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tv   Making Money With Charles Payne  FOX Business  October 17, 2022 2:00pm-3:00pm EDT

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david: well you could be a debbie-downer but not with these numbers. markets are looking great. the nasdaq is near the session high at 3 1/2% plus. it's a good day to toss to charles payne. he has it all covered. hey, charles. stuart: a great day, david to be tossed. thank you very much. david: you got it.
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stuart: good afternoon, i'm charles payne. this is making money. after of the crazy last week is this just a sucker's rally. we'll handicap netflix and tesla. those are biggest earnings. grab a pen and paper for chart school. meanwhile the federal reserve is trying to do things they have never done before but in the process they're okay with breaking things, anything. danielle dimartino booth on her take what she says is the mother of all fed policy errors. a empty world is a small world. we're talking about the troubled metaverse. nobody wants to live there, work there, even play there. can mark zuckerberg turn meta around? we'll ask mark mahaney. my take on 401(k) e. i have retirement plan discussions. we have great guests.
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all that and so much more on "making money." ♪. charles: so, as you know i love to start these shows, right, with the word of the day, but coming into the week feels like colloquial phrases might be appropriate like flash in the pan. was the extraordinary session last thursday a flash in the pan. what about this one baked in the cake? could aggressive moves promised by the fed be baked into the cake? what about this? taking the bait. this could be a sucker's rally. should i be taking the bait? we're all asking these questions this morning. mike wilson with the real hot hand on wall street recently of morgan stanley he actually has come out maybe, we'll get a bear market bounce that could lift the s&p 500 to 4150. this would coincide with seasonality. we talked about this a lot on the show. this is the typical year in the blue line. we're already kind of diverging f we start to turn here it could be pretty good although mike
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wilson said 4150. i don't know if we get to 5000 by the end of the year. the big wild card how far central bankers will go. no one really knows. look what their task is, folks. talk about all central banks combined. they did $14 trillion. you have fiscal stimulus from different nations that was 21 trillion. united states, $13.5 trillion since the pandemic, 59% of gdp. how do you really wind something like that down? that is the dilemma we're in. start the show, bring in kaltbaum capital management president, gary kaltbaum. gary, i know you're a price guy but you're paying close attention to all the different nuances right? i know it is not scientific but does it feel like the market is oversold and maybe this could be the beginning of a tradeable bounce? >> well, first off my word of the day is xanax. charles: [laughter]. that is the word of the year.
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>> charles, 5600 dow points to the downside in two months. 3800 dow points in just one month. to the recent low. that defines oversold is oversold can be. on thursday i was 100% sure that we were putting in another good low here for a countertrend rally of unknown price and time and then friday we got whacked. but today looks like it confirms it. i suspect we're going to rally up some here. i don't know how much. i've been out. pretty much most of this bear market thankfully. charles: right. >> we're nibbling now but i will tell you that it is not for what i would call long term. i hope it turns into long term but we're nibbling a little bit now. we'll see what goes. if it keeps working we'll add. charles: right. >> i know people are calling the bottom. we think bottoms are a process and we'll be ready. charles: gary, right now someone on the fomc opens their mouth
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the market probably stumbles, right? there will be a point where the talking heads keep talking and market calls their bluff. is that one of the things you're looking for? >> we watch reactions to everything and unfortunately they don't stop talking. to us it is not the news, it is reaction to the news and if we start seeing good reactions to what we perceive to be bad news, that is good news for the market and for me with the fomc, i put them on the side as i told you. we're watching yields. when yields went back up above 4% on friday we got worried. we're something to watch. that is something to watch closely. i think it has been dictating policy all year. charles: right. you mentioned you are nibbling at some things. what are some of the things you are nibbling at and some things you are spying right now. >> i'm broad-based. there are only 4 or 5,000 companies reporting in the next few weeks. what i will looking for great
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reactions by companies with great earnings and revenue growth. so i'm not ready to go because you got to be careful here. charles schwab, great company, last i looked was down three dollars today on earnings while other things are up. we'll do a little broad-based movement here. then we'll start doing individuals if the market continues to do well. we really think thursday was an important day for the near term. i'm just not so sure what the words near term mean right now but we'll take anything to the upside i can get, my friend. charles: i know. that move down to new 52-week low, that kind of volume, that kind of reversal so rare i agree with you. i think it means something but you know this year you want to temper yourself before getting excited at all. >> it really defines a washout of late sellers after a a after gargantuan drop. we'll take things day by day. good sign, a little bit of confirmation from thursday. let's hope it continues.
