a weird way, "god bless america" for seeking utopia like we always have. we've always had in american history, religious sects that stop topia. none found it but it's part of the american culture to have the ingredient that strives. but that be part of the mix but
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let it be something we vote on an open and constitutional processes. god help us if we ever fall prey for and being totalitarian dictatorship like china. by the way, i guess my vacation is going to have to be canceled. [laughter] charles: you think so. i've got less than a minute. your thoughts overall, are you panicking yet. >> no. i'm glad you said yet because the day is young but i think this omicron's bancorp create another buying opportunity in the most terrifying thing about it is what might happen when the american president thinks it's omicron, he would think you'd be better than that, but no, he said that four times yesterday. the virus isn't going to kill us, it's our own stupid response that might kill the economy again like last year. charles: at least president biden did say no lockdowns as of
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right now so that as part of the message. great seeing you. coming up from a pre-money created a monster and nobody knows how to kill it. the notion of buying it easy and driving off into the sunset will cause nothing except maybe trillions of dollars more than the administration. we will tell you the truth next. ♪♪ ♪♪
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's
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crude oil lower again today and uncertainty about the covid variance. now perhaps slowing up the u.s. economy, the biden administration continues to pluck the notion of releasing even more oil from the strategic reserves. it's been noted crude and
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gasoline and jet fuel combined, these inventories are extraordinarily low already so where do we go from here? ask tracy, many are saying crude oil will bounce quickly in all of this is said and done so should we take our oil stocks? >> we are over extended care a bit, we have stairs up, elevator down, right? it's a really fast elevator. oil is below $70, it's a great excuse to defend oil production increases, they were kind of on the fence before but the biden release gives them an excuse like they're going head-to-head with the administration. charles: i think in two days, december 2 or something like that so people want to make their move before that. on that note, i thought it was interesting because canada will release 50 million tons of maple syrup from their reserve so what
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will be more impactful? there oil moved by the biden administration? >> and equipment of a day and a half of opec production so i will go with maple syrup. [laughter] charles: here is the thing though, we fought hard in this country for energy independence and investment, who put the time and effort in and the idea of giving up now, energy oil analyst, you understand this and have met these people, what you think we are ready to give all of that up? >> i am very concerned with the policies the administration, every step they create new roadblocks for the industry aside from canceling pipelines, they said with a caveat, it increases the rates great indigestion, they drain spr, they want to drain more with this the infrastructure plan on
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top of already scheduled releases. my fear is they use it as a piggy bank and if for some reason they need it, we will be in big trouble. charles: i saw snow flurries yesterday at my office and it felt like it would be a cold winter. we are seeing reports that cole is going to be greater than ever and there is irony but let's remember cole is one of the best investments of figure, is there a cautionary tale or something we should learn from this? >> we've seen quite a bit of pull back before winter, many are nice technical level, around 200 so i think they are starting to look interesting again and thorough still room for upside. charles: think twice before shutting it all down also? >> absolutely one 100%. the technology isn't available to shut down oil and start
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renewables, we are just not there yet. charles: speaking of technology not ready yet, transportation secretary buttigieg suggesting for families who by electric families will never have to worry about gas prices again. i want to say this ignores, this costs $5 trillion to create and transport energy here, it suggests rural areas that don't have broadband will have a bunch of easy charging stations, your thoughts on this? i know a side note here, lithium is something you've talked about a lot, it's up a lot already, government forced into this but it's not an easy simple solution, is it? >> absolutely not. we are going to need infrastructure build outs, more in the infrastructure plan, we are also going to need a complete overhaul of the electrical grid which is definitely not in any plan.
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this will take a lot more of a transition than most people think it lithium has huge moves this year but i think they are getting frothy at these levels we want so to recap, oil stocks on the dip before the opec meeting, hold off on the lithium for right now. thank you very much. >> thank you. charles: next him a perfect illustration of what i call insidious relationship between price and prices, rising wages accommodation of free money. i will ask david about this and also if there is such a thing as a free lunch. ♪♪
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united states is in a real conundrum, free money. i'm not sure the solution other than a dose of cold turkey after we've hit walls. yesterday's manufacturing survey for november is a perfect illustration of this insidious relationship we've seen between rising prices, rising wages and i don't think it's a phillips curve, higher wages automatically triggering higher inflation. in this instance, the issue is about all but cash into this economy. natural supply options. this is what i saw, prices for raw material into the highest level ever. they've declined but here is the kicker, still six 100% above the historical average. wages climbed to a record high we know price increases are on
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the way. the economic control of this is already beginning to materialize holiday sales thus far and i don't think it's just about supply change. i checked out a few miles last few days, traffic was okay but there's nothing in the traditional holiday shopping bus. of course, that shouldn't be a surprise considering lunch in consumer sentiment in the most recent report. it fell to the lowest since 2011. that number was corroborated today, down more than expected. the federal reserve biden administration amid throwing money at every problem raising this nation and in the process it created new problems, the market under pressure because jay powell acknowledged was the scuttlebutt all along, here's the thing. i bet he will come out in the next 24 hours, write this down. make sure we all know tapering is not the same as hikes. the bottom line is we as a
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nation when it comes to free money and cannot turn back without possibly crushing stocks and housing markets and wiping out the events. the spring and now david your newest book there is no relaunch, i don't know. that does not mean there will be a serious be to pay for this? eventually, who pays for this? >> it's paid for by future generations and the consequent lower economic growth, stagnation effect from fiscal policy, spending too much money and excessive monetary policy that ms. allocates capitol and we seen it play out in japan and i believe a get paid by other generations which is why politicians and policymakers are able to continue with things
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that don't really work because they are not generally the ones who have to pay for. charles: looking up japan, birth rates have dropped considerably lower birth rates, higher interest payments at some time, can we conceivably ever pay it all off? for the be at dark shadow that harms future generations, not just one but multiple generations for a long time to come? >> i do believe we will pay off but i don't believe they ever pay off debt. all they do best is stopped growing their debt and roll over their debt year-over-year next decade over decade. there are few examples in history of a developed civilized society reducing gross debt levels. i will push back, i am not sure interest costs will go higher, as every motivation in the world for the u.s. to japan to stay near zero for decade upon decade. how can they do it? japan has done it 30 years so i
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think this inflationary effects will prove to be just as problematic as inflationary effects we are facing right now which i happen to believe on the supply side so ultimately i want to supply side to resolve this, more goods and services. that is our problem, we don't have the engine of wealth creation that we need and we are capable of in this society. charles: i tend to agree with everything you said. let me get to the markets, you make partnerships and other energy related positions boils down a lot. are you changing your position on anything? >> there's a lot of reason to believe the energy this year, the entry points we do not believe there's something sustainable on the supply side, here is what we have, a world,
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not just the country, a world that needs more u.s. oil and gas. especially gas, there's dispersion between oil prices and natural gas. what we need is to store it and transport, uni ticker for utf-8 does midstream oil and gas related transportation. juicy yields, great financial fundamentals. charles: always appreciate our conversations and great i guess you been rocking it. talk to you soon. millennial's and gen z left mom just in time to get smacked with historic inflation spikes. how all of this free money is on the very people it was designed supposedly to help. the white house turning on big business they sought help from. there was a gathering yesterday, there would be a press conference and it never happened.
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i think they are made as scapegoats. wait until you hear this. we'll be right back. ♪♪
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really not the right of passage many think about when we come to an adult because for 40 years inflation generally has moved down, sharply lower but all of a sudden new generation of americans are feeling the pain of inflation which really is more painful the first time it hits your wallet so gen z, welcome to adulthood and the impact of free money. senior policy analyst, i have amazing hopes and beliefs in young millennial's, genji opening physicist, investing and what a great life. of course many are resentful world they've inherited and now they will have to deal with the worst tax of them all, runaway inflation, how will that change things? >> we are seeing it hurt people in their future. young people, the ability to buy a home is to really damaged by now. the numbers we have, almost 19% increase in inflation and housing.
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there are always winners and losers when it comes to the market as you know. this helps the people who already own homes, more wealthy and established people, it hurts young people who wants to buy a home, younger people are deferring buying a home, seemed empty for starting families. we are seeing people who have lost faith in the university system. i'm sure you've seen the "wall street journal" have looked that young the latest housing data we saw first time buyers, 29%, that's had to be around 40% for a truly healthy inclusive housing market so that is great points. it also helps establishments and banks. janet yellen crypto currency
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today, she seems hell-bent on derailing. when i think of crypto, i think of the crypto, their path to economic independence so hardly -- how does yellen and company continue to be the stable coins and crypto and piquant all the time? >> i don't trust folks like her and the federal reserve have totally underestimated inflation, they told us it would be much lower, targets were to present, we are now 6.2%. the is ahead against inflation, returns we are seeing not just crypto but gold and commodities are good hedges against the inflation we are seeing. i do want to say in response to your previous just paying down debt, there's historical evidence we have in the united states, we were responsible after world war ii, we have enormous debt. right now under the biden
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administration, we are at nearly 126% but in 1960, prior to lbj and the great society, were at 52% in 1980, 35%. 56% in 2000 so it's not that we can't be responsible, we can and we must. charles: by the way, one of the roaring 1920s, government lower taxes, cut spending and took their savings and pay down debt from wwi. so it has been gone and can be done. great talking to you. >> good to see you. charles: granddaddy of software services company such a report after the close. a darling stop that could turn everything around but ahead of the news by now, next. ♪♪
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♪♪ ...
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i promise - as an independent advisor - to put the financial well-being of you and your family first. i promise to serve, not sell. i promise our relationship will be one of partnership and trust. i am a fiduciary, not just some of the time, but all of the time. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com
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look! oh my god... oh wow. ♪ i want my daughter riley to know about her ancestors and how important it is to know who you are and to know where you came from. doesn't that look like your papa? that's your great grandfather. it's like opening a whole 'nother world that we did not know existed. ♪ you finally have a face to a name. when you give the gift of ancestry®, you give the gift of family. ♪ charles: something strange in the last 24 hours folks the biden administration seeming ly turning on the same companies that actually sought help from to end the supply chain crisis. grady trimble is live with that story, grady? reporter: hey, charles the federal trade commission is launching an investigation and it's asking for info from nine companies, they want to look into the supply chain disruptions and what's causing
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them, but also, the hardships they're causing for consumers and as they put it, how they could be harming competition in the process. the ftc wants details from these nine companies on the factors disrupting their ability to obtain transport and distribute products. ftc also wants to know why that's leading to delayed orlve. the companies have 45 days to respond. important to note that this is not part of any law enforcement action, but as part of the inquiry, the ftc is asking for info and documents from some of the largest retailers in the country, including walmart, amazon, kroger, kraft heinz, and tyson foods. the ftc chair said in announcing this investigation, i'm hopeful the ftc's new study will shed light on market conditions and business practices that may have worsened these disruptions or
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led to asymmetric effects. it's worth pointing out though, president biden, just a couple of weeks ago, asked for a similar investigation by the ftc into the oil & gas industry, about higher prices at the pump. the oil & gas industry pushed back saying that's just a distraction from the higher prices and the bad policies from the administration that's creating them. we reached out to several of the companies that were a part of this investigation. we haven't heard back from any of them. neither the president in that instance two weeks ago nor the ftc in announcing this inquiry, charles, used the word rigging but it's sort of the implication that these companies are creating these higher prices in order to enhance their profit. charles: it's absolutely nuts to me. kroger was at the white house yesterday, walmart was at the white house yesterday, there's going to be a 3:45 call, president biden was updating us on the great meeting and instead
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they canceled it until tomorrow, and now this ftc news and it doesn't feel right these folks went to perhaps try to solve the solution and now being investigated grady thank you so much my friend. you know, folks, friday market was dealt a shift in selling we saw a massive dull ping of names that have already been down, so we saw a whole bunch of 52 week lows and i've been talking about that but then, we saw a whole bunch of 52 week highs start to dwindle. i think people are selling their winners but thud she be riding them out in fact be looking to buy the dip? i want to bring in mark tepper and david nelson to help us round out this show. mark i'll start with you. it seems to me, if you're in a stock that's down you're probably down a lot, so now it feels like people might be panic king, selling their winners , even though probably they wanted to hold on to it two or three days ago. >> i wouldn't doubt that so one of the things we've actually been doing is we kind of over over the last few weeks have been cleaning up our mistakes and shedding ourselves of our
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biggest losers so we're sitting at a very high cash level for our portfolio right now. we're at like 14.5% normally it's around 2%, but charles, we're not doing it as like a risk-off move. we're doing it so we can build dry powder and we can buy the dip when the price is right, so look, it does seem like people are selling their winners it seems like they're doing more of the risk-off move thing, but i think the move right now is to position yourself so that when a stock you like falls into your lap, you're able to buy it from a position of strength so that's our move. charles: david? >> mark is exactly right. selling your winning positions to hold on to your losers might help in the short run, but usually it's a setup to under perform. i might resize some of my positions especially some of the winners, but unless the fundamentals change dramatically i'm not going to do some wholesale selling. bottom line, investors trade too much, charles. what's the catalyst to get back in because down 10 always feels
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like down 20 is right around the corner. charles: and that thing is psychologically, they won't get back in. they won't take advantage of the dip. let me ask you guys about a big name reporting after the bell. salesforce.com, there's a whole lot of these software stocks, particularly software as a verse names reporting this week so let me stick with you, david. would you be a buyer? i know you like cloud stocks. >> i do like cloud stocks, and i own a lot of them, but i'm taking on so much water today, to mark's point, probably not going to take another name right now. salesforce is actually the value play of the space, pays at about 12 times sales. most of the space pays about 50 times. i get it's a more mature company but it's a company i like. i don't own it right now but i'll certainly look at the report after the close. charles: i should say mark benio ff is one of the wall street darnings if you will so even when they miss the stock it doesn't stay down long it's one of the good things about it when you buy it on time magazine, maybe, mark, are you a buyer? >> [laughter] um, look, charles, david,
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there's nothing i love more than high margin recurring revenues with sticky customers, and that's exactly what you get with salesforce. if you think about it by the time you build-out that crm as a business it's way too painful to switch crm providers. the problem i have charles it's a bit too expensive when you look at a lot of the small cap software names a lot are down like 30% but when you get into large cap software names they're down less than 10% so i think i would rather look at the names that are beaten down a little further but i'm not buying just yet. i'm going to wait until the bleeding actually stops in those names. charles: real quick, then, when does it stop? do you have a target on the downside, mark? >> i don't but here's one thing i'm looking at as a buying signal. so when the percentage of stocks at a four-week low is at 50% that is a crystal clear buy signal. we hit that 40% on friday, so we were almost there. yesterday was an up day, we'll see what happens after today and
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tomorrow. charles: i know, my man, david schweikert always taking advantage when other people are panicking mark, david, thank you both very much. folks we had a little bit of the cp effect but we're pulling back pretty big as we head into the closing bell. again we started with a variant, but jay powell, which is interesting, because we knew they were going to taper, maybe wall street thought he was going to say something to, i don't know, diffuse the virus he didn't though, did he, liz? liz: well he's not a doctor and no he didn't. you're right, charles. looks like a double whammy slam ming wall street as we kickoff the final 59 minutes of trade. folks it's very hard to find green on the screen look at the dow it is down right now 587 points low of the session a loss of 679, s&p and nasdaq also crimson at the moment, oil, small caps and transports are taking an outside hit at this hour this as yes, fresh headlines on the new omicron variant collide with the federal reserve chair's testimony on capitol hill, where

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