tv Mornings With Maria Bartiromo FOX Business January 7, 2016 6:00am-9:01am EST
3%. you can see. the major averages there. worse day since september. losses across the board. dax and germany more than 3%. and we are expecting significant weakness here in the united states. the dow down 400 points. nasdaq all showing declines. markets off to their worst start of 2008, dow is already lost in three trading days more than 500 points, percentage points in nasdaq and dow and s&p which were weak last year. oil under selling pressure again this morning. crude drop to go a 12-year low overnight, right around $33 a barrel right now but we are watching the critical 30-dollar mark. could you see that happen today? we will be following all the market action and what it means to your money but right here
right now jo lin ken. >> jo ling: we want to show you what happened there. the hang seng was also down and you can also see across asia that's really pulled the markets down and stocks in europe continuing to sink right now. also triggered monday with the weak manufacturing number if you remember and the chinese yuan continuing to slide every single day. injected $20 billion in short-term on monday. that steadied the market yesterday but the foreign exchangers dropped by $108 billion to 3.8 trillion to break the fall of the un. that was more than economist were expecting, so you see this -- all these measures being
taken. very expensive measures, they don't hold and they're continuing to dig a hole that traders and investors don't like. >> dagen: i will say one of the things that surprised me this morning. china stock markets shortest trading day in 25-year history. it shows you how new the country is to trying to operate a market. our first stock exchange was founded in philadelphia in the late 1700's but i think -- i want to get the panel in here. we are going to cover everything that you need to know about the market. i want to chart with china -- start with china. the more the try to stop trading the more they create selling pressure. would it be better if they got out of the way? >> that number reserve is dropping by $108 billion, that's
the biggest number on a monthly basis ever. as we like to ever, ever is a long time and that gets people anxious and the cause factor is that china cannot create demand, if you can't create demand you're just creating stories, if you're creating a story that the stock market can't go down, people won't believe. >> you know, you look at what they're trying to do, come in and stop people from selling, one thing that's not going to help china is going in and telling people that you can't sell your shares. that doesn't work. when they open up markets, we will be talking down 5-10% morning because want to rush to the exits. i don't know how they fix it but what they're doing right now to try to stem this is not working. >> dagen: i want to point out some of the selling pressure was created in the week because the six-month ban on investors selling shares would expire tomorrow. what do they do, they come in the six-month ban is expiring but now we have a three-month ban that they put in place.
you can't sell more than 1% of total shares outstanding among the other restrictions. >> creates a huge overhang. the problems with the regulators and guys running the stock market, it's bumbling, they don't know what they're doing right here. they are starting things. they're throwing things against the wall. circuit breakers, what happens, traders like the brake things. you better leave that pound alone, oh, yeah. [laughter] >> michael: what do you think is going on here. down 5%. we are open down 7, okay, we are done, let's go home. >> keith: they don't know what they're doing on the currency policy front either. anyone who knows anything that's been to china lately has talked to members, they said we want to devalue the yuan by 10%.
so are you or are you you not? they have no idea how they're going to the 10-15%. you have rookies trying to the what americans have done for a long time, which by the way isn't working very well here either. >> dagen: investor and publisher, mark, good to see you this morning. i will give you the opportunity to tell you i told you say. >> no, i never say that but basically what i maintained over the two years was that chinese economy who was accelerating and
indicators showing and biggest number by public and number two i maintained that chinas has bubble and concerning the share market, what is interesting a lot of large shareholders went to foreign banks included state banks and said, look, i give you shares but you lend me, say, a few hundred million dollars and obviously after the share market went down these loans are no longer covered. and i think they last for quite some time. >> dagen: marc, start explaining to us. i get this from professionals investors, i get it from individuals on twitter, you name it. what does that mean for our market, how bad can it get, i mean stocks, even our fixed
income market, how bad can it get, how long could it last? >> well, basically in america there are lots of companies that have nothing at all to do with china. there are companies that have something to do with china directly because they're gross, car sales in china were booming in the last five years and now they've been slowing down so car manufacturers, germans, gm, they will have less earnings throughout -- coming out of china but where china really comes in is that demands in china, the economy has slowed down, depressed commodity price, russia, central asia, africa, all these economies have slowed down meaningfully or are already
in recession and so earnings from the emerging world is going to be very negative for the next one, two, three years. >> jo ling: mark i wanted to know looking at the companies that you're referencing, hitting 2.3% right now. it's worse since the crash in 2004, companies like that, how do you fire cast the outlooks? apple has said that it's reliant on the chinese market to do well. >> well, i think apple has different problems. i think when they started with mac and with notebook and with iphone it was cool to have these devices. nowadays everybody has them already and it's not something
very fashionable to have them. the price of iphones is going to come down, not a little but massively. it's like the first pc's, the authorities of this world, the pricing then came off and a lot of these companies went out of business around the success story was nokia. where is nokia today? that will weigh on apple share. they're not expensive but the earnings are inflating and the earnings in my view will come down. >> keith: back to what you call a colossal credit bubble, you secret markets can react fully and then risk happens all at once d you think that's about to happen right now or we are going
to waddle on through this? >> we never know how far it goes. it could be really ugly. if i look at the u.s. stock market. on a near-term basis, monthly basis, as of today's opening, the futures are down, the dow is down for something like 400 points, the market is incredibly oversold. so i think we will get the rebound for the rest of the month, when we will get it right from here and lower levels, i'm not too sure. keep in mind that's between 2,050 and 2 thousands 34 on the s&p, 2,034 high in the month of may of last year. there's a lot of supply of share and so the upside is limited but
ballooninger term is quite significant. >> dagen: marc, it was great to talk to you. any time. please stop by. >> thank you very much. >> dagen: marc fabber. it's about china. it's about a slowing u.s. economy, a u.s. economy that looks to be struggling, witness the price of oil. oil this morning broke the 33-dollar a barrel mark. falling to lowest level. phil, what are you watching this morning in terms of factors that could be hitting oil, including china, of course? >> phil: china obviously is number one. you have also have the go political story which people are taking as a negative, tensions between iran and saudi arabia, there's going to be a production cut and obviously with increased
economic tensions that's going to be harder to see a production cut so you have the slowing economy, you have this possibility that the world is going to continue to be flooded with oil and actually that tension between saudi arabia and iran just took another turn, there was a report right now that because saudi had cut diplomatic relations with iran, iran just canceled doing any business with saudi arabia, they will not import goods and the tension has been high. that has been a backdrop. everything that could go wrong with this market is going wrong. usually when you get the bad news, sometimes a sign that we are near bottom. we did see a little bit of a bounce today. maybe there's a little hope there's stability, but you know, until we get a real sense of what's happening in china, i don't know that you can say anything is for certain at this point. >> dagen: phil, i want to talk about oil the 33-barrel market.
maybe this has something to do with it. iran has accused saudi arabia of missile attack on embassy in yemen. so iran is accusing saudi arabia of missile attack of embassy in yemen and that could be -- maybe you actually start to see those tensions give support to the cost of crude here. >> phil: yeah, those tensions initially have been taken by the market because of the production side of the equation. if we continue to see a military aspect come into this, if we see the straight shut down or saudi production we will see prices spike. there's no doubt about it. right now there's this fall sense of security that no matter happens in the globe we have plenty of oil around. that perception can change very quickly because the world cannot easily replace saudi arabia oil.
>> dagen: yesterday what we saw in terms of the economic weakness and we had -- however you want to read into it the world bank cut is 2016 global workforce forecast, cut to 2.9% which doesn't look bad but you look at gasoline demand came out yesterday and it didn't look so great here in the united states. you saw a major selloff in gasoline futures. that's more downside pressure. >> phil: it is. i caution about those demand figures about gasoline. that was impacted by the flooding in the midwest. you look at gasoline over the year, demand growth for gasoline is the highest we have seen in 30 years. short-term was a concern for the market yesterday. i think the market misinterpreted that. if you look at autosales on the other hand people are buying bigger and bigger cars.
that should go well assuming our economy doesn't go back into the recession because of what's going on in the rest of the globe. >> keith: you see these people talking about the oil price, pick up any chart of the commodity price. you can talk about cattle, you can talk about oil, copper down another 3% this morning. they continue to say that it's transitory. if they use the same dictionary that i use t federal reserve is sitting here saying, look, williams from the san francisco fed this week, basically said china doesn't matter, we don't really target the dollar and by the way, we think that commodity prices are transitory. these things are very much -- i dare to say lies relative to what mr. marc is saying to us. when i look at the commodity move, amplifies what we have been talking about which deflation. >> dagen: the bigger picture
question is this payback from all of the loose money and it went on for years, but it's still loose but we see a little bit of tightening in the united states. it can only go on for so long. >> michael: it was to hold the hand up and say, everything is going to be all right, there's not going to be more disasters. that game is over. again, there's lack of communication, i give the current fed a d minus for communication. we talk about the strong dollar and the effect it has on the economy and markets, it's right in there. what is this? the fact of the matter is the feds are making themselves irrelevant, game over, as for commodities, there's this oversupply here and we can talk about the saudis all we want and
there's producers waiting in the wings when oil has to squeeze, that's why oil is under pressure. where is a demand? a.ly that's -- apparently that's not enough. >> mike: i like to see that. that's free market at work. you see it coming down. to phil's point, you get a lot of negative news this morning. so we have been here in the low to mid-30's for some time. we are not china here in the u.s. i would just like to point that out. we are not down 7%. >> dagen: we are not communist. we have that going for us. >> mike: our markets are not the chinese markets. yes, this is a horrible start to the year but this isn't china, we have real issues out there. i'm more of a camp looking this
as an opportunity versus going to hide in the pillow. >> jo ling: what do yo when you wake up this morning and see the portfolio, what do you guys recommend? >> keith: well it's not 2008, it's actually worse than 2008 in the first year. i have been saying for a while the market is not just a stock market. the bond market has been fantastic performer. if you're in the view that global slows, you will buy a slow-growing asset. i think you have to have to get out of the data stuff and move into the snail that's been treasury. >> jo ling: look at the whole picture. >> keith: you see the quote 2.4%. after every single publication that interest rates are going up, you know what they have done, they are down.
>> you have too much risk. if it's keeping you at night, you want to be in something. you get approximately 10% annual returns, market goes up 3 out of every 4 years, if you have a longer-term view and you're comfortable the portfolio you can sit there and write a patch. you're not set up correctly. >> dagen: i want to talk about what looks good in the environment. wal-mart, i went back to look at wal-mart's stock. that stock was up 28% so last about a quarter of the value. it had four double-digit years. like yesterday it was doing well. i know it has exposure down the globe. >> keith: after something has been crashing, the probability
to continue to crash goes down. the reality is that the things that actually soldoff first, wal-mart has been a good reflection of the 50% of american that is have no money again in their retirement accounts. people don't have any money out there. the economy is slowing. the stock has represented that. macy's last night comes down with down 5% sales. everybody is shopping at amazon. amazon is 50 billion in u.s. sales. so you can tell whatever story you want, mr. market tends to get it right and it has gotten right in wal-mart. it'll be interesting in that wal-mart in particular. >> dagen: this does bug me and michael i want to get you in on this and whatever guys you want to talk about and phil is standing by. you look at macy's chart, if you look at the
one-year chart that stock fell off a cliff last year and how did you not know and turns around and blames the weak sales on the weather. well, the weather was pretty good. the entire store was stuffed with puffy coats. >> jo ling: that's what you continue to hear. the blame game. >> dagen: it's the biggest excuse. [laughter] >> michael: macy's is what i would call a mike stock. when macy's was at its highest -- >> dagen: look at the stock chart last year. >> michael: guys, why is macy's up every day? i would get, mike, it's a real-estate story. [laughter] >> michael: we see it happens. oh, it's the weather.
no one likes puffy coats anymore. sorry. that's what happens with these stocks. they get too popular and they're gone. over and over again. >> dagen: we talk about the individual is completely in charge in terms of investing, if you're talking about the names that everyone knows. last year big retailers do not break fall sales before thanksgiving unless their world looks like it's filled with hurt. that's what happened with all the major department retail chains. >> keith: macy's has real problems. you see a strong move for macy's. macy's was being priceds -- priced as a major technology
company. last year they started getting comp versus amazon. now you get job cuts last night, you get down on earnings, that's not good for macy's. i wouldn't want it as this goes down, i don't want to make a bet on macy's. >> dagen: psychological it seems. if you think about what people are shopping, discussing -- >> keith: it's unkanye how mr. market gets this right. it was the all-time for story telling at macy's but actually if you look at the service numbers yesterday t consumer is great, that's always the case at the end of an economic cycle.
peeked what month? july. >> dagen: i looked at your charts. >> keith: all of these things employment peaked at 3.3%. all of these things not ironically peaked. >> dagen: i want to bring phil back. >> michael: that blue pine peaked in 2011. where are we now, where are we going from here we have to consider as well. >> dagen: phil i want to bring oil and gasoline prices back into the consumer. i will never argue that lower oil prices are horrible for americans. i will never argue that. i think that it's a huge benefit. i've read a lot of research on the benefit to americans levent aycicek year of this giant drop in the cost of crude, lowest in
years, about 115 billion-dollar winfall for consumers, savings for every driver and the numbers are all over the place, consumers spent at least half of that if not more -- there was a report out that customer growth partners did that said that they spent four fifths of that cash on things like booze, cigarette and junk food. that benefits somebody. >> phil: that's what i spend my money on, my savings on. basically i agree with you in general. you look at those numbers, the hard numbers say, hey, that's great, low gasoline prices are great. when you look at what's happening in the global stock markets right now, when oil is reflective of a global economy that's falling apart and the possibility that it could lead to a recession that could cost these people those jobs, gasoline prices being low don't feel that good. we keep talking about 2008. hey, we just took about the 2008
low on gasoline prices, isn't it great. i don't think anybody -- you know, i think they would rather much have 2007 gasoline prices at $4 a gallon and be making the type of money they were making in 2006 and 2007 before the crash than having low gasoline prices and not having a job. >> dagen: let's talk about some of the stocks that are down premarket. one of the things that's clearly weighing on premarkets is the fact that a lot of stocks -- a few select stocks ran up sharply last year and even broadly speaking stocks looked expensive and overvalued and in premarket trading here some of the stocks that are down, nike off by 2.8%, citigroup, amazon and then facebook off nearly 3%. that's a little more than you're seeing in terms of the selling of major marketing averages. the futures are off 2.2 or 2.3.
nasdaq futures are getting hit and to michael's point what sold off the most, the stuff that did okay last year. look at the nasdaq compared to s&p and dow. it is down more than those other two. >> michael: now you have ned davis that says nice work. all these funds are out there, here is a research we did. we can own 30 stocks, let me tell you a little story. one to have big bond managers was in a meeting once and was talking about creating a 10-20 stock portfolio, i have a better idea, how about we have a fund that invests in one stock, what do you guys think of that? what do you think of that idea, guys? famous guy but wasn't bill. you would think so.
>> keith: the main part about the chart -- >> dagen: nike one of the biggest winners. >> keith: they grew in a slow-growing victim. to -- >> keith: you had the horse men in 2007. that's 98% of stocks that you could buy or sell. that's a crash across the board, the average decline. that's why you see so many money managerrers, a lot of people didn't make the right stocks for that matter and are in serious duress. you're not allowed to have a bad year this year and you to get out of stuff pretty quickly here. >> mike: the first thing people
are going to sell are the winners. it's easier to sell a winner versus throwing the towel into something that was wrong. i love the stock long-term, but it does have exposure at these levels. >> jo ling: say this continues for the next week or two, how do these companies rework because you have wal-mart, even though it's a big winner, definitely failing against ma'am zone, so to speak and you have nike and stocks that you love so much, are there any internal structural restrategies? ..
this is never happen in recorded history. we may have to pay the price like we've never paid in recorded history. this cannot go on forever. central banks will come to their senses which is unlikely or the market will force them to come to their senses. dagen: the reaction by the central banks that use a never rare but the united states is to just do more. if they continue to do more, are they powerless? do they have no mojo or juice left that they can continue to print money, buying bonds if you will. or has that stopped working? >> there comes a time when the market is bigger than the central bank in the markets as we don't care. looks like we are going to have those times in 2016 and 2017. i don't want that garbage anymore. do you?
>> in terms of u.s. treasury, if seems like a haven at least recently. i know how you feel about the u.s. government. you talked about looking for more junk which he started junking months year. you are not doing that with other forms of higher quality credits at this point. i know you have your eye on that. >> yes i do. at the moment i am sure the stocks would never go down. but i am long the u.s. dollar. i have a huge position on the long side of the u.s. dollar because people are going to flee to what they think is a safe haven and the u.s. dollar is not the safe haven people think it is. i will not buy the yen or the euro, so here i am. >> jim, hasn't this been basically the epicenter of the commodity risk is what you said is absolutely right. that devalue get stronger in
commodities and have been a place you just don't want to be. >> well, that is exactly right. often in history, when dollars go up, commodities go down as you well know. my plan, not that i know what i am doing, my thought is the dollar will turn into a very overvalued item. it may turn into a bubble at which point i will sell my dollars and probably buy gold or the gold will be down at that point. i have made many plants in my life and the market plunge me in the face many times and says we are smarter than you are. that is the way of looking at it right now. gold commodities when i sell my dollars. that could be a year from now. dagen: gold is up about $7 an ounce. it did top the 1100-dollar mark slightly below the level right now. in terms of gold because you invest in all commodities, and you've been focusing on agricultural commodities as long
as i've known you. with gold, white gold? it just doesn't have the uses and the up occasion in our lives that other commodities to whether it screens, whether it is other metals. >> well, you can buy silver. if i were buying one or two at the moment i would die silver because it is down more than gold. many people say -- i'm not the first to tell you it's a barbaric relic, et cetera, et cetera. who cares whether it is or not. as long as people think it is something they should know them. >> hey, jim, assuming you had a momentary lapse of reason, the grease from the alkaline me, what chance would you take to help write and forget to be market driven? what would you do? >> i would admonish the federal reserve and then i would resign. last night
>> i would also like to know what you think the federal government should do at this point is in a freefall or should they like no and let all of the treble bleed out for one? >> absolutely. i am standing in china right now. if i was the chinese government, and i would let this thing collapse. any time any government in the world has gotten into a market, it's an able situation and that is happening again. by the way, and i would lose a lot of money. it would be a temporary thing and the best are the ones where you have a big co-labs@the natural solid bottom. that is what i would do if i were china. they don't have to listen to me. >> hey, jim, certainly the sell off this week and it seems to
indicate some economic weakness of the devalue an occurrence to you. but you are fine with that. >> you asked me what i would do if i were the chinese government. that is what i would do. artificial situations are always in cable. i'm a little shocked that you say they devalue. the mark to currency down 2% or 3%. that is the market fluctuation. dagen: want to backtrack. you said you are assured overvalued stocks. what are we talking about? facebook, amazon, netflix and google? >> yes, yes. four, five, maybe not thoughts in america that never go down. those are the five that i am sure two or three months now and fortunately they are coming to the rescue. >> they are indeed.
as you always. we always call it whenever we need you. it is better if you are here in person. anytime you want to call, please do. >> you know i make plenty of mistakes. i'm happy to talk about them anytime you want. dagen: i have a question. what is the biggest mistake you'd made in the last 20 months? >> my biggest mistake is my first wife. what a mistake that was. i ran into her recently quite by accident. i can't believe how happy i am. what a mistake that was. dagen: jim, i was really talking about investing. i'm glad you shared that with us. >> see you again. anytime. dagen: jim is great. jim is terrific. >> happy birth day. happy birthday. dagen: i will leave you with us
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dagen: breaking news. a global selloff under way. forcing regulators to halt trading for the second time this week. u.s. markets, european markets. i will not the dow jones futures fall off the lows of the morning got more than 400 points. 349 points. spent 500-point loss on the tao of love so far this week. "wall street journal" economic correspondent john hilsenrath. john, what are the folks of the federal reserve talking about this year. >> we got minutes from their december meeting yesterday. we saw a group of people who even though they raised interest rates for the first time since 2007, they are very squeamish about what they were doing and are worried inflation will be below the 2% goal. the fed is saying it will raise rates four times this year. the markets as two times. the way things are going, looks like it's closer to what the
market is saying that what the fed is saying. dagen: that begs the question raised by a lot of people before the fed made its move in december. why did they do it? if they were squeamish, why did they go ahead and do it? write it off and say it's only a quarter of a point, but nonetheless it is a rate hike. >> raid. a few reasons for this. one is we have seen an improvement job market in the united states. the unemployment rate has come down to 5% from 10% and broader measures of unemployment have also come down when you take account of part-time workers and people who've dropped out of the labor force. at some point the fed has to respond to it. what they want to do is despite squeamishness, they want to get started because it means to keep getting better, they don't want to end up behind the curve. dagen: correct me if i'm wrong. i think you wrote an article in
september where the said after the market shock actually was lucky not new extraordinary measures that could go to if it needed to put more. >> this is a problem they've got. they say the economy is getting stronger. they think they will keep raising interest rates next couple years. that is the baseline scenario. they worry a lot about some new shock hitting the economy and been in no position to do anything because interest rates are close to zero and if not such a big talents she. they are very worried there is a new gunfight and they are out of bullets. they spend a lot of time thinking and talking about that. >> you pointed out the fed fund futures are pointing to rate hikes. what about the bond market, the credit signal or bond yields today. you think the federal pay attention to either of those
market signals? >> i think they will. i think back to the bond market conundrum of 2004-2006. the fed was raising interest rates and they didn't move anywhere. it was a signal that there was a weight on interest rates the fed shouldn't and couldn't ignore. when they say low ten-year treasury yields, they say there's no inflation pressure and they don't have to move aggressively. >> this china news out this week affecting the markets, the fed is watching not and they told us two meetings ago that they were keeping an eye on what was going on in china. can they use the china news is a reason to back off right now where do you think they have a number in mind where they want to get to 1% by the end of the year and they will get there regardless of what goes on overseas. >> they are not going to use china as an excuse. the two thing they're looking at our inflation running below 2% here in the u.s.
and unemployment. if inflation doesn't build up, that is their excuse. frankly if the world's second-largest economy, if the world's biggest commodity consumer continues to struggle and disappoint, there will be a lot of downward pressure on inflation and that is what could force the fed to hold his fire. dagen: quickly before we have to let you go. jim rogers said when mike bock asked him if he was running the fed he would go in and abolish the entire central bank and resign. we laughed at that. however, do you expect to hear more of that from the campaign trail especially from the republican presidential candidates and how did they influence what the federal reserve does in the next year? >> i say two things about that. one to answer your question specifically, the fed is going to be a political issue in 2016. it will make their job more difficult because republicans are attacking them by
mismanaging the economy and being too powerful, too unwieldy. that is the first thing i would say. the second thing i would say to jim rogers is that it's a nice laugh line. tommy, what would you put in its place? it is easy to attack the fed, but when you think about the alternative is getting more complicated. you want to run the economy and gold? gold has been a volatile commodity over the last few years. we've been running the economy and gold for the last few years. money supply would shrink dramatically. we be back in depression. dagen: by the way, who's the biggest producers of gold? china and russia. puzzling to those stