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tv   Closing Bell  CNBC  January 4, 2016 3:00pm-5:01pm EST

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and for other legitimate reasons want to make sure that the wrong people don't have them for the wrong reasons. so i want to say how much i appreciate the outstanding work that the team has done, many of them worked over the holidays to get this set of recommendations to me and i'm looking forward to speaking to the american people over the next several days in more detail about them. okay. thank you very much, everyone. thank you, guys. >> so there you have president obama having met with attorney general loretta lynch describing what he intends to do in terms of an executive order over the next few days in advance of his state of the union address next week. what the president is talking about is a use of executive authority to broaden the definition of who is considered in the gun business. what depends on this is who is regulated under -- by background
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checks, gun shows, which are -- have been considered not in the business of gun dealing, but more occasional and perhaps even social or recreational entertainment events have not been classified in that way. the president is trying to do whatever he can since he can't get action out of congress to take action. don't know how much this will affect the gun violence that he's trying to stop, but at least that's what the president intends to do right now, guys. >> john, thank you very much. john harwood summing up the president's plans that will be rolled out later this week regarding some executive actions on gun control. melissa, it has been a busy day so far, dow off roughly 400, s&p back below 2,000. >> i will see you all tonight on "fast money." continuing market coverage of this selloff continues on "closing bell." hi and welcome to the "closing bell," everybody, i'm
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kelly evans. as the dow jones industrial average is down 405 points here at the new york stock exchange. >> im bill griffeth. first day of trading for '16 comes out with a bang. stocks taking this big hit after concerns about china's economy sparked a selloff there in asia overnight that triggered their circuit breakers. that market was down 7% when they halted trading for the day. the dow here was down 467 points at the low of the session a couple hours ago. if the dow were to close down more than 2% today, you probably have heard this statistic, it would be the worst first day of trading for the dow since 1932. >> yowza. >> 84 years by my count. >> many of the winners, though, of 2015 are starting the new year also with a whimper. take a look at some of those love names, netflix and amazon getting hit on the back of analyst down grades, we will take a look at whether it's a good time to buy any of these
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names. >> they've dee fanged the market in some ways. the other big story, middle east tensions rising over the weekend. we will break down the tense relationship twine iran and saudi arabia, the potential fallout for the oil market which itself had a fascinating day today. a couple big auto stories. general motors elevating ceo mary barra to chairman on the same day they announced a big investment in lyft. tesla falling after the company met the low end of its delivery target. we have a top auto analyst on both coming up. much to get to. let's start with full team coverage of this selloff today, seema mody is at cnbc global headquarters covering china's route, where today's events all began. bob pisani is with us on the floor of the stock exchange, bertha coombs is at the nasdaq. let's do this chronologically and start with that selloff overnight. >> absolutely.
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it started with disappointing data, chinese manufacturing contracted for the tenth straight month, escalating fears over the health of the world's second largest economy suggesting to some that the proactive approach used by the chinese central bank has been ineffective in kick starting growth and leaders will have to fine tune their macro economic policies going forward. investors are also worried about a ban that is going to be lifted on large shareholders that was introduced last summer at the height of china's market downturn in an effort to limit volatility. the expiration of that ban is expected to be lifted on friday and china experts i speak to say large shareholders could use this as an opportunity to reduce their positions. shanghai market the selloff there triggered the first ever circuit breaker. stocks were initially halted closing down by 7% resulting in a steep decline in asian stocks as well as in europe with the german dax witnessing its worst day in nearly 5 months. china accounts for 9% of german
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companies sales and 15% of earnings. so when china slows germany, boarder europe feels the pain. >> bob pisani, this is impacting a ton of stocks in the u.s. >> china was the major factor but not the only one. we had a very poor close to 2015, indifferent close, that shocked a lot of people. momentum traders coming out, basically betting against an early january rise, we had the china news you heard from seema, we had the saudsy and iranian conflict and then oil which rallied early on and then fell apart on supply concerns. a geopolitical event and oil goes down, that surprised a lot of people. finally ism u.s. data missed as well. not great numbers out of the u.s. sector recently as well. finally, no buying interest there you see we were moving down intoel european close then we stabilize ds after the european close around 11:30
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eastern time but we are not sitting far from the bottom. 1989 was the low on the s&p 500. remember, oil was up early on so we were expecting some of the oil names to be on the upside, exxon never made it, it almost did, but when oil fell apart exxon fell apart. that was the reason we had one of those midday droops we saw, exxon now down 1.4%. we also saw financials notably weaker as interest rates moved to the down side, that affected all the big money center names, jpmorgan's, citi bank, bank of america down 1.26%. another interesting thing that happened, consumer names were big, big winners in 2015, your altria, johnson & johnson, clorox, but they are down as much as the overall market down 2.3%, they are not being spared at all today. finally one sector, one of the only sectors to the upside, some of the retailers, most beaten up like kohl's are on the upside today, we did have good news on
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a couple of these names, there were a few jaup grids out there like lulu memen, but not many of them right now. guys, back to you. tough day to start 2015. >> kohl's and target both higher today. interesting. now to bertha coombs tracking the action at the nasdaq. last year's best performer today's worst performer. >> yeah. last year's first is the last today and we are near the lows of the session, the nasdaq 100 off 3% and chip stocks off nearly 2%. we've been down from the start of the day, though, and really the china-related names have been some of the biggest losers. one of the worst performers in the nasdaq 100, wynn is off of the lows. the worst performing sector is biotechs, down 4% despite reports of shire to acquired bexaulta, that's down 7%. also we are also seeing a number
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of stocks falling below their 50 day moving average. we are seeing a bit of a tech reversal at least we did in the last hour. take a look at apple, it came off its worst year since 2008, moved above the even mark in the last hour but now getting dragged down again. analysts say fear of apple's exposure to china and they believe the company is in good shape for first quarter and second quarter. still holding those lows we saw in august, though. also take a look at some of the stocks which have led the way higher today are the biggest drag. amazon getting cut to neutral, saying even winners need to take breathers sometimes and netflix also getting cut over at beared a lot of folks wondering about the momentum. take a look at some of these names that are moving higher, like gopro, down 70% over the last year, strong today, lulu lemon on an upgrade and dollar tree has been a stand out.
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folks worry about a weak christmas. back to you. >> thank you very much. so let's talk about all of this in today's "closing bell" exchange. joining us our first exchange of the year john manly from wells fargo funds management, right next to him keith bliss from can a tone and company and rick santelli checks in from chicago as well. keith bliss, more than a few traders today have said they felt like this selloff was overdone, i think the guy sitting next to you feels that way as well. what about you? >> i'm in complete agreement with that. there's a few things that are troubling in the market as bob was pointing out, i was not very thrilled like most people with the way we if inn initialed up 2015, it's not necessarily a dictum of things to come, but it's certainly instructive for us analyzing the market over the next few weeks. certainly the selling pressure that swept across the globe led to massive oversold conditions in the dow, the s&p and nasdaq. the russell has not gotten there yet to our oversold level, but the s&p 500 did at the 1991
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level, it's probably going to trade around here a little bit but there's encouraging signs that i think short term we will see a pop here. the brett inside of the market was seven to one down, that stabilized to thee to one down, it's come back a little bit. another indicator i look at is the traders index which shows the flows of money between stocks going down and stocks going up and that's just about back to neutral. so we're seeing some bids come in, we're seeing some buying come along. so i think this will stabilize right here and then we will probably trade a little higher into the end of the week. >> rick santelli, how do things look from where you are, especially what's happening in treasuries today? >> well, i know everybody is looking at treasuries, including myself, but down four basis points is fives, tens and 30s to me is the short end of the deal if you're looking at down 412 points in the dow. what's going on? it certainly isn't a rotation. if it was a rotation treasuries or safety type investments would definitely be doing much better
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than 4 basis points. i think it's a liquidation versus a rotation and, listen, we don't have to scratch down below the surface very much. chicago pmi was horrible, today the ism number was the weakest since 2009, back to back numbers under 50, atlanta gdp now is at .7 versus its last read of 1.3. if you factor that in with the known first, second and third quarters you come with an annual gdp of 1.8 for the u.s. we see aptly put at the top of the show that when china sneezes the germans say god bless you and catch a cold. well, all of this is going to continue. i just don't think we're going to wake up tomorrow and china's glide path will change, the notion of weakening the euro to help the likes of germany do better considering they are also handicapped on the export side as it is, i think all these factors will be with us all year. does that mean that the u.s. is new normal of a little less than 2% growth isn't going to
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outshine? no, i think it will and i think liquidity will find us, but certainly i think that all the big variables will be macro variables for all of 2016. >> yon manly, am i right, you would buy this dip? >> yes, i would. i can't figure it out to be honest with you so i may be the wrong person to ask. i don't think the chinese numbers were that awful. i mean, they are noft good and no question manufacturing is contracting slightly but i don't see shrines of panic and the services sector is expanding and the ventral bank got better with dealing with pressures. i don't see a reason why it should have sold off this much. i think it's fear generating more fear. i think when you have trading stocks put in place they are a little bit like black holes, the closer you get to them the more you are likely to be pulled into them. >> fair enough. keith, it will be significant if we start this year off with its biggest percentage decline which it looks like here with only 45 minutes to go since 1932. what do you see, you know, to people in your family, people you know who ask you how significant is that, just the
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fact we're starting off this year the weakest in many decades? >> if you were to look at historical factors and seasonal factors it is very significant, but, again, i go back to the way december ended up, that's more significant to me than what we're doing today. if you go back to 1958 historically december is always the strongest month and all four of the major indexes closed in the red in december. i think that's more significant. it's not telling us what's going to happen into the future but if we look at how trading has done today with a lot of the robots, a lot of the machines, these types of fear trades pull people out of the market you will have wild swings to the down side. i do agree in the short term there is a buying opportunity here, longer term into 2016 as i try to look over the horizon i think there are more selling pressure instruments and things going on in the market than there are that would allow us to buy. i think it's going to be a very interesting year. i would keep powder dry, you can buy on the dips and make money in this market as it trades back and forth. >> we're having an interest year in just this one day.
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john manly, what would you buy if you're looking to buy something here? >> pharmaceuticals, if you're worried about the u.s. economy which i suppose is something people might worry about, these are stocks that have lagged for a while. they have strong fundamentals and demographics. i'm also long -- and i would buy the big international integrated oil. they are not so much petroleum plays, they are quality plays going forward. if oil does move up for some unforeseen reason they benefit from that. later on after weakness i'd buy technology. i still think business to business is a good place to be, i still think corporations will try to make themselves more efficient. >> if anybody had trouble hearing that you were saying there, john, pharmaceuticals, international integrated oil companies and even some tech look a little attractive. guys, thank you. >> thanks, guys. happy new year. with 45 minutes to go keeping an eye on the dow jones industrial average down 414 points today, at one point earlier in the session at the lows about 467, all 30
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components were in the red. looking for any spots of green, seeing them unfortunately when we look at the vix, that volatility gauge jumping 4 points, s&p 500 down 48, nasdaq down 145. >> good to have you back by the way. up next the latest developments in today's other market catalyst, rising tensions between saudi arabia and iran and the geopolitical fallout resulting as well. plus the leading auto analyst weighs in on tesla's lackluster deliveries and general motors investing in lyft. when a moment turns romantic why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure.
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welcome back. a selloff day to begin the new year, the dow down 416 points, the s&p down 48, nasdaq down 145 points, the biggest decliner among the major averages, a decline of 2.9%. what a tug of war for crude oil today, both wti and brent opened higher presumably over the tensions between saudi arabia and iran, but then we got word of an inventory glut in cushing,
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oklahoma, that pushed prices lower today. >> especially that wti contract more so than brent. three allies of saudi arabia are taking serious diplomatic actions against iran. michelle caruso-cabrera has the very latest for us now. >> bahrain, the uae, sudan siding with saudi arabia also led by a sunni government by serving or reducing diplomatic ties with shia led iran. this all comes after iranians ransacked the saudi embassy in tehran, the capital of iran, in retaliation for the execution of a shia cleric in saudi arabia. saudi government said that cleric had held lead protests against the government and the saudi government does not tolerate dissent. the situation raising tensions between those two dominant regional powers which are already fighting military proxy wars in syria and in yemen. in syria iran is backing syrian leader assad while syria backing
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shia on the ground. in yemen iran is supporting shia rebels while saudi arabia is defending the sunni led government there. both iran and saudi arabia are oil producers, saudi arabia is one of the biggest in the world and iran is anticipating being able to sell oil once again if and when u.s. sanctions against the country are lifted. while oil prices initially rose, middle east watchers ska actually counter intuitively this situation could keep oil prices lower because it may give saudi arabia yet another reason to keep producing at full tilt, knowing that lower prices hurt iran just as it's trying to emerge into the global economy once again. >> the problem, michelle, you're right, but at the same time it also hurts saudi arabia. i wonder how many more levers they have to pull financially, especially as the political situation seems to darken. >> they're already trying to put u.s. producers out of business by doing this. >> right. the situation with iran, then, is just a bonus.
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they've already decided they will take this medicine to reduce the amount of production coming out of the united states. we saw their budget last week which made clear they're willing right now to cut subsidies to the population instead of trying to actually get more revenue out of oil by cutting production on their part. the question you're asking is the one everybody is requesting, how long are they willing to do that at this point. >> in the meantime the state department spokesman said they are not looking to mediate anything here, that they are hoping there can be a bilateral cooling off of these two countries. i know we are sending someone to both countries to gauge things out here. what do you think is going on right now? >> most of the middle east watchers i spoke with seem to think they don't think at this point this escalates into some kind of full scale military battle between the two countries. that being said, the situation is unpredictsable, they are both governments that are not democratic by any means and the leaders can do what they want
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when they want at any time. we will have to wait and see. right now it doesn't appear to be in their interest to escalate this beyond the very tense war of words that they've got. >> discomforting nevertheless. thanks, michelle. 40 minutes left in the trading session with the dow down 413 points to begin the year and again that's an eye opening statistic when you consider if the market finishes down 2% today right about where it is it would be the worst beginning to a new year for the markets since 1932. >> although what did you point out to me? >> during our production meeting i pointed out 1932 was the year that the market saw a major bottom, but i'm just pointing that out, not trying to imply anything. >> it is a stuff session today. up next general motors linking up with lyft and tesla coming in at the low ends of guidance. which company is positioning itself to be number one. also coming up two wall street experts do a deep dive on chain and what makes today's
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selloff different than the one in august. that's more to come on "closing bell."
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welcome back. not much green here anywhere on the market. the dow is down 423 points not
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quite the lows of the session but close. down 2.4%. same for the s&p 500 which is back below 2,000 and the nasdaq well below 5,000. it is down 150 points. biotech not spared today, that index down about 4%. regeneron down 6, gilead down nearly 4. just for context i believe healthcare, consumer discretionary have doubled in value over the last five years. >> maybe a correction is in -- is called for. >> let's talk about general moto motors. the auto maker a half a billion dollar investment in lyft which is only three years old when you think about that. gm will reportedly work with the ride sharing service. a couple things, one, you will be able to develop hubs where drivers can rent gm cars to use as part of their service in lyft and eventually work on an on demand service using autonomous
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cars, driverless cars. >> how about that. let's get reaction from auto analyst james albertine. good to have you with us. general motors shares were down along with the broader market. any reason investors wouldn't be pleased with this lyft investment. >> it's hard to peele away the reaction to the investment on a day like today. i think most importantly i think what this says is two things, first is it's going to be a cooperative effort between newer companies like lyft and traditional companies like gm in terms of the auto industry of the future and i think secondly where gm and ford and their peers don't get credit from investors is from a multiple perspective some of the technology investments they are making and the progress they are making in those investments. this is a great, i think, benefit from a perception perspective of gm as more of a technology or forward thinking technology company, but also it's going to be a cooperative effort. this is one example of many more
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announcements to come in the next few weeks. >> i know ford and some others are trying to develop their own ride sharing services. why buy into an existing company, why not just start your own? is that the more cost effective way to do that? >> ub has certainly gone viral faster than lyft has, i think lyft brings the little bit that we know about it, given it's a private company, has a little bit of a different go to market strategy. why spend money to recreate something that's already gone viral that's already got great brand perception among consumers arguably, you know, and separately i think ford and gm and other traditional oems bring a lot to the table as well from the vehicle manufacturing side, from quality control, safety, cyber security, things like that. it's a great cooperation. >> infrastructure is already there. while we have you, obviously we know how well the u.s. auto makers did last year but what about tesla, they came in at the low end of expectations for deliveries in the fourth quarter and that stock is down hard
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today as well. what did you make of that? >> again, 75% year over year growth and the stock is down 7%. i think what it tells you is there's still some concern among the bears that, you know, we are not seeing everything that really lies under the surface, that there are demand concerns and that every passing delivery number is more evidence thereof. i think if you are a bull as we are we're very early in the production ramp phase of model x, i don't think the bearish argument is fair given the investment -- the point at which they're investing in this new vehicle ramp. i think over time it will prove out to be just as strong if not stronger than the model s. so it's a tough day today, sure. the vehicle fire in norway, i don't think it's helping in terms of the media coverage that's getting and still a lot of unanswered questions there, but long-term i think we stay bull i wish. >> you still have a $400 price target on a stock that's 220.
