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tv   The Claman Countdown  FOX Business  February 1, 2023 3:00pm-4:00pm EST

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no one really knows because this is not like the other business cycles in so many ways. it may well be that it'll take more slowing than we expect and i expect to get inflation down to 2%, but i don't -- that's not my base case. my base case is that the economy can return to 2% inflation without a really significant downturn or really big increase in unemployment. that's a possible outcome. many forecasters say it's likely but there's a chance. >> the full weight of tightening not in place yet and with the
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progress against inflation and a lotted opportunistic talk about very, very -- lot of talk about very, very slow growth going forward in 2023 and the recession indicators are all suggesting that we are going to see recession this year so i'm wondering it you've changed your view or you have a more ewe nuad view of the growth going forward and close to tipping it into the wrong place which calls for more restraint on your part. >> most forecasts and my own assessment would be that it continues at subdued pace and gdp of 1% last year and final sales growth, which is a better indicator of about 1%.
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growth will continue at fairly subdued level this year. there are other factors though that need to be considered. you will have seen that the global picture is improving and that'll matter for us. the labor market remains very, very strong and job creation and wages and job creation comes down and state and local governments are flush these days with, you know, spend tax cuts and there's a lot of spending in the construction pipeline. there's a good chance those factors will help support positive growth this year. and that's my base case is that there will be positive growth this year.
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>> i think early on you said you need to see substantially more evidence of inflation coming down and can you give us some idea of what you're thinking and mentioned three months we've seen three months in a row and governor waters suggested he might want to see six months and just the inflation data or have to see the labor market coming back into better balance to have substantially more evidence metric. >> there's not going to be a light switch flipped or anything like that and it's an accumulation of evidence so of course we'll be looking by the time of the mark meeting and we'll have two more employment reports, two more cpi reports and we'll look at those carefully as all of us will and we'll ask ourself what is are they telling us? and soon after that we'll have
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another eci wage report, which as you know is a report we like because it's just for composition and very complete. the one we got yesterday was constructive and it shows wages coming down, but still at a high level. they're still at a level that's way above -- well above where they were before the pam pandemic and reflected in the policy overtime. i will say though it is our job to restore price stability and achieve benefit for the americans. market participants have a very different job and it's a fine job and great job. in fact, i did that job for years.
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years -- in one form or another but we have to deliver that and we're strongly resolve that had we will complete this task because we think it has benefits that will, you know, support economic activity and benefit the public for many, many years. >> thank you, fed chairman, for take the questions and we have solid job growth -- solid job growth with slight falling in the increase in consumer spending and seems so far it's been relatively mild from the economy to go from 9.1% cpi to 6.5% cpi inflation. is the hard part yet to come to go from 6.5 to 2? >> i don't think we know honestly. so we of course expected goods inflation to start coming down by the end of 2021. it didn't come down all through
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2022 and now it's coming down pretty fast. i would say this is not a standard business cycle where you can look at the last ten times there was a global pandemic and we shut the economy down and congress did what it did and we did -- it's just unique. so i think certainty is just not appropriate here. inflation, it's just harder to forecast inflation and may come down faster and it may take longer to come down. our job is to deliver inflation back to target and we'll do that. we're going to be cautious about declaring victory and sending signals that we think that the game is won because we've got a long way to government it's the early stages of disinflation, and it's most welcome to be able to say that that we're now in disinflation. h, but that's great but we just see that it has to spread through the economy and then it's going to take time, that's all. >> how long do you see the federal funds rates remaining at
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that level? >> my forecast and my colleagues from the sep and many different forecasts but generally it's a forecast of slower growth, some softening in labor market conditions and inflation moving down, moving down steadily but not quickly. in that case, if the economy performs broadly in line with those expectations, it will not be appropriate to cut rates this year, to loosen policy this year. of course other people have forecast with their inflation faster and that's a different thing. if that happens, inflation comes down faster then we'll be seeing that and we'll incorporate into the policy. >> thank you, chair powell. let me ask a question about the language around ongoing increases. that of course implies two further rate rises. if you look at fed fund futures pricing, the implication is that you raise rates one more time and then pause.
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are you concerned about that divergence of do you think everything breaks to that. is that a plausible outcome? >> i'm not particularly concerned about the divergence. it is largely due to the market's expectation that inflation will move down more quickly. i think that's the bigger part of that. so again, as i just mentioned, you know, our forecast, there's different participants with different forecasts and generally those forecasts continued with subdued growth and some softening in the labor market but not a recession. not a recession. and we have inflation moving down. you know, into the mid 3s or lower than that for now and we'll update that for march and in december. markets are past that and they show inflation coming down, in some cases much quicker than that. we'll just have to see. we have a different view and it's a different forecast really
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and given our outlook, i don't see us cutting rates if we have our outlook as i mentioned if we do see inflation coming down more quickly, that'll play into our policies, of course. >> hi, chair powell, npr. one of the changes in the statement this month is the committee is no longer listing public health among the data points and you'll consider in assessing conditions. what should we make of that? does the federal reserve no longer see the pandemic as weighing on the economy? >> that's the general sense and i personally understand well that it's out there. but -- that covid is still out there but it's no longer playing an important role in our economy and, you know, we kept that statement in there for quite awhile, and i think we just knew we'd take it out at some point and there's never a perfect time, but we thought that people
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are handling it better in the economy and the society are handling it better now. it doesn't really need to be in a -- in the fed's monthly or post-meeting statement as an ongoing economic risk as opposed to health issue. >> i wanted to go back to another thing that fed vice chair brainard said and she doesn't see signs of a wage price spiral and i'm wondering if you agree with that? >> i do. db of interaural. you don't see that yet but the whole point is once you see it, you have a serious problem. that means that effectively in people's decision making it's really salient and once that happens, that's what we can't let allow happen. you know, so that's why we worry that the longer we're at this
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and the longer people are trying with inflation all day long every day, you know the more risk of something like that but there's not much -- it's more of a risk, it always has been more of a risk than anything else. by the way, it's becoming less salient and people are -- we pick that up in conversations and i've seen data too and people are glad inflation is coming down. people don't like inflation and as we see it coming down, that could also add a boost to economic activity and look at sentiment surveys and they're very, very low with 3.5% unemployment and and it has to be inflation. once inflation is coming down in the coming months, even you'll see a boost i hope. >> that's what you're looking at most closely is consumer expectations? >> that's at the very heart, consumers and businesses that are essentially, we believe that
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expectations of future inflation are very -- at a very important part of the process of creating inflation. that's sort of as a bedrock belief in one way or another, it has to be. we think it's important, and in this case i would say the risk eight months ago or so, longer term inflation expectations moved and you happen we moved quite vic roushly last year and -- vigorously last year and expectations are well anchored at the shorter end and not longer end and that's very reassuring and the markets have decided and the public decided that inflation is going to come back down to 2% and it's just a matter of us following through and that's immeasurably helpful to the process of getting inflation down and the fact that people now do generally believe it'll come down, that'll be part of the process of getting it down and it's a very positive thing.
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>> struck people as important and the committee said participants talked about unwarranted evening of financial conditions was a risk and it would make your life harder to bring inflation down. >> conditions deny change from the december meeting to now and side ways and up and down and roughly the same place and it's important that the markets do reflect the tightening that we're putting in place as we discussed a couple of times here and there's a difference in perspective by market measures on how fast inflation will come down. we'll have to see.
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our forecast it'll tame time and patience to run higher but we'll see. >> does the fed take into account the debt ceiling that rapid or quantity quantitative debt ceiling could react as we get closer to the drop dead deadline this summer. >> look, it's hard to think about the possible ramifications and not likely to have important interaction because i believe they're in the end to have debt
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ceiling and doesn't risk against inflation and the economy and the financial sectors and it'll happen. we of course will monitor money market conditions carefully as the process moves on for example the treasury general account will shrink down and grow back up and we understand there'll be lots of flows between there and the overnight repo facility and reserves and we understand all that and we'll be monitoring. thank you very much. liz: federal reserve chair jerome powell using the phrase the job is not done yet, no fewer than four, five times while addressing the central bank's effort to douse the flames inflation after the eighth rate hike in a row and the markets have swung from red to green. take a look at dow jones industrials and s&p up 43 and
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the nasdaq, big percentage leader here up 221 and russell 2,000 up 29 points. you know it did take time for the markets to find their direction. if you look at the inter-days and first of the dow jones industrials, there was a big drop after the announcement and low of the session loss of 504 points and high of 507 and see a pretty significant swing from trough to ping and the s&p and loss of 39 and now it's up 39 but off the highs and here we go with the nasdaq. nauseas was down 84 and sleetly spiked up as soon as powell began speaking and the high of the session about 260 points and we're up 209 and flip it over to the bond market. we're reading these headlines and prices are jumping and the yields were rising for weeks, they're plummeting and down 11 basis points for the 10-year yield since powell began
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speaking. look at two-year yield at 4.12% and two year yield at 4.23% right at 2:00 p.m. eastern. so you can see pulling back of the yield and the bond prices are rising and why the optimism and certainly for the stock market and the dow just turned negative and these numbers are fluid here and stay with us for the next 44 minutes and powell said he does not see a wage price spiral and trajectory for keeping the economy stable appears to be holding steady. listen. >> unemployment will rise a bit from here and i still think there's a path to getting inflation back down to 2% without a significant economic decline or significant increase in unemployment. liz: okay. what do you see? see the u.s. dollar pairing its earlier losses, strengthening following the report all though you still have most of these
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currencies moving higher against the green back and the volatility index was moving higher and i want to say, look, it did spike for a moment right around the time the announcement was made but the high of the session was around, i don't know, 1942, we're at 18.2 at the moment. the peak: 20. you'll notice it sank into negative territory at the time of the release and fear out of the markets and look at financials and bisben fish rare acts and -- big beneficiary rates and morgan stanley up 1% and call goldman sachs about flat and jp morgan and citi up half a percent. powell was peppered with the question, when will the interest rate tightening cycle pause and the fed rate is on going increases will be ongoing and appropriate. ongoing was the word we told you yesterday you needed to listen for. clearly we were righted because he said it, it's still going and
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that means they're maybe not ready to pause. this is almost like a test because i heard one thing and one of mine heard another. thing bring in peter schiff. this might be a chance this is the late rate hike and andy brenner and euro specifics peter schiff. andy, to you first. how much do you think if you climb inside his head, tell me exactly what he meant when he kept saying the job is not done but the markets are continuing to move higher. >> it was everything you pointed out and did a great job. the dollar is lower and the market equity is higher and bond markets are lower in yields and higher in price. everything points to this is the last fed tightening. liz: where did you get that, andy? i did not hear that? >> you're right, he said on going increases but he said that we need to stay on it. and staying on it is where you are right now. you just raised fed funds to
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four and three quarters and pce deflater 4.4 and this is the first time in years that you've had the fed funds rate higher than the pce deflater and the market wills do the rest for him and the markets do not believe he is going to tighten further. this was a more than doveish -- not quite in the doveish camp but this is a neutral to doveish speech, and people were looking for a very hawkish speech and he didn't give it. having said all that, i always wait 18 hours before i really take the full effect of what the fed has said. liz: 18, not even 12. okay. peter schiff, what did you hear? i heard an ospry or a hawk, what did you hear? >> it may be so but not because inflation is coming down. inflation is going to get much worse. in fact what i heard from fed
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chair powell was a lot of economic ignorance when it comes to inflation. first of all, you said he welcomes the disinflation and that disinflation is transitory and maybe he doesn't realize that yet but it is. he also claimed that inflation is caused by consumer expectations. he is wrong. expectations don't cause inflation. neither do wages in prices and he was worry that had maybe a wage price spiral could develop and that's why the fed wants to see it happen and wage price spiral was a fiction invented by people and the federal reserve spending money and printing money. spending is going up and he encouraged congress to raise the debt ceiling and congress can borrow and spend even more money ultimately the fed will monetize that debt and we've only seen the beginning of inflation and in fact powell said that inflation is creating misery for families.
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it's the government that's creating that misery and the fed because they're the ones that are creating the inflation. liz: well, you certainly have got and this was a paul voluvolkerand ronald reagan thil worked with him to cut spending. i'm going to push both of you on this. i didn't hear what you heard. i heard there's more rates to come and there's a very big danger in stopping short. let's listen to what he said that jumped out at me. >> the risk of doing too little and finding out in 6 or 12 months that we actually were close but didn't get the job done and inflation springs back and we have to go back in and now you really do worry about expectations getting unanchored and that kind of thing. this is a very difficult risk to manage whereas we have no incentive or desire to overtighten but we -- if we feel like we've gone too far, we can
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certainly end it and inflation is coming down faster than we expect, we have tools that would work on that. i do think that in the situation where we have the highest inflation in 40 years, the job is not fully done. liz: okay, andy, i'm sorry. i think you're wrong. i think you're wrong. i do not see powell pulling his foot off the gas yet. >> risker i stand by my opinion. look, this is the same fed that told you one year ago that today fed funds would only be at 1%. they're at four and three quarters now. i don't believe the fed has good economics and i agree somewhat with what peter is saying and if you listen to the very end of what he just said he said we have the tools that if inflation were to come down faster, we could do things meaning they can ease. i still stand by the fact this is the last rate increase and fed eases by the middle or the third quarter of this year. liz: and, peter, what is the
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dadanger of that? >> well, inflation will run out of control but remember, they've already slowed down the pace and only went 25 basis points and even if we get a couple more 25 basis point hikes, it's not nearly enough and also you have to look at the affect that higher rate haves had on consumer behavior, which is pretty much nothing because credit card debt is at an all-time high and savings at an all-time low and higher interest rates have not stopped spending and encouraged savings, which is exactly what has to happen to bring down inflation. meanwhile as i said earlier, the government continues to increase spending and if powell thinks a slow down in the economy is going to reduce inflation, he's wrong again. that's going to fuel the fire and the financial crisis at a much more severe recession than the fed recognizes and then the fed tries to prop up the economy and try to stimulate or combat
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the financial crisis by creating even more inflation. liz: i need to get to possible investments here and we have blackrock investor on the show and he said this is the market for investors because yields are so high and come down 9-11 basis points depending on the part of the yield curve you're talking about, are they still good investments to part cash? >> liz, the front end of the yield curve is the best place to put money right now. inside of three years and corporates you can get 5% and mortgages make sense. you know -- liz: let's show three month and two year if we can. >> cheapest part of the curve right now or at least when i walked in was a six month bill. i bought some yesterday. i think it's incredibly cheap. 480 yields. but you can get 6% in short high grade corporates so i think that's the place to go. i would say away from duration. if peter's right and the bond market will go crazy to the negative, then you certainly don't want to be out in the long
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end. liz: give a shout-out to you, peter. you've got two funds that have been ranked number one and number three in the international fund area and specifically these are by u.s. news and reports large end cap value. your number one for dividend paying fund and no. 3 for your foreign large value fund, international and we can show some of the holdings in here and you're beating -- goldman sachs is number 2 but you're beating vanguard and some of the biggest funds. what is it about foreign large value stocks for the atmosphere. >> first of all, all the funds in large value stocks and we've got better stock picking and better sector allocations but first of all on bonds, bonds are a sucker bet and talking 5 or 6% yield, inflation will average more than 5% over every one of
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those years so you'll lose money in bonds. if you want to avoid losing inflation and you've got to get out of dollar dominant assets and stocks are a great place to look and get dividend yields higher than some of the bond yields and real assets that can rise in price as inflation continues to erode away the value of the dollar. last year the dollar is up and this could be one of the worst years ever and they're one of the best years ever and investors should look there and and a weak dollar is going to be particularly bullish for the emerging marks and rather than
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u.s. stocks or stock bonds. liz: we've got to go but, andy, your investment advice is appreciated and it's a wild afternoon, folks. i'm really glad you're all sticking with us. dow is up 51 points and the markets in the green following in the chair powell's message and the major intraday reversal and it had been lower by 504 points and here's where we're seeing the biggest stock moves. worst performers on the s&p 500 and flip them over to the laggards here and the company ea and electronic arts chub match group and seeing real muscle and advanced micro-devices with the earnings and old dominion striker, nvidia, monolith ick power system and look at blue chips here and we only have about nine, nine in the red here and merck, s cisco and honeywell
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up 3% and followed by sales force followed by microsoft and this is a look at sectors and in the red earlier was energy and i believe that is still pretty much the case. we do have energy as the only sector in the red. now that jay powell's precision in laying out the rate hike landscape, i don't call it precision but these guys are hearing it pause. on the billboard outside of the federal reserve which stocks work at a hawkish environment and get to the floor show. standing by, trader kenny polcari and ryan. kenny, to you off the squat jay powell looked like a -- jay powell looked like a hawk to me. what does that look like for the sectors for us? >> i'm in the same cam as you and i don't know what he heard at all. i didn't hear anything that he
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heard at all and thinks it's the last rate increase. there's going to be two more like him and goes till may and then i think he pauses but look, they had all the journalists in the room trying to ask the same questions 11 different ways to see if he gave the same answer or if there was any change to the tone or the words and that's when you saw them all. look, edgar, it's over. >> i hear transport is up almost 4% today and yesterday's eci and employment cost index and going down and powell wants that to go down and one more quarter and there's an above average chance this was it and just look at how the bond markets, your job is to guess before and transports that strong and small caps that
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strong and that's the market telling us that we're in a bull market. i know it sounds crazy but october was the low and seeing that for awhile and how we're positioning, liz, we don't use a recession and people are coming around to that and we've been saying that the whole time and cyclical values and industrials and materials and small caps. those are the areas that you should do well if we can avoid a recession and it is what it is. there's a -- last point, lot more participation. this time last year what was leading? boring stuff. utilities and staples and now it's the more aggressive things leading and a healthier, much healthier market than 12 months ago and what we think will keep going higher here. >> liz: ryan, these are better valuations and better materials and, kenny, what about you? you have been somebody that's been nibbling around the edges of tech. are you taking bigger bites right now? >> yeah, i am taking bigger bites and names that are being arbitrarily located in the kind of panic.
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it's the big names getting pushed and we talked last week microsoft up ten points and you and i spoke about it and that was the opportunity to take advantage of the stock that gets dislocated on days like today when we're very weak this morning, i was looking at big names they own, names that i like in the long term that are being dislocated. to ryan's point. you're right, small cap, ijt, ijj and up 7-10% year to date and i'm nibbling there as well. i'm not convince that had jay powell, that the bottom is n. like ryan and andrew think, this is it. i don't think this is it. there's two more hikes to go and i'll remain a bit more cautious but that might be reflective of my age as well. liz: right. if you believe we're not in a recession and the consume service connected pretty decent and strong and we're going to the discretionary. >> that's a great question and look at valuations and
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technicals and fundamentals to us and still pricey areas and be honest, there's big names that are driving consumer discretion and individual stock kind of issues there, but i'll tell you, liz, the whole thing is this. i've got one quick stat and last year we were down and we know that . history the 5% balance the last month, january, like we d. it happened five times and full year, liz, was up every single times and up almost 30% on average and not 30% this year but i'm calling it a bullish slingshot. this could be the huge start to a better scenario and stocks over bonds and cyclical over defensives and technology were more even and we're not sure tech will lead for several years but if it's going up, that's nice. there's more participation. liz: more participation. kenny, jay powell to me, it's almost like a roar shack test. i saw a red tailed hawk, osprey and maybe andy and ryan see a
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parakeet or sparrow, is there always a trade or not? >> no, i definitely think there's a trade and i think in this case, if you are looking way, way beyond, ryan said it. ryan said they're up and up significantly so far. if they're right, those names will continue to outperform in that space. so those are names that you want to look at. liz: look at want, the want etf. this is consumer discretionary with a looter of name -- lot of names of things you don't need to buy but want to pitch amazon is in there and amazon is looking pretty good here, up 2.25% and some of these holdings, it's a very nice three month move for consumer discretionary. >> right. yeah, it is. remember, consumer discretionary was down 34% last year just like communications was down 36%. those are two of the best performing sectors so far this year and up double digits, 14 and i think 18%. so that makes sense. once again because people are looking to put money to work in
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sectors that they think will better if they're getting to the end and at some point we'll get to the end. now or may? it's may but at some point you'll get to the end and those stocks will do well. they're already doing well. liz: ryan, here's the market action and the dow is now up 109 points, high of the session 12 and looks like we're heading back up there. nasdaq up 256. high of the session, we're just four points away from that. so it's almost as if traders are betting hard that they're right and the federal reserve is wrong and to me, that's like sixth graders betting hard that the teacher isn't going to give them homework for the weekend and they're doing that as the teacher is writing the assignment on the black board. >> right. >> boy, yeah. who really likes homework. you think about it, i don't blame them. yes, i love the discussion you guys had earlier saying listen, the fed isn't always right. the fed isn't infallible. this time of year, one hike was coming and i get it all. used cars going down and rents
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down four months earlier and china reopening supply chains and getting better and all linked to inflation, liz. with inflation coming down, that's what we want to see and not like 81 or 82 and remember them, august '882 once inflation rolled over, in four months made up the losses and i don't know about doing it this time but 5 fresh all time high, incredible. liz: i have to give andy brenner his shout-out because his morning note said if powell came in neutral or doveish, bitcoin would go not p parabolic but wod strengthen and bitcoin up three quarters of a percent before 2:00 p.m. and the announcement, look at it now. it's up 3.1% and climbing here. kenny, why? is it risk on now? >> yeah, i think risk on and
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crypto winter is over and they'll go all in on it and risk on for that asset class. liz: oh, man, you guys are awesome. it's still a roar shack and i'm see ago hawk and kenny, what are you seeing? a sharp shined bird. there's such a thing. >> i know that you and i have the same narrative here; right. it's not over yet. liz: i think ryan has bigger assets under management so we got to split difference here. guys, great to have you, thank you very much for joining us as we keep one eye on the broader market, peloton now has hard numbers to back up its new ad where the company claps back at the accusation its bikes are merely coat racks gathering dust. wait till you see how juiced investors are about peloton's quarterly report and we'll show you straight ahead. wall street legend is gearing up in front opportunistic our cameras in just a moment to address anxious investors predicting an earnings recession.
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we'll get his thoughts on what the fed just said. closing bell, we're about 23 minutes away. the dow is up 183 points and the s&p better by 64, the nasdaq hitting a new high up nearly 300 points, gang, when the markets rock, the "claman countdown" rolls. we're coming right back.
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>> fox business alert and watching the dow jones industrials up about 227 points. the s&p up 70 and nasdaq up 315 points. this is all the fed and this belief and again, all i heard was the job is not done. but people that make a lot more money than most of us.
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the ad says 92% who kick off the years and nothing hanging from these things and have a big stock move up 27% right now to $16.48 a share. the stock up today after net losses narrowed from a year earlier from subscription revenue, higher than sales of connected fitness products for the third quarter in a row. there's a bit of a trend going there. snap though is plunging and we've got snap down 10% after the parent of snap chat missed fourth quarter analyst estimates for revenue and declined to provide guidance for the third quarter in a row. that's never a good sign; right. however the company did say sales from its direct response
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advertising business rose 4% in the fourth quarter so there's that. checking pinterest but we really need to look at meta. pinterest up one and a quarter percent and reports up 2.8% and there was a headline that meta won by virtual reality startup with unlimited loss and so the ftc did not get its way on that one. shares of ea are moving lower at the moment by about 9.8% after the video game publisher fiscal third quarter results missed expectations and lowered the annual booking forecast and delayed the star wars game release and butt the kabosh on two others and recession worries will weigh on the stock. 38% of s&p companies have reported fourth quarter earnings and a pretty significant 9% of them beat earnings but if you compare that to past quarters,
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not good. wall street legend bob dahl not wowed and he's the cio manager of $5.3 billion in assets. bob, worried about the earnings recession because we hear this from a lot of recessions that say this might put at least a lid on bigger gains for the stock market in the next couple quarters. >> sadly, i am, liz, but last year was about compressing valuations and this year it's what is the company going to earn. 2023eps estimates for the s&p 500 peaked last summer at 1252 and today in the high 220s and i wouldn't be surprised if it got down to 200. the economy is slowing and earnings growth is being questioned. you just pointed out this is the worst quarter in terms of earning surprises in 10 years with the exception of one quarter during the pandemic. we've got some earnings problems out there. liz: sounds like it. do you anticipate that they'll get worse in the current
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quarter? >> my suspicion is they probably will as the economy slows and we have things pointing to the slowing if not the r word mild recession and inverted yield curve, decline in money supply and pmis negative, we know what the fed did last year, it was the second fastest pace of rate increases in history, and monetary policy takes a long time with unpredictsable lags and -- unpredictedable lags and slow down is a as a result of 2022 and leading indicators are pointing to things will get soggy. liz: what do you look for when you say now that looks cheap and what are your metrics and what will hit the bottoms?
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>> well, quality of the company, it is income statement, readdictability of earnings, quality of ball -- predictability of earnings and balance sheet and they were great factors for outperformance last year but they've been absolute wrong things to focus on this year. it's been the higher the bay taxer the more uncertain the earnings and better -- beta and more uncertain the earning ands better the stocks and looking higher over earnings valley and see how long that can last, liz. liz: hold up. i want to give our viewers this alert here i'm noticing. the dow is up 102 and just lost more than 120 points off the highs of the session. bob, what -- is it now that people are starting to hear what i thought i heard from jay powell and that is there's more rate hikes to come. >> that's what he said, our job is not finished and talked out of the other side of his mouth appropriately to say, you know,
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inflation is beginning to improve. we don't think we'll be lowering rates this year but maybe if things get weak enough we would. he's opening the door to the more doveish side, and i think that's what excited the market today. liz: i have for my own identification what, did you hear from the roar shack test? >> look, i think what he did was cover his bases. he can do almost anything now and say, well i told you in the press conference that if things got better, we wouldn't raise rates anymore but i told you if inflation is not conquered, we'd raise them ma more and not finid provide visibility to the rates. liz: not quite finished yet, that's why the word on going is still in there. bob, you've got picks for us. what are they and why? it system of articulation so the three stocks -- >> so the three stocks are high digit if not double digit earnings growth last year and this year.
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can't find a lot of stocks that fit this bill. these are stocks that did reasonably well last year and lagged this year. signa as a choice. i like the hmos. they're been horrible performers year to date and technicians putting up the yellow if not the red flag. i don't know the fundamentals still seem very good. signa is expanding, they're working on improving their profit margins, they're tucking in acquisitions so that'd be one name. mastercard, i love the card business. the dollar volumes are going up as the economy grows. they're doing a lot more overseas so you're seeing these cross border volumes do well. this was not particularly cheap. it's nearly 30 times earnings but the earnings growth and cash flow and predictability, it is very good, and the last pick i had, liz, is lowes l-o-w and miles an hour rowing the profit margin gap with home depot and
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stock only 13, 14 times earnings and there's three names if you want to own companies that have earnings and cash flow now, focus on these. liz: all right, bob, wonderful to have you. thank you very much. >> thank you, liz. liz: the fed chair has spoken but the count down chair panel is here to read between the lines -- we need more reading between each letter of the words he said because we're all hearing different things. this is a highly unusual fed meemeeting and press conference. we'll hear from two experts, one a stock picker and one a economist. you've got to hear. closing bell, nine minutes away and dow looking like it's about to turn negative and there it goes. dow just turned negative and it went from a high in this hour up 226 points to the upside to now flat. closing bell is just as i said nine minutes away. we're coming back in a second. ♪
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get in on the savings and switch today. liz: i want you to turn your attention to the vix, the volume tell index. this is wall street's fear index. a few minutes ago it dropped to a one-year low. i believe that number was 12.73. it is slightly off of that now. it is on track to close perhaps or near the one-year low.
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we had incredibly choppy trading. look at dow jones. we're down 17 points. low of the session. loss of 504 points. high of the session, right after fed chief chair powell began speaking, up about 226 points. so it has been quite a, i believe the earth is moving underneath people's feet. chairman powell did say the federal reserve is seeing early signs of disinflation? that is the slowing of inflation but that the fed and inflation nowhere near declaring victory against it. here is how he put it. >> our job is to deliver inflation back to target. we will do that but i think we, we're going to be cautious about, about declaring victory and you know, sending signals that, that we think that the game is won. we have a long way to go. it is the early stages of disinflation. it is most welcome to be able to say that, that we are now in disinflation but, that's great but we just see that it has to
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spread through the economy and that it going to take some time. liz: mizuho securities, steve ricchiuto, quincy krosby with 1.1 trillion with as sets under management. steve, how to proceed? what are you telling clients at mizuho how to proceed now? >> the fed is on the other side of the equation. they will continue to raise rates on gradual basis, 25 basis points this meeting and possibly the meeting thereafter. i think they will pause. i think they're pausing prematurely, i think the next will be a hike, not a cut. liz: i don't think the fed will pause. quincy, investment landscape at this point, where do you see the sectors with the best opportunity? >> i think energy, industrials, attractive. health care attractive. then there is always the
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treasury market and corporates. they represent an important part of the portfolio finally. i think clients could do very well with investment grade corporates and also just treasurys. in addition to the sectors that lpl research is overweight. liz: yeah. the 10-year yield right now, 3.4%, the shorter end, the one year is 4.6%. same with the tree three month, steve? >> yes. >> liz: do rates attract even though they come off the highs? >> the yield curve in terms of the three month bill and the one year bill but the market is telling you that the market discounted the federal reserve cutting rates this year, there is no doubt about that. whether or not they do is still a forecast, it is not reality. therefore the interest rate dynamic is extreme. just as we probably getting to extreme levels in terms of the
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equity markets on valuations as we've seen with the volatility followed on the back of clearly a dovish press conference. liz: quincy, 30 seconds left, win es haves to be thanking or dissing the fed chief in a year? >> i think they will be, they will be thanking him. i think next year at the end of the year will not look anything like the end of 2022. with the fed or without the fed, remember it is about corporations and corporations in this country do a really good job of managing that bottom line. [closing bell rings] liz: yeah. don't count out the american business world, everybody. the dow finishes slightly in the red down 17 points after swinging 752 points. tomorrow, senator mark warner of virginia on tiktok bans. ♪. larry: hello, folks, welcome to "kudlow," i'm larry kudlow. so, folks, kevin mccarthy has jo


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