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>> absolutely. feels like clue mackic. thank you, my friend. oppenheimer lowered year target second time in july. 4300 to 5300. now say 4,000 a practical matter. that is three months ago. we're not going to 4800 at least wherever they think we were going. a lot of ambitious targets out there. in fact goldman right now, if you take a look at this, their weight the average gain over the next year saying almost 30%! this is weighted average. is this too optimistic? i want to bring in cleo capital managing director sarah kuntz. you've been bearish on the broad market. i think a lot of people don't think it would be unusual for us to be higher a year from now but could we be that high, 28, 29% one year from now? >> i mean you can never say never, but when you look around globally it doesn't seem likely. you know i think that the numbers threw the end of this
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year are largely going to be dependent on holiday sales as well as what the fed says. if they make a new year's resolution they're done with rate hikes we might see some exciting numbers in the 4,000s sooner than we think. charles: i've been looking around. everyone has sort of a checklist when the bear market runs its course. do you have things you might be looking at you have to check off before the coast is clear? >> i see all the checklists, sure, you can track the vix, peak to tough numbers, the question look around what is going on in the real world, right? are people still feeling pain in housing costs, food costs? are jobs where they need to be? housing where it needs to be? what is going on globally. so in all of that i think we're definitely still in the bear market. charles: i want to tap in your angel investing expertise, early round of investing expertise. over the weekend checking a bump
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of things out, see a article on uber. this is 2010, october 15th, 2010. they closed on one million dollars. $1.25 million where was i. now it's a 50 billion-dollar company. sarah, can you give me the next one, please? >> those companies existed. in the h 2010 companies did not look good. airbnb, uber looked good. in times of downturns companies start. if you know a smart person with company building experience think about getting to angel investing because you can see that kind of return. charles: golly, how come i didn't have a neighbor. put in 100 grand, right? we wouldn't be having this discussion now. let me ask you about the here and now because you have had pretty intriguing picks that have done extraordinarily well. are you buying anything now? >> i think this is a great time
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to continue to dollar-cost-average in. it is also a great time to sit out of the market. i don't think it's a great time to sell but some of the names i'm looking at, thinking about, names interesting m&a targets. i don't think it is unreasonable to say, next year we could see peloton bought by apple, have apple branded pellatons. usually when those acquisitions happen, we saw this in the kroger and albertson's deal, you see the 25, 30% price bumb right? poshmark. real picked up by lvmh or in order volume. i'm not saying buy but names i look at. charles: i like when you share your watch list. sarah, thank you very much, appreciate it. joining me now bahnsen group managing director david bahnsen. david it has been a pretty good session obviously but a lot of people have become cynics these days. what issues do you think need to be resolved before you think the
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coast is clear? >> for long-term investors the coast is clear of the issue you're asking about is the ongoing volatility. it is not just the stock market but the bond market. high levels of bond volatility, higher interest rates driving stock market volatility. i don't see the stock market calming down until yields calming down. the 10-year doesn't have to go back to two 1/2%. i think it settles somewhere in the 3s quits going up and down so severely. charles: sounds like it could be a multimonth process? >> absolutely a multi-month to get rid of the volatility. but great buying opportunities in equities might go away in next few months. charles: you were ahead of everyone with the oil trade. even with the recent pullback with profit-taking from the election in november of 2020 it has been up 175%, xle. we talked about the transition, maybe a transition where these tech names no longer purely dominate. i saw where oil now xle, when from 2% to 5%. if you take oil, materials,
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industrials, those old century names can they actually come back to have a true leadership role? >> they can. i don't think it necessarily has to be energy that is the top of the s&p for the next 10 years but i start with what it won't be which is tech. we don't ever get two decades in a row of the same sector leading. generally the top sector one decade is at the bottom the next. charles: right. >> maybe tech ends up in the middle of the pack, i don't know but i think something behooving a choppy market, a range-bound market. i think of the 2000s you came out of dot-com implosion, tech was the bottom of decade. energy did real well but so did consumer staples. so did does industrials. it will be defensives. keep an eye on health care. charles: health care did pretty well. it it was the best sector last week. i want to stay on oil. this move by opec caught the administration off-guard. although some people saw coming there is a push in d.c. called
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know peck. attacking saudi arabia and opec not producing oil. there is a bill, recent poll on it. 45% of voters agree we should go after them in antitrust. i'm worried about this being a slippery slope. how do we tell another nation how much of a product they should produce? >> you don't and it is a garbage poll, there is no way they're explaining to people what nopec means. the question would you like opec to have as much power as they do? you and i would say, no, wish they wouldn't. would you say want oklahoma and texas to be more important? that is what no peck should be. is the biden administration allowing u.s. resources being leveraged instead of suing opec in a court. it is completely ridiculous. not our business to tell them what to produce. it is especially offensive when we could be the marginal producer. indeed we were the marginal producer three years ago. charles: right. >> we're choosing not to be the leader on the world stage. charles: it is absolutely nuts to me. i can't let you go without stock
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ideas because you have got names not in the energy patch. >> we were probably got to a price level we have like lamar advertising which is a smaller cap company but we loaf their dividend growth years and years. make digital billboard. charles: has something to do with the midterm elections with all the money being spent out there? >> no it doesn't but they are event driven catalyst for the sector but they have been stable, non-cyclical for a time. when they shut down the highways in the country they did pretty well during covid. charles: used to buy them before the elections. did okay most times. maybe i got lucky. system mon property group. >> seven 1/2, 8% yield. it is coming down in price. collecting rents. you see numbers, louis vuitton. even if people think a shopper will slow down next year which i don't the fact of the matter they collect rents. they own great real estate assets with limited leverage. simon property is a good buy. charles: so far between what the banks said this week this
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morning and last week, maybe the credit cards, maybe excess savings but we're still spending money. still going to the mall. >> our society doesn't need motivation to spend of the we need motivation to produce. charles: great stuff. david, appreciate it. thank you very much. of course we'll stay on the markets all show long including time again we'll stay on this topic perhaps of new leadership. also tesla, at a real key support point. having a great session today. but should you own it before wednesday's earnings. one of the names we're could having in chart school next. ♪
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first psoriasis, then psoriatic arthritis. even walking was tough. i had to do something. i started cosentyx®. cosentyx can help you move, look, and feel better... by treating the multiple symptoms of psoriatic arthritis. don't use if you're allergic to cosentyx. before starting...get checked for tuberculosis. an increased risk of infections some serious... and the lowered ability to fight them may occur. tell your doctor about an infection or symptoms... or if you've had a vaccine or plan to. tell your doctor if your crohn's disease symptoms... develop or worsen. serious allergic reactions . watch me. ♪. charles: all right, we're showing a little little bit of . let's go to chart school to see if this time is for real. foder andrew thrasher.ytic start with the s&p. it has been something of a disaster. i thought it was interesting this morning that mike wilson of morgan stanley saying there is a good chance it could get back up to the 200-day moving average
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which it did before then maybe fall apart. 4150, 4155 does that seem reasonable to you? >> sure. i mean the 200 day is a very much a technical key level. first we need to get it back above the 20-day. stop talking about the 200 day yet. we have sellers stepping in at the 20-day. we saw it before. we saw it last week. it is right around, we're still not there yet today. having a nice move today. we need to get above the 20-day first before we get to the 200 day. charles: what about the downside? this thing is ugly. lower lows and lower highs, i see the chart, i'm a channel kind of guy, what turns it around? what is the next big downside test? >> we're starting to see some improvement in some of the breadth data. the market is a market of individual stocks and we're seeing less and less new 52-week lows, less six month lows from the individual stocks level. that is what we want to start seeing more of.