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what kind of news is it going to take from tesla at this point to start pushing shares back up towards into price level? >> i think we definitely were a little early, we upgraded and instituted that price target now well over a year ago, but if anything we've learned that there's more substance that can get us to a target, whether it's energy storage, whether it's the giga factory coming online and providing a significant proprietary and cost savings, but proprietary advantage to tesla relative to their peers. so i still think it's likely, you know, with the day like today and i think some near term headwinds with the model x ramp it may take a little longer than we thought. >> james, thanks for joining us. >> thank you. time for a cnbc news update. let's get over to sue herrera. >> here is what's happening this hour. president obama says his upcoming recommendations for gun control executive actions are within his legal authority.
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he spoke in the oval office following a meeting with attorney general loretta lynch. people are returning to work at the inland regional center in san bernardino, california, where 14 people were killed last month. the property has been fenced in and several security guards were checking id badges. nearly 200 muslim workers at a meat plant in colorado have been fired. the action is the result of a dispute over prayer while at work. the company says the dispute started when 11 so mallees wanted to pray all at one time and were denied because it would stop operations, they did it anyway and that led 200 others to stop work in protest. new york giants head coach says he is stepping down after 12 years saying it is in the best interests of the organization. this just one day after the team completed its third consecutive losing season. could go listen won two super bowls during his time with the
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team. >> that's my team, i love the guy to pieces but he knew it was time. >> absolutely. he did it with grace. >> he did. class organization, too, they were going to let him make the decision. thank you, sue. >> see you in an hour. 30 minutes to go here. dow still down more than 400 points to kick off 2016. the s&p down 46, the nasdaq down 142, it is down almost 3% on the session today. >> this will be an interesting half hour. a leading trader will tell us what he's watching as we head toward the close on this selloff monday. stay tuned. you're late for work.
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welcome back. it is a brutal session for markets here. the energy sector is actually the outperformer as oil was briefly higher earlier in the session, now both wti and brent are slightly negative. it's still down 2 slrks 3 of 1%. bottom right is the financials, down 2.75%. we did have lowering in interest rates that might have fed into it, more broad concerns about global growth after a disappointing ism report. >> it is the last half hour of trading. let's see how we finish this day off. steve grasso joins me on the
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floor of the new york stock exchange. >> happy new year. >> how what? >> i think you have to take this all with a grain of salt. everyone knows the market has been a little weak, we didn't know how far we would run into year-end, now the fang stocks are in question. >> that's the horse -- >> that's the horse that got us here. >> right. >> so does the selling of fang, buying the laggards does it last more than a week or month? we will know pretty soon. >> two questions, levels you're watching right now? >> 1969 is a pretty good retracement level from the s&p, recent high 2134 so that recent low 1867. i think i did mention that i do believe that the market is going to test that 1867 level sometime this year. >> 1867. >> 1867, a considerable amount lower than it is right now. these lower levels they come quick when the market drops in a precipitous fashion. i think we can get there sooner than we think. >> what happens in china tonight when they reopen and will that
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affect us tomorrow. >> i think china is the biggest story, i think saudi arabia is the second largest story but it all hinges on china. i think you will see a little bit of bounce with stability but ultimately china is sideways to lower. >> thanks, steve. >> let's zero in on this. the china markets weighing heavily on stocks giving some sense of déjà vu when the market dropped back in august. how is today's selloff different from what investors experienced over the summer? joining us mark chandler global head of currency strategy along with anthony chan. welcome to you both. >> thank you. >> mark, i will begin with you. what's the same, what's different in this current pretty steep selloff in china compared to last august? >> two things different, one is we are more used to it now, chinese stock had a big selloff, took the market by surprise back in august, it let a lot of air out of the bubble, since then we have corrected higher, we could get through key technical levels
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to come back off. one thing that's new about it is that we're more used to it now, the second thing i'd say that's different about it, too, is the federal reserve is further along, normally than it was in august. they took a big step in december and barring a disappointing unemployment number we get this friday or first friday in february i think the federal reserve still set to raise interest rates come middle of march. >> anthony, what do you think? when you look at the last year in the chinese market we are appreciably lower than we were in august and even july when that selloff really began, it just picked up pace in the latter part of the summertime. now we've got another market selloff here. are we just as mark says getting used to this here? >> i think mark is right, we're getting used to it but there are big differences, too. what we see is back in august the central bank in china was starting to basically become a lot more aggressive, they've lowered interest rates, reserve requirements, the pboc has also done other things to try to
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stimulate the economy, they've lowered taxes on automobiles, make it easier to buy houses. they are doing a lot to stimulate the economy but one thing you should never lose sight of and that is the link between the equity market and economy is loose. in 2008 the shanghai market dropping 6%, middle of last year the he can equity market up 109% but the economy is growing at 7%. i think it's a fool's errand if you start to link what happens in the economy to the equity market. >> monetary who will si has long and variables -- all the things they started to unleash in the middle of last year are starting to have an impact and will have an impact in 2016. we should be less worried today than we were in august given the selloff. >> regulators were deeply involved in the market this last year in china with all these new mechanisms and now we know on friday they are going to lift that yuan that would allow inn sierds to sell more. and you wonder if they will rethink these circuit breakers
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that ironically took effect today that they had to put into effect. >> i think the circuit breakers -- it's -- even the u.s. we have circuit breakers it's fine-tuning that. some of the selloff in the chinese stock market i know it finished last year on a weak note, part of it is the anticipation that the large shareholders can be sellers, and also the resumption of the ipo market. in some ways the fact that the stock market stabilized gives rise to these taking off some of these measures that anthony was talking about. i do think that we could see as anthony suggested weakness in the chinese stock market but not having much impact on the economy which looks like the official pmi steams to be stabilizing they are making this transition like we are. >> the official pmi, if you could pick the official or market one you will pick the market one. >> i think there is a difference. the u.s. we see this in the u.k., in the eurozone that is the manufacturing sector is weak, service sector still expanding, we will see the u.s. numbers later this week. china is experiencing the same
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thing, weakness in the manufacturing, service sector holding up much better. >> what impact does it have on us here? it has to? >> i think it is real and that's the reason why in the middle of the year the federal reserve paused, but keep in mind that the decline is 7% not 40% like we saw in the middle of the year, this is one day, the first day of the circuit breakers. the circus breakers a lot more aggressive than in the united states, the chinese equity market still going through growing pains, we will have a impact but at the end of the day i think it will be a limited impact over the next couple weeks. >> thank you both. mark chandler and anthony chan. we are about 20 minutes to the close. coming back here the dow down 368 points, a reminder we were down 467 points at the low. >> it's quite a session if that's the come back. >> yeah, right. >> up next it is an about face, last year's winners and losers may already be trading places in this new year. also coming up the wharton
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school's jeremy siegel will speak to us about the global market turmoil from china to the middle east to wall street. can't wait to find out what he thinks. he has been a bull for a long time. we will find out how much resolve he still has when we continue on "closing bell."