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now we want to start seeing stocks strengthen. see sector rotation. energy is the worst performer, consumer discretionary, real estate that one has been in the dumpster for a while. charles: right. >> we're seeing a little bit of sector rotation. we need to start seeing that improve, breadth improve, less volatility. the fact we're seeing big moves whether up or down that needs to cool down as well to get buyers interested in returning to the market. the biggest thing, volatility upside, downside to cool off. charles: real quick on the nasdaq 100, even uglier chart. i would suspect, same thing, right? calmness to the market? maybe starting to trend a little bit higher? would that be a sort of a natural buy signal? >> so right we have a downward sloping 200-day moving average. we're clear downtrend on nasdaq. average decline of those 100 stocks is 38.3%. that is some serious drawdown. charles: wow. >> worse than covid crash.
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worse than 2018. this is worse than individual stocks on tech side, growth market, makes up a lot of s&p 100. we can't have the countertrend really strong rallies but we're really deepwaters for a lot of those stocks. charles: right. >> that needs to firm up for us to get the index higher. >> i will try in a minute or so to hit two of them. first is netflix this chart blows me away. you have two gargantuan gaps. i'm a gap guy. you go to the gap. fill the gap, look at a gap like that. how does it work when you have a gap like that at the same time looks like we're own the verge of maybe breaking a trend line? >> kanye west left the gap. we chartists like gap. netflix at 250. that was high since august. that is natural level of resistance. above that buyers want to fill in. it's a pretty big gap. charles: my goodness. >> we need to get above the august highs. until then really not interested. charles: what about tesla?
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seems like these names, either way, you know, they both report this week. you want to be in them, or out them before they post those numbers. tesla looks less appealing to me. what do you think down here? looks like at a support point, if it fails there katy-bar-the-door? >> put aside the fact that elon musk is big risk of tesla. put away he tweets something that causes big pain in tesla but if it holds above 200, 210, the bullish move is up to the 200-day moving average. you have earnings risk, event risk there. hundred one day moving average is the short-term support. on upside that is where i was looking volume profile for tesla looks pretty good and but earnings and elon musk risk are hard to digest. there is other fish in the sea for me. charles: good stuff, andrew. thanks a lot, appreciate it. folks coming up a dramatic fall, right? remember the first tweets that went out there, the first tweet, the first 2003 itself became an
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nft. sold for three million. golly wish i bought it? maybe you glad you didn't. tell you how much it is going for now. metaverse will anyone take up the offer? mark zuckerberg hopes so. we have top tech analyst mark mahaney whether he can actually get people to use the metaverse after all. ♪. flexshares are carefully constructed. to go beyond ordinary etfs. and strengthen client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to read it carefully. ♪ ♪ ♪ ♪
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charles: all right, folks a megacap names leading the charge today but as i mentioned earlier in the show this is sort of a growing contingency out there think the glory days are over and that these names will become lumbering giants. they will generate cash but much lower top-line growth which means they command smaller
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premium valuations. we have head of research at evercore isi mark mahaney. mark at some point that is true for every industry but is it too soon to write the obituary of these names being sort of the leaders of the market? >> well, that is a really complicated question, charles. yes, i guess the answer is it is too early. no question growth is slowing down to your prior statement. i will give you numbers here. meta, google are both expected to grow their top line next year, in 2023, before we've gotten through earnings we'll see estimates are cut further nine or 10% year-over-year. prior to covid back in 2019, both of those assets were growing their revenue bases north of 20%. so part of it reflects what is obviously a softening macro environment, part of it reflects maturity and part in the case of facebook some very substantial issues.
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competition with tiktok. then the loss of some of their advertising signal because of the apple privacy changes. so there is a lot of headwinds, some tailwind, mostly affecting these stocks. you're right, multiples come down over time as the growth rates fade. advantage, one reason i like meta, one of the reasons i like meta, trading 10, 11, gaap earnings. those estimates may need to be cut. i don't think they are cut in half next year. i think it is modest cut. i like meta. charles: who would have thunk we talking a year ago about a great value stock called meta. i will talk about the metaverse. another issue i don't recall a major problem is execution. amazon missed consensus the last three or four quarters. you don't like it as a buy? >> i like it, charles. i want to be flat out about amazon. amazon was probably the most macro exposed company in tech?
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why? because they're fully exposed to fuel costs shipping costs, raw materials costs labor costs all of that whacked them at the beginning of the year. that was the biggest shock, cost shock that amazon has probably ever faced in its history. they overhired, overplanned coming out of covid crisis there were a lot of things. they misexecuted. i thought to their credit they were up front about it. now we're here six months later. after they froze their hirings, in their distribution centers, froze the level, they didn't bring anybody new. charles: right. >> as they started cutting back on expansion of distribution centers i think you will see costs mellow or moderate, operating income rises and i think amazon is probably one of the two strongest assets i look at, google and amazon. amazon is 40% dislocated to its pre-covid multiple. that is not right in my book. i think this is one of the best dhq, dislocated high quality
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names in the space. amazon is one stock i would buy more than any other and buy it right here. charles: real quick on meta, the metaverse thing, all i read last week no one is going there. maybe it is time to change the company name back to facebook, maybe instagram. maybe change the name to gram, move to meta couple years. >> gram meta, i think you're right charles. zuckerberg to his credit, his company, he has the voting stock so he can do what he wants and you don't have to buy the stock. you don't have to be part of the partnership with him but you know he is from the beginning said this is a 2030 plan. ie, we're going out five or six years, you should interest this as option value. most big investors in a name, as an analyst i would hope that they trim down all of that metaverse spending. it is 10 billion a year. that's a lot. i be, i think they should spend on forward growth initiatives, you want companies investing
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around the curve, i think something like five or six, seven billion would be a better for a name like this and what i'm hoping to hear on the earnings call trimming down the expense guidance next year if they do that i think the stock goes higher and i like meta here. charles: fiscal discipline in this environment is smart management anyway. >> discipline. thank you. charles: by the way you're still the best on the street. >> thank you, charles. charles: folks a lot of things with respect to this market and where it is right now, a lot of anxiety, a lot of frustrations. my next guest though he is not frustrated. in fact one of the things he saw last year was the nft craze and how crazy it was. you remember that jack dorsey tweet that went for $2.9 million? right now it is marking, you can buy it for 97 bucks. joining me now is taves asset management ceo, phil taves. listened to some interviews last
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year, read some of your work, you were calling this all out real time. we're having fun. down in miami beach. we're buying nfts saying no get out now. these are flashing red flags. >> absolutely. back in the internet bubble we were talking how internet stocks are so crazy. nothing like this bubble, no assets, no earnings at all, priced at infinity no earnings, no value. that nft may be highly or infinitely overvalued. charles: the 97 bucks? [laughter]. i might bid 97 for it to see what happens. to your point, is it group think? wall street is interesting, right? they try to blame the individual investor every timing is goes wrong. it is not the individual that drives up these massive, massive bubbles. they don't have that kind of money. these are multitrillion dollar bubbles that eventually burst. it has to be wall street falls in love with it unless they're orchestrating it. >> truly remarkable, charles,
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things like cryptocurrency, essentially in our opinion a worthless asset. charles: even bitcoin? >> i believe so. charles: really? >> i created a term. speculation investing, purely speculative based on ponzi-like effects there is know earnings, no assets. look what happened. it wasn't just small investors. virtually every large financial institution if they were not investing in it themselves as blackrock did, they were creating pathways for investors to get there. charles: two stories of major firms still creating pathways. so you base your work on behavioral analysis. i don't think this gets enough ink. we talk fundamentals all the time, we talk technicals all the time. how is behavioral analysis different. >> we instead of attempt ignoring big drawdowns in '86 or the japan stock market debacle it actually acknowledges them. what it does we attempt to create portfolios designed to be
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all seasons types of portfolios. what does that mean? in terms of equities instead of ignoring big declines you create strategies that uncorrelate from economic activity. charles: only thing uncorrelated right now is cash. >> that is what it is. charles: in third quarter, or september only thing worked was cash. >> exactly. charles: so where do you see the market now? potentially get a fourth quarter rally. longer term i think you still think there is some more to the downside? >> we do. of the one thing we think the most predictive about the market is valuations. one of the reasons i was talking about the bubble before we were in the range of 22, 25 times trailing historically doesn't look good at all for forward growth for stocks. we're not anywhere near at mean levels. 18 times trailing s&p 500 we're still above mean. that doesn't look like a bottom to us. the other thing to look at what happened to volatility? volatility increased up to 32, which is on the vix index but before most major capitulations
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you're 60,0 times on the vix. we think we got a ways to go. i think you're right. we could have a fourth quarter rally here potentially but zooming out into the long term i think investors need to find ways attempt to derisk so they can potentially come in at much better prices. >> phil sure you're name isn't mr. happy? listen, my man you've been right. great stuff. folks coming up we're hearing that maybe, just maybe from a few guests we'll get a nice rally. that means we would have to hear something positive from the federal reserve. we'll talk about whether or not the fed has figured it all out. later in the show we have john rowland to help us analyze how much more pain there could be but first danielle dimartino booth is on deck. ♪.
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gold. your strategic advantage. (music) visit ♪. charles: this morning mike wilson who has the hot hand this year at morgan stanley, made an observation that the bond market was the most mispriced market or asset in the world at the end of last year because it underestimated inflation. he says that was a result of federal reserve guidance. if you fast forward to this year you wonder if bonds are getting it wrong or right again because the fed is sending the wrong message. joining me quill intelligence llc chief strategist, danielle dimartino booth. danielle, i personally continue to believe the fed is doing all the jawboning because it is not going to be able to hike rates as much as they keep threatening they will for a number of reasons but are they doing the market a disservice by doing
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this? >> look, fed communication has never been the strong suit, charles. i think we can agree on that after these last few years. that being said, every time there is a rip your face off bear market rally in which we're in the midst, as far i'm concerned the fed has license to keep on tightening at this unusually fast and large in magnitude pace. you know, you wake up one day, there goes a country or a country's currency. you wake up another day there goes a company and i think they're just going to continue going until they feel they have destroyed enough demand to bring inflation down closer to their target. charles: so i mean you mentioned about, you just sort of alluded to the idea of breaking something indiscrimenantly by the way. to me it seems nuts. maybe they're already making mistakes. i saw your tweet where you pointed to the surge. in principle year-over-year change in principle and interest payments and this is mind-boggling stuff. i mean this is the american
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dream up in smoke. you tweeted this could be the vestiges of the mother of all fed policy errors. so is this the first red flag for all of us? >> well, listen, charles, housing is nearly 20% of the u.s. economy. this is, not just a red flag. it's a large red flag. americans have broader ownership of homes than they do of the stock market. we know how concentrated stock market ownership is. think about, a lot of the households who were getting in at these last few months with an fhs 3 1/2% down payment. we're already starting to hear rumblings about homebuyers, with mortgages being upside down in their mortgages. i never thought we would be talking about these things again. this is something that the fed created, charles. they did not need to buy up a third of the mortgage-backed securities market. in doing so invites speculation. charles: you listen to more
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recent fomc press conferences with jay powell he specifically talks about participation. wants a lot more people to come into the labor force. wants wages to go down, moderate and u3 unemployment rate to go down higher. this is the crazy thing, this is from deutsche bank. they have never been able to do that! start of hiking. one year later, down, down, almost every year, two years later it is lower. just one time, that was in 2008, i mean 1980 would unemployment rate went up. every single time it went lower. so why are they crushing the economy talking about sending the u3 unemployment number higher when they have never been able to do it? >> charles the difference between now and back in the '80s, you cite the '80s, right now we've got inflation. not only is the fed trying to engineer an unemployment rate shock higher, they're doing so against a backdrop of 18
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consecutive months of inflation adjusted falling wages. they're trying to get wages to fall even further into this environment. again because they're fighting inflation, charles, you heard me say this a million times, the federal reserve is driving through the rear view mirror. fighting yesteryear's battle. charles: they will break something. they broken the housing market. the things they want to see, i'm not sure they can engineer. you told me they can't drill for oil, either. danielle, we have to leave it there. thank you, my friend. >> thank you, charles. charles: coming up my take away dealing with the carnage in your 401(k). the s&p 500 declining faster during this bear market than anytime in the last century. is there more pain to come? bar charts john roland helps us break it all down. he is next. ♪.
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listen i don't know much about his track record per se. i will tell you one thing i do know. he is one of the most active traders in congress. none, none of his political ads will admit as much. it really is the only thing i see when i see his name on the lawns or any billboards. you know, there has been some great work out there by the way, folks trying to bring awareness to this. unusual, bar charts is next. their senior market strategist john roland is with us right now. john, you guys have set up this political insider trading screens. are people using it? i feel like some people are angry about this, so many who are not necessarily interested in politics or the stock market? >> look, charles, first of all, thanks for having me on. this is actually one of our more popular sites since we put it up a few months ago. folks, do appreciate the opportunity to look to see what our politicians and their spouses are doing in terms of investing or sometimes even
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deinvesting in the market. charles: so in the meantime with the market itself lots of mixed signals, right including the duration of this market or, the duration of, where this market is goingi saw where, you posted or retweeted where it only has been i think 20 some odd months or 20 some odd percent rather typically we would be down a lot more but typically is that a bear market associated with recession? >> recessions and bear markets do go hand in hand but as far as how far this market is going to go, or how far this bear market could continue, as a technician i don't try to put my opinion on the market. i'm usually find that when i do that i end up losing money. charles: right. >> but if i listen to what the market is telling me i think you get a clear picture and that picture is that we're continuing to make lower lows.
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we just made this new 52-week low which was right around 3500. actually corresponds with a 50% retracement from the covid low to the 4800 level of our peak and, you know, you think about the drivers, your previous guest talked about the fed being, raising interest rates and i think that is definitely one of the drivers pushing the market lower. but you know, let's think about, you know, unwinding the excessive liquidity, a decade of excessive liquidity. can that happen in just nine months? the fed says they will raise rates to the end of the year. they will hold the rates until they see see a desired effect on inflation. what does that mean? first quarter next year a typical range of bear market about 15 months. the other metric i'm kind of looking at is revaluation of the overall market in terms of let's say the p-e ratio and i think
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the s&p needs to come back to a more historical level, say below 15. that woe put the s&p somewhere around 3200. charles: right. >> which would be the 61.6% retracement and typical bear market is usually about 30, 35%. that would put us around 33% from the high. >> so everything, all the stars aligned, fibonacci numbers, historical numbers. i got less than a minute to go. what about the flipside of this, for instance, pessimism? sentiment indicators are down. hedge funds are loaded up to the gills and shorts, individual put investor activity is through the roof. some would say that is a classic buy signal? >> i think in the short run you have to look at that. that is a fair assessment. seems every time the vix gets above 30 in the last six months to a year that has been preceded one much these bear market rallies. so i wouldn't be surprised that the market does rally. there are a lot of other tailwinds, seasonality.
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october is usually the lowest of months. we've got market usually rallies after midterm elections. don't forget, you know the old famous santa claus rally that could come the end of the year. one of these bear markets could seen a 10, 15, 20% rally off the low but i still think the market is telling us it needs to go lower. charles: if you're nimble maybe take advantage of it. one thing i would be so happy to see santa claus this year. john, appreciate it. great work. you guys do some great work. >> thanks a lot. >> my takeaway coming up on your 401(k) and retirement. i know it is getting crushed. a lot of people are frustrated. i want to talk to you about that right after the break. ♪.
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the twin terrors of inflation and recession take an even larger bite out of main street. they'll add insult to injury. but here's the rub, i think the only way to long-term survive onslaught is to be invested. to be invested in a smart way. i know almost all the guests today were negative about this market, still, your bank account is never going to outrun inflation. and job losses, maybe even you, you might lose your job. the stock market is probably going to move higher near term, and long term it will. this is the worst year ever for that 60-40 combination. i think it'll bounce back. one thing we do know, polling these kinds of -- following these kinds of years, we often have major rebounds. staying the course is the most important thing, and i know painful right now. that's why i'm here, and that's why liz claman is here. right, liz? liz: not painfulled today. look at this nice gain -- charles: it's like a band-aid, you know? we might need


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