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all right. the dow is down 351. keep coming back, all three -- 30 components of the industrial average, caterpillar the least of the worst today, dupont is the big decliner with a selloff of about 5.7% right there. >> from first to worst, wall street may already be betting against a repeat performance by last year's outperformers, amazon and netflix are getting hit hard today. dominic chu joins us with this trading places story. >> it's so interesting because you just put up that dow heat map, we won't see it here but you saw caterpillar almost took a peek at green, caterpillar one of the worst performing stocks in the dow last year, walmart included in there. let's take a look at some of these stocks, with the heat map overall sectorwise, sector performance here the biggest laggards today, financials, healthcare, consumer discretionary and healthcare,
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those four sectors maybe up 2/3 of the overall s&p 500, i should point out also technology, discretionary, healthcare were three of the better performing sectors back in 2015. so the laggards -- the leaders from last year are now some of the laggards at least to start. remember, it's only one day to far and one day does not a trend make. still an interesting way to start the year. if you dig deeper into some of the stocks that are making headlines today, first of all, one of the huge gainers last year, all of a sudden today it's down about 6.5%. as people talk about the first day of trading they have taken away some of the profits at least from netflix another one, doubled over the last year, netflix the same thing, intraday down 4.5%. take a look over the last year, still up 120% but still one day that winner from last year has become a loser so far. and as you talk about the other
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side, the flip side of that coin, we mentioned caterpillar and walmart. take a look at walmart shares intraday because right now we have taken a peek at green. walmart one of the worst performers in the dow last year, a real laggard in the market is showing signs of life at least for one day, this could be short covering, it could be people saying, hey, maybe there is a value there to get in there and buy some shares. we don't know yet. again, only one day, a trend does not make, but still take a look at some of these other beaten down stocks from last year. losers that are becoming winners today. macy's on the retail side of things, up 2.5%. gopro shares, it's been hammered a lot, but still those shares up by 4.5%. as we talk about what's going to happen with themes, they start somewhere. we're not saying overall this is going to continue, but you've got to take that first step, that journey of a thousand miles and right now regardingless of what the positioning was those were some of the actions and happening and we will see if that carries over to the next
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week or so of trading. >> it's a journey of a thousand miles but watch that first step because it's a doozy. >> it has been today, guys, right. absolutely. >> a lot more coming up with gopro this week, consumer electronics show. last year they unveiled sling tv. the landscape changes so quickly. >> it does. >> a lot of gopro focus, autos in focus this week. stay tuned for much more. 12 minutes to go in this session, dow down we can say only 329 but there are still 12 minutes to go with the s&p down 38 and nasdaq 122. >> much more ahead on today's market selloff, one of our favorite segments td ameritrade's chief strategist will tell us what his clusters percent were buying and selling in the month, chipotle was on that list and mcdonald's. were they buying or selling? we will find out when we come back.
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all right. we've come well off the lows of the session here. art cashin just walked by and i had to make him repeat it twice. $2.5 billion to buy going into the close, but he feels -- he sees a lot of possibility of a lot of pairing off of much of that as we go into the close but we have already come off that low. >> here is one devious thing to think about as eric chemi
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pointed out, if you were to buy at the lows today you could almost guarantee you would outperform the s&p for the rest of the year and for professional managers that may matter a lot. >> you have had a good year already in this first day. >> let's start talk with j.j. ken a hand from tj ameritrade. your visit where you tell us what your customers were doing the prior month. i mentioned chipotle and mcdonald's. what were they doing with those two? >> chipotle interestingly they were buyers. >> okay. >> amid all the problems they had, et cetera, food poisoning, but what i find interesting with chipotle is, you know, i may go different places for burritos but everybody i know who is a millennial eats there a lot including my children. people do like that a lot. on the other end of the scale mcdonald's, 52-week highs last month and people lightened up on their mcdonald's positions. that i don't mind seeing at all. you may like mcdonald's as a company, you may have held some of your position but it's good to maybe take some profits and
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we see people reallocate as they head to 2016. >> more broadly as we start out today what are people doing with their stock portfolios, are they generally putting money into the market or especially with bond rates moving around or are they taking it out? >> we definitely saw people putting into the market at the end of last year, one of the things they did was stocks that i feel they had a chance to buy at better levels, apple which was off and one that is a perennial favorite of retail traders, facebook, even fit bit which i think many people thought would do well in the holiday season and disney based on all the hype around "star wars," based on the box office this weekend if that can also roll over into toy sales and park visits could be very, very good, fighting the bad side of what they're seeing on the espn drop. >> the other fang stocks that did a lot of heavy lifting for the markets this last year, facebook and netflix and google which is now alphabet, are your customers enamel noered with
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them as well. >> netflix was a seller last month. so, again, as we saw maybe a rollover for mcdonald's into chipotle, could be you're seeing a little bit of that from netflix into some of the disney properties, they are in similar businesses not exactly the same and i think there is a big question mark around how media will be delivered in the future. with netflix people have done pretty well also. when people are taking profits on stocks i'm happy to see t days like today i think what you're going to end up seeing is people using it as a time to accumulate stocks they like because the biggest mistake we see too many people make is i'm panicking. if you had a plan it's like being a boxer, you get punched in the face right at the beginning and that's what happened to a lot today, you still go with your plan. >> that's for sure. j.j., always good to see. >> you always a pleasure, happy new year. we will come back on what has been a crazy day to start the new year with the closing countdown. >> we have a green chip and it's walmart. after the bell drops in
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chinese factory production contributing to today's massive selloff but some chinese factories those specializing in a military build up are working overtime and could pose a more long lasting threat to the global economy. you're watching cnbc first in business worldwide.
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two and a half minutes left, time for the countdown. first one of the year. bob pisani is with me. what a day it's been. let's start, though, where the fun began, that would be in
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shanghai in china. we have a one week chart just to show you the magnitude of the selloff in that market overnight where they had to halt trading with the market down 7%. it will be very interesting to see how it opens tonight and whether it continues the selling cycle overnight and into tomorrow morning. as for our own market today quite a come back. as you've pointed out, bob, started to ease up a little bit when europe closed at 11:30 eastern but much of that easing has occurred here on the close, we are down just 1.67% after having been down much more than 2.5%. wti, what a wild day that was, the tensions over in the middle east pushed prices higher, they be we got word of a flut in curbing, that pushed prices sharply lower. we are down for the trading day. the ten year, five year, 30 year all moved lower in yield as they bought those bonds and then the vix we are back above 20 to
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start the new year. >> and you might think, gee, there must be huge volume today, down 400 at one point and in fact there wasn't. that was one of the things that disappointed people. the hope was the open we are down big and you get bargain hunters, we had big stocks down, some down 3, 4%, that's a big drop, somebody would come in but it didn't happen. there was no buying interest. there wasn't heavy volume, there wasn't heavy selling but there was no buying interest. nobody even tried to get a little bounce, we moved along on the bottom, came off of the lows once europe closed, obviously selling from there. we are all sitting around saying, isn't there in i bargain hunters left? does nobody have no interest what all? >> do you remember all the dip buying they used to do? >> what's happened at the close there's about a billion dollars to buy at the close, you as i talk all the time, we start paying attention when you get over $500 million. a billion that's definitely interest. there's clearly people trying to nibble at bottoms right now.
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>> all right. well, let's see what happens. tonight with china reopening and whether it starts a cycle again or interrupts it. we'll see. down 280 on the please, we have actini uchlt m ringing the bell at the big board, at the nasdaq it's fitness company telacin.m e big board, at the nasdaq it's fitness company telacin.m ringi big board, at the nasdaq it's fitness company telacium ringine big board, at the nasdaq it's fitness company telacin. welcome to the "closing bell," i'm kelly evans. it is a historic day on wall street. we will see exactly how things tale up, but the dow down 274 points, one of the worst opening to a year, it was down 1.6%. we did avoid having the worst opening session since 1932, the dow had to be down more than 1.8% for that to be the case and at the lows of the session we were down almost 500 points. a come back but only have pretty weak levels and there wasn't much green anywhere to be found,
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the s&p down 30 points, the nasdaq down 104 points or more than 2%. joining today's panel we have mike santoli and kayla tausche at post 9 and for more on the global market selloff "fast money" trader guy adami and peter costa who will join us when he is finished trading. let's head to the floor of the new york stock exchange and get bob pisani's take on the markets today. >> it was a wild day and wild overnight. let's take a look at the major factors. i know a lot of people will blame china for much of it and this does bear a lot of the blame but let's look at a couple of other factors. we had a poor 2015 close in the united states, traders were quite surprised how lackluster and how little interest there was in buying a normally up part of the year. china's pmi number was weak and there was talk about insider selling going ton later in the week over in china, i think that was primarily the reason we saw the drop in china. we have a big saudi arabia conflict and it should have
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affected the markets, particularly the boil market and yet oil reversed most of the gains it saw i will earlier today obviously on supply concerns and a lot of people thought a major geopolitical event and oil can't hold modest gains, that's a major statement about supply overhang. also we had the ism data in the united states, that also was a little weaker than expected showing contraction and again you add it all together and you have little buying interest out there. take a look at the s&p 500, you can see we move steadily down throughout the morning as we not towards the european close the volume lightened up a little bit, it was never on the heavy side but we did lift once europe closed a lilt bit. you can see the lift towards the end of the day, we had roughly a billion dollars to buy at the close. that's a fairly significant number. people were finally showing a little buying interest as we saw stocks down notably. speaking of notably, take a look at some of the sectors, financials were weak all throughout the day, particularly the big money center banks, interest rates on the down side that's not going to help the financials at all. we also saw more interestingly
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old consumer staple names in a did very well last year, a lot of people hiding out in these names last year like johnson & johnson, phillip morris and coal gate also down in line with the rest of the market. the other big group people were feigning hanging out in, the fang names, also to the down side. guys, back to you. >> we will talk more about those names in just a moment. first happy new year, everybody. >> happy new year. >> you were saying there is a couple different ways to look at the wild ride today, it could signify more trouble ahead or maybe it's taking a pause after the long run up that we've seen although last year was already kind of disappointing. >> what's interesting is new year and new dynamics in terms of what seems to have driven trading today. if i told you a week or two ago that oil is going to hold about a dollar above the lows, high yield market will be okay you wouldn't have said dow down 450 at one point during the day. so obviously something else
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going on. it looks like theest are of the world was selling into our markets and later in the day we kind of picked it up. one of the reasons i think you got the late day real was internally the brett was not that bad, you had three to one down breadth, that's not what you would expect on a down 400 day. reverse of last year. so to me today was okay and like i said the rest of the world seems like initiated the selling. >> but a couple hours after the open the breadth was close to six to one. so certainly seems like there was just so much selling pent up selling that either didn't happen last week because people were on vacation or the signs weren't there or valuations weren't there. >> or you had down 6% china down 4% germany and you had that head of steam coming in to sell the index. >> right. >> because also what's interesting is that after the chinese markets got a little footing and some of the data at the end of last year, remember, a lot of people on their list of predictions had maybe a china acceleration. it's funny i wonder how much of
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today is the first day pain trade of all of that. >> we were talking about china being back in a bull market recently as well. today's conversation seems ironic. especially in light of the fact that we know that china's market is evolving, we know there have and will continue to be growing pains and the glitch that happened with the circuit breaker is described as a technical or structural issue is not something that's going to be repeated over and over again which makes it seem a little bizarre that there would be the outside reaction to that. you do have geopolitical tensions coupled in there but it seems like the reaction was outside. >> the erratic action is not something that makes you comfortable. since august and then again in september you have had these macro volatility shocks, the market has not yet absorbed all of them. >> guy, we've been comparing what's happened in today's trading back to what happened this august when the market tumbled 40% in china and things here looked pretty bad for a number of names. would you compare what you're seeing now to what you went to back then? >> you have to compare it. welcome back.
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happy new year. >> happy new year. >> i don't know if today being the first of the year had anything to do with the selling, i don't know, i'm not going to pretend to know. what i will say this, i think i think august 11th that china did one of their first dee valls of their currency and you recall what happened in the ensuing few days it was not pretty, obviously you saw it again today. what interests me the most is first i will say this, relatively speaking u.s. traded pretty well today. you had germany down 4%, probably closed down less than 2%. on a relative bases not bad. they also expected the bond markets to rally more than it did and did did not. what i will say is that the people that dismiss china now and say it's not a big deal are the same people that a year, year and a half ago were saying how important china was as a growth engine for our economy. you can't have it both ways. they are clearly trying to engineer something and to be honest with you i don't think they're suited to do it. >> we bring peter costa into the
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conversation, too. just absorbing what guy was saying about whether china can come to the rescue of its economy or stock market, while that remains the open question what did you see down on the floor today, especially with the big buy order at the close it seemed like. >> do you know what it was, when you look at the market, you look at how it traded on the opening, obviously we were following the rest of the world, but it's more important where it closed and i think that's what people should take away from today. we had a very big swing, down 465, you know, at one point to rally back to be only down 275 points to me is a good sign. and another thing we just brought up about the breadth of the market. i mean, the market down 400 and change we were only like five to one i think was the worst ratio i saw, you guys said it was six to one, the worst i saw was five to one, i've seen where the market was down 120 points and it was eight to one and nine to one. >> and only 100 new lows on the new york stock exchange. >> 100 new lows. i mean, you know, it was wild to watch, but in the end it's
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where -- you know, it where you end at the end of the day. i think the market showed and actually did very well towards the end of the day. >> stay right there. joining the conversation for his take on today's selloff is jeremy siegel now a professor of finance at the wharton school. good to have you back, sir. not a pretty start to the year. what do you make of all of this? >> i'm glad that the first trading day is not a bell weather for the whole year at least historically, it hasn't been a good indicator. i actually think we're going to get 8 to 10% this year. i think it's not going to be as bad as i've seen so much bear h bearishness around right now and i don't think it's going to be all that bad. i think bob pisani had all the reason i do think china -- i mean, 7% is a big movement in the world's second largest economy, we saw what happened in august, everyone is keying off of that. i also think the devaluation of the yuan, it really started sinking, is that going to be a major factor coming up? yeah, there's a lot of short run
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worries and some of these worries are why i don't think janet yellen is going to hike four times this year. >> you don't. >> it's going to be a much more moderate increase in interest rates than a lot of investors fear. >> i thought you were expecting, peter -- i sorry, jeremy, one rate hike per quarter this year. no? >> no. i don't think so. i think there's only going to be really maybe two rate hikes and it really depends on the world economy. if the yuan continues to dee value that's a deflationary flow there china here, yellen is going to be having a hard time reaching the inflation target and we will see what kind of employment and gdp. i saw goldman lowered its estimate -- or jpmorgan lowered its estimate first quarter gdp down to 1% growth. >> right. >> this quarter coming up looks like it will also be just around
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2. i don't think we're going to get four. no, not at all. i think we're going to be much more moderate on the increase. >> i bring it up because actually we had you on last time when we had guy around as well. it was when we were still talking about whether the fed would raise rates in december, we know they did and you seem much more sing win about the u.s. economy at this time. now i feel like you sound like guy. >> i definitely did think december was the time to go up and i do think that the economy is going to be better than a lot of people fear, but i think the low inflation and the fact that we are not going to have a lot of growth is going to stay yellen's hand to keep the rates more moderate. and we are going to get a bounce back and we had a 7% drop in s&p earnings in 2015, the biggest earnings drop outside of a recession that's been recorded. i think we're going to get a bounce of around 8 to 10%, that
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will still only take it back to 2013, '14 levels with interest rates being moderate, i can see the market moving 8 to 10% this year. so i'm not pessimistic at all for the overall economy in the market, but i don't think yellen is going to hike very aggressively at all. >> mr. adami. >> professor siegel, it sounds like and correct me if i'm wrong because i certainly am wrong most of the time but it sounds like a lot of your bullishness is based on the fact you don't think the fed is going to move all that much this year so you're bullish based on the fact that maybe the fed is not in play because the things you're talking about, deflation being i'm porped by china -- by the way, i don't think the chinese are going to stop anytime soon, i think that game will be in play for a long time. when you're talking about economies slowing and a deflationary environment yet you still think stocks can haley 8 to 10%. am i correct? >> don't forget we had -- you
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know, we had about a 10% drop -- 10 to 12% drop because of the energy sector which, by the way, is going to contribute negative earnings to 2015 s&p 500. so this is the first time we have had a negative sector on earnings for an awfully long time. if we get oil stabilizing 35 to 40 we will at least bring it back to a small positive if the dollar doesn't depreciate a lot that head wind will disappear and the increase of the other sectors -- we did have an 8 to 10% outside of the dollar and the oil. so all we need is that -- those two sectors to stabilize to give us 8 to 10% and then with a moderate fed i think we can see the market up a light percentage point. that is my scenario. yes, a lot can go wrong certainly with this. i mean, if oil goes into the 20s, wow, bets are off.
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that's really disruptive, despite the fact that we will all get cheap gasoline. so clearly there's a lot of negatives that can happen. i mean, i heard estimates of 2% on china, gdp growth, i don't think it's that low. i think it's 5 to 6 and i think that that's enough to keep the world economy moving. >> let me just bring mike back into this for a moment. what do you think the market consensus is at this point about rate hikes? it's not like bond yields collapse today if all of a sudden people say they are not going to go four times. >> i think march which is the first time we're contemplating a next move by the fed is so far away in trading terms i don't think today was going to be a big adjustment to that outlook. i definitely don't think the market in aggregate is looking for four moves in year. they don't -- >> i agree. if you look at the futures market they're looking at most two to three. i think, you know, looking a maed i think there will be a big debate in march, not member -- i mean, january. no increase in january, but
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certainly in that march meeting i think there's going to be a big debate and we are going to look to see if we can still be generating 250,000 net jobs given some of the things we've seen here. i think we are going to be seeing some slow down in that also. so i think the fact that not as aggressive fed as we fear, a little bit of stability of all those -- the energy and the other headwinds and we can see 8 to 10% on the earnings and that will -- that will bring about a decent market for 2016. >> we have a lot to look forward to for that first jobs report of the year at least on friday and the employment number in today's ism a little worrisome to your point, professor. thank you for joining us. >> thank you. >> guy adami thank you as well. before we let you go does that make you -- do you want to put your contrarian hat on? >> my contrarian hat is always on. listen, a lot of the things he outlined i totally understand but he's talking about stabilization in an oil market at current levels.
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if i had told you last week you would have some of the rhetoric you've seen out of the middle east and asked you where do you think oil was going to go i think rational person would have said up 2.5, $3 if not 5 given the recent selloff we've en so. oil went lower today. one of the points i made with kayla was we often associate geopolitical risk with commodities going higher. i submit that the geopolitical risk we're seeing is forcing oil lower. somewhat counterintuitive but i think that's what's going on which is extraordinarily dee stabilizing. >> michelle was making that point earlier as well, michelle caruso-cabrera. guy, thanks for joining us. appreciate it as well. more coming up with him and the "fast money" crew today at 5:00. they will be asking jpmorgan's strategist why he thinks buying the dip is over. much more of a special market selloff coverage including should investors be worried about china's military
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than it its economy. lus us clagt tensions between saudi arabia and iran and potential falloff for oil prices. you're watching cnbc, first in business worldwide. falloff for . you're watching cnbc, first in business worldwide. potential fa prices. you're watching cnbc, first in business worldwide. and potentia prices. you're watching cnbc, first in business worldwide.
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welcome back. oil beginning 2016 the same way it ended 2015, on the decline. jackie deangelis is at the nymex with more details. >> not only on the decline, but with lots of volatility today, seeing about a 3% pop early on in the session on geopolitical headlines that were crossing and events that occurred this weekend to close negative $36.76. so what were those headlines that probably would have caused much more of a stir if we were in a situation where we didn't have so much supply on the market with sectarian conflict that heated up after the saudis executed a shia cleric, when we heard about the damaging of the saudi embassy in iran in retaliation for that. then of course the saudi arabians and other gulf countries backing away from diplomatic ties with iran. the concern that conflicts could create a situation iran has threatened before to close the
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strait of who are moose. so it is a key choke point when it comes to oil. knee-jerk reaction was higher and the market digested and thought there's enough oil in storage, enough oil coming from the other producing regions that the market could absorb even a brief conflict there, not that it thinks that that's going to happen. prices restreet treated, we looked at what's happening with u.s. equities, digested what happened with china overnight and ended in a negative result. the volatility in oil prices is going to continue. a lot of traders to bought this little dip today as a short pop on these headlines also said long-term they still feel they should be short oil because the supply -- demand situation doesn't add up even if there's conflict in the middle east. there is a big change, psych cloj cal change when it comes to oil prices. in the past traders have told me headlines like these could send us rallying to $40 it didn't
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happen here and didn't hold. that is very significant, kelly. >> absolutely. jackie, thank you. jackie deangelis at the nymex. what happens to oil if the tensions continue to escalate? brenda schaeffer, ken moore, it's great to have you both with us. brenda, i will begin with you. you know, jackie mentioned iran potentially closing the strait of hormooth. >> geopolitical events unless they actually affect the physical supply of oil, whether it's a major pipeline, a port, a water way, a production plant, we don't see a direct translation of the geopolitical events into the oil price. but things -- you know, things are evolving and iran is reentering the oil market, you know, just at a time that there's geopolitical competition, conflict with saudi
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arabia. saudi arabia has -- iran has all the interest in the world right now to actually move the conflict between iran and saudi arabia into the domestic arena in saudi arabia and if that happens, if, for instance, there is a mega attack in saudi arabia on an oil processing plant, on a field we could still see a huge implication for the oil price. so it's definitely something to be watched. >> right. but it would take kind of a really physical strike to supply. ken, would you agree and how likely would a move like that be whether it comes in saudi territory as it was suggested or if iran were to make a move like jackie suggested? >> i don't think a strike in saudi arabia is even necessary. the flash point right now, kelly, is bahrain. bahrain is connected to the mainland of saudi arabia by a causeway, it has a sunni minority royal family, it has a shiite majority population, the saudis are paranoid about bahrain for one reason, it is connected to the province in
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which they produce the majority of their oil, it is also the only province in saudi arabia that has a majority shiite population. in 1979 when the ayatollah had a revolution bringing will a shiite reg mean on the other side of the water this province in saudi arabia erupted and read had to put it down by force of arms. this is the real flash point. it has nothing at the moment to do with the immediate sourcing of oil, it has to do with the changing dynamics and those changing dynamics are anybody's guess at this point. >> brenda, if we don't get some kind of effect directly on the physical supply or transport of oil right here do you think the market is correct in starting to think that the way the game theory plays out is that they will all pump that much more aggressively, in other words, this is net additive to supply if we don't have some kind of military action or other interruption of transport? >> yeah, i agree with you. i think in the last year and a
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half what we're learning is stick to the fundamentals, if it affects supply and demand like today, with he see data coming out of china that affects oil demand so therefore -- so therefore the price goes down. if it doesn't affect, like what's happening currently between iran and saudi arabia it shouldn't be factored into the oil price. again, we need to watch it because iran part of its tactic as it reenters the oil will be to do everything to jack that price up and that could include instability in saudi arabia or other neighbors. also many were anticipating in the last couple days, we saw a big article in the "wall street journal" opec is on the eve of a decision to coordinate and cut back. this was never in the cards, saudi arabia was knots going to cut back production in order only for its vie valls like iran, russia, others to benefit. it was not in the cards. >> that goes back to why we're seeing prices move lower yet again today with this backdrop.
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thank you both for nous. tech stocks among the biggest losers in this selloff. find out whether this one red hot sector's run is coming to a run. gold appears to be regaining some of its safety trade status. will it keep helping the precious metal. that's coming up on the "closing bell."
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well, the sellers were out in full force to kick off the first trading day of the year. the nasdaq was the biggest loser and bertha coombs has more details. >> among the worst performing sectors were the biotech sector, that was the biggest decliner on three times the average daily volume, also three times the average daily volume in the selloff for small caps. biotechs were the big winners, last year small caps were among the big losers. those are the usual suspects people wanted to sell today. tech not quite as a bad, is a chinese listed e-commerce stock, but also netflix, amazon both getting down grades and tesla with disappointing auto results for the december quarter, but take a look at apple, that's the real interesting story today, was not enough to lift the nasdaq
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nonetheless a remarkable turn around, a reversal after hitting lows of about last august after that big alleyoff we saw august 25th, it held those lows and turned back around. and today also one of the big standout stocks was smith and wessen with the president set to announce but attempts to try to curb and enforce gun control, kelly, that stock has been surging. back to you. >> all right. bertha, thank you for now. bertha coombs. our next guest says 2016 could be a challenging year for tech investors. it certainly started that way. alex joins us from j & p securities. where specifically do you most have concerns? >> well, kelly, the problem is the challenging macro economic backdrop. the fundamentals for technology are strong right now, innovation is at a peak right now across a range of things like ubiquitous
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communications that internet of things, virtual reality, 2016 will be the year of virtual real i have, autonomous driving coming to us, robotics and drones and now you have the 4 k high dynamic range upgrade cycle in tvs. exciting back dron of technologies against a very challenging head wind in the macro economic outlook. >> so your point is when people look today and go, wait a minute, what happened to apple, i guess it closed a little positive, but what's going on with the fang stocks so to speak your point would be don't blame them, blame the weak global growth environment? >> well, kelly, jmp securities would argue you want to be selective right now, a name like apple is a big liquid safe port in the storm right now. great balance sheet. attractive dividend yield. you can understand in an environment like this why that would be up. another name that was up today it's our topic, sky works, a supplier to apple and leader in terms of connecting everything wirelessly. so if investors look they can find bargains in this
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environment and that's where we would direct them to invest. >> okay. >> it's interesting you talk about bargains, alex, because apple for a long time has been described as a cheap stock, as a relative to a multiple of the s&p and a relative to its own earnings, but i'm just wondering if you think that 2016 is the year that investors lose patience with some of the multiples on what were high flying names for the last two or three years. >> great point, kayla. i think you see that in a name like tesla that came under pressure today with just a whisker of a miss to the midpoint of their guidance. so in the sense of apple right here, it is a bell weather, it's a great company, they've got the top handset in smart phones, but even there, they are going to need to show more imagination in this environment in order for the stock to really get back to its highs, at least that's our opinion right now. so nice place to maybe hide for a time if you're looking for growth we would point out names like sky works or names like
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invidia that is a leader in virtual reality and autonomous driving. you can find a names like apple for security. >> is it safe to do any deep bargain hunting? you saw gopro up a little bit, maybe fit bit, these consumer ones that lost their following? >> yeah, we like gopro because we think it's been thrown under the bus in terms of just being an action capture device but it's actually more than that, they are a leader in this emerging space of virtual reality. something like 99% of the content out there is created either with gopro cameras or gopro software, we think that's underappreciated. this is going to be the year that gopro releases its drone. there's a stock that's been grossly underperforming most of last year and an opportunity to step in like we saw today in the name and maybe pick it up in an attractive valuation. >> great point, alex, one that's been made by a virtual reality
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fan here about gopro. time for a consumer news update. back over to sue herrera. >> here is what's happening this hour. the justice department suing volkswagen seeking billions of dollars in penalties over its alleged cheating on emissions tests involving some 580,000 diesel engine vehicles sold in the u.s. the lawsuits seeks more than $32,000 in penalties per vehicle adding up to more than $18 billion. a tri-rail train hit a garbage truck in florida hampering service to palm beach county and injuring more than 20 passengers. the train was carrying between 80 to 90 passengers at the time. the driver of the garbage truck jumped out of the vehicle, luckily he was not hurt. cosby lawyers asking a federal judge to delay a deposition of camille cosby in a deaf nation lawsuit brought by seven women who became bill cosby sexually abused them. and could this be the end of lost luggage? five lebanese teenagers have
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designed a smart suitcase that follows the owners, the suitcase is equipped with an hd camera, infrared sensors that enable it to follow the user and the user can control the movements through a mobile app. why didn't i think of that? back to you. >> i've got to tell you that's the not the problem, o though. people haven't losing their luggage in the airport. >> they're losing it on the way up from the claim. >> and i don't know how negotiating the long lines in the airport with something that you can control by a mobile app would work, but more power to them. >> we'll take it, though. you never know. thank you, sue. >> thanks, kelly. is the selloff the beginning of the end for the seven year bull market that's coming up. first forget fears about china's economy find out why our next guest says china's military to be the bigger threat to global markets when we come back.
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welcome back. what a day it was. we did finish well off the lows of a decline of 476 points but the dow went out with a decline of 276. 1.6%, i think it was the worst start for markets since 2008. the s&p down 32 points, that's 1.5%, the nasdaq the worst
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performer, down 104. that was better than 2%. and a big focus on china today moving those markets. but our next guest says the biggest threat to the u.s. is not china's economy per se but it's military. joining us is peter navarro professor of economics at the university of california irvine and author of crouching tiger. >> good to be here. i think that today is an exclamation point on the idea that buy and hold is dead, a lot of people got hurt today. i think this is going to be a new age of geopolitical investing and things like the rise of the chinese military are going to have tremendous impacts on people's investment portfolios. i think the template here, for example, is russia taking the crimea and going into the ukraine. if you were on top of that an anticipatory short on the russian ruble would have netted something like 50% gain. the big news today coming out the china for me wasn't that it
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was slow manufacturing, it was fact that china landed a military plane on one of these artificial islands in the south china sea that we've got american war ships circling around. >> i'm not sure buy and hold is dead, maybe that's a separate conversation and or maybe you can market time russia's devaluation, regarding what china militarily is up to, what are you saying is taking place and what -- >> sure. >> what involved in that specifically poses a threat that investors need to be aware of? >> over the last 15 years as we had huge budget -- trade deficits with china they basically used that money to assemble what will soon be the most powerful military in the world. they've got the fastest growing fleet of submarines, largest inventory of sea mines, they basically ripped off our f-35 and f-22 plans in building the j-20. and the worst thing, kelly, arguably is their missile arsenal which is the most
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diverse and largest in the world, it runs from the tactical in theater all the way to the inter couldn't then at that time. the problem is like russia china is an expansionist country that claims 80% of the south chinese sea and tie wand and right now they are assembling the military to challenge that. if you're off shoring production to china or you have supply chain in asia as an investor or business executive you darn well better be looking at that. >> especially if you have suppliers in taiwan. mike. >> peter, i wondered are we not so intertwined economically with china that china's assertions of regional military power don't necessarily go up to the edge of threatening the relationship with us or our allies? >> mike, that's been the argument basically going back to nixon and kissinger that somehow economic engagement will save us from war. it's the trade trump invade.
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historically we know that's wrong based on world war i kaiser germany and great britain had the same kind of intertwining relationship. my worry that a weak china is more dangerous than a strong china because it's a wag the dog phenomenon. every time things get dicey within the borders of china they create an enemy like japan or the u.s. i think it would be a dangerous thing for the world to count on economic engagement with china to keep the peace. there's nothing in evidence right now slowing their military down in favor of that argument. >> peter, would you say that china's focus on building up its soft power, then, isn't working? >> great question. i think in 2008 when the markets crashed here and our economy went down china saw an opening, a defaults opening and they abandoned all sense of their peaceful rise. they were very effective prior to that wielding soft power but right now there isn't a single
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country in asia that trusts china. if you look at china it's basically only got countries like burma and laos in its camp, all the other countries in asia are siding with america. soft power in asia is no longer very effective tool. it's effective in africa, it's effective in latin america, but, again, i think -- i'm much more worried about hard power. you look at their arsenal -- and we are arrogant, we think that just because we have a big military we're going to beat them. guess what, they have stolen every weapons design that we have across our armed forces and they've got the manufacturing floor. we beat the nazis and japanese in world war ii with our manufacturing might. where has that gone? to chung due and shanghai and beijing. >> that's a point, peter. thanks for joining us, peter navarro there. now we have a news alert on yahoo. josh lipton has more. what's happening, josh? >> kelly, some news today on yahoo.
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yahoo deciding to shut down yahoo screen, this was reported by variety, this is the video hub have a hoo launched a couple years ago to bring together the original and indicated programming so everything from streaming nfl games to those clips of "saturday night live," apparently the plan now is to move the video properties from yahoo screen to the company's digital magazines, maybe the first part of a bigger, broader restructuring at the company. we know this comes at a time when marissa mayer facing a number of challenges, a steady stream of executives left the company. of course, the decision to cancel that spin off of the stake in alibaba, instead spinning off yahoo core and a stock price that has been under real pressure, that stock down about 40% over the past 12 months. back to you. >> all right, josh. i have to confess what is screen? >> screen -- of course, i used to work at yahoo before a few months ago. screen was this effort to centralize where you could find
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video on yahoo's platform from all the different verticals and media properties. both originals also some indicated stuff they took over some sitcom community, for example, streamed nfl game. i think what they're doing is basically saying -- what i think the industry has found is that portals are no longer working and this was effectively a video portal. >> this was an app or a url. >> it was an app, a website. >> okay. >> it was kind of like kind of virtual television, let's see what's on kind of thing. >> the content most of it is still there. >> it will still be there, just in the individual -- >> okay. a global selloff mark k the first trading day of 2016, is this a resting bull market or a bear slowly awakening? that's next.
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welcome back. stocks really tumbling today, the dow closing down 276 points and it is the worst start to the year since january 2008. for more on what this does mean for the full year and if the market can repair itself we turn to mike santoli and bob pisani. mike, you know, there's two camps here and a lot of people are wondering how significant is today's selloff? >> there's two camps coming into this year, the reason why two camps are evenly divided saying this is a bull market that shows resilience last year in staying flat or it's a bear market potentially in the making because of so many the majority of stocks really had their own individual bear phases.
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i do think the reason is because you have a flat market and because you have these opposing currents. so i don't think you can come to a verdict right now except to acknowledge that we have had these periods in the past where you had a long stretch of a flat index with really a lot of pain happening below the surface. you have had instances when they did kind of -- when the market did right itself and essentially sum it up another leg higher, a little more strength, that was 94, 95, 2005 was a flat year ahead of the prior phase of the bull market and going back to 20 20111, flat year, tremendous macro shocks and a choppy election year. >> we know people will see one simple headline, stocks worst start to the year since 2008, they will see 2008 and go, oh, my god. >> i think mike made a food point about different ways you can go. you had a good article on cnbc, you looked at both sides of this, but i tend to take the idea the side that the barrage of stocks we've seen, the oil
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markets and china, we are still not down very much, the market has held up remarkably well given the ba lablng. now we have a major geopolitical event, the saudi iran split that could have serious repercussions and yet today oil couldn't sustain a rally. i found that remarkable. everyone i called said this is a sign nobody believes that the supply problems will go away even with this potential conflict. looking out here, this time last year do you know what the consensus was for earnings, up 8% in 2015, it all faded away, do you know what the son census is for 2016, up 8%, it's the exact same number so people are looking at this and saying are we going to have the same repeat, but a lot of people don't have as much faith we would have that second half of the year turn around we were supposed to have in 2015. >> if you take out energy and the strong dollar we did have 8 to 10%. >> the market after a tough year didn't get any cheaper and i think that's one of the issues. you really do of to see earnings start to rebound, especially in
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the cyclical areas to have some reason to say, okay, stocks were overdone to the down side at least in the market. >> also the point, kayla, being last year it was freight the market did x, the market was basically facebook, facebook, a google/alphabet. even if those are taking a breather, more broader participation in the move higher. >> if we are going to x out numbers for a rosie number, we should be xing out tech because there are these biases in the market that push it one way or another. i thought the most interesting points in your story was the observation that the smart money was trimming their portfolio toward the end of every month because they didn't have conviction of where the market would go from there. that was an important sentiment. >> that was one way to lead the sentiment. it looked like sellers were in control most of the year last year.
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one of the real positives to take away after that stretch of time that expectations have gotten relatively low and no one is expecting the market to run-off on the upside. >> but where does that leave us. we were 2000, 2100 for most of last year except for the july and august period. we are right at that level right now. we could easily move down to the 1850 to 2000 where we traded in july and august and the market seems to be hinting it wants to trade toward the lower end of the range right now. we don't have the earnings support and the fed either. so it is sort of understandable where there is this real ambivalence about the market. and yet at the close, people were trying to buy bargains. there was a billion dollars to buy at the close. that is a statistically significant enough. >> that is what people were saying. it matters how you close. and that is how we could take it today. thank you bob and mark. and catch up the article on
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cnbc/pro. today investors searching for safety. if t if the beaten down metal is set to shine this year. we'll tell you after this.
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welcome back. gold today getting a boost as investors are seeking some safety amid the selloff. nafta getting beaten down the
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past few years as the yellow metal poised for a rally in 2016. seema mody is running through the numbers. she joins us now. >> and kelly, that is the big debate into the new year. will gold regain its shine after a 10% decline in 2015. global worries are seen as the catalyst behind today's bounce with middle east tensions. and gold hitting the highest levels in two weeks sending the shares of gold miners higher on the first day of the year. but wall street still skeptical. the former ceiling between 2007 and 2009, strategists recommend selling strength into the $1,100 resistance level. and they say technicals look weak. but the lindsay group believe the stronger dorl story will be put to the test if the fed does not hike rates again this year.
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peter bookfar saying they are bullish for gold an this is a great set-up for resumption of the gold bull market. so far the bears have been in control over the last three years. >> and related equity names. green spots in the names today. thank you, seema mody. today was the worst first trading year for the dow since 2008. up next, what key figures to watch tomorrow. woah! father, why can't we have directv like the macgregors do? we're settlers, son. we settle for things. like having cable instead of directv. hey, jebediah, how's it going? working the land. hoping for a fertile spring. all right. so we have to live with lower customer satisfaction? i'm afraid so. now go churn us some butter, boy, and then make your own clothes. yes, sir. (vo) don't be a settler. get rid of cable and upgrade to directv. call 1-800-directv. you grab your 10-gallon
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a deep dive for china's tech titans. what is the next move for investors now. strategy from the experts on squawk alley tomorrow at 11:00 eastern. cnbc into welcome back. as we take stock of the ugly day for stocks today. what should investors be watching tomorrow and the rest of the week to see us through. mike, what do you think? >> we have to watch shanghai. we are not back on the treadmill that nothing matters. if it is sloppy, the market will have a hard time bouncing. if it is okay, i think it will be a turn-around on tuesday. pent-up buying. and 2005 level on the s&p 500, that was the december low. if you close before the december low in january, not a great sign. one of the rules of thumb that might have some merit. >> only seven points away. >> kayla. >> december auto sales. record year. could be good for the
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automatics, dealerships and the banks and consumers taking stock of lower gas prices to get us across the line of that record year. >> that is a good point. just look liking for bright names in the market. autos have been the bright spot in this economy. thank you so much. mike and kayla. "fast money" begins right now. and we are live from the nasdaq market side overlooking times square. this is "fast money." i'm melissa lee. your traders on the desk. tonight on "fast," the boldest call of the day. jp morgan saying the era of buying the dip is over. that strategist will join us live to explain what has him so bearish on stocks in 2016. plus chaos, the middle east sending oil on a wild ride today. but the commodities king dennis gartman said there is a secret signal the bottom is in. he joins us this hour. but first a major selloff, getting slammed on the first day of the trading year. all ten sectors lower on the day, led by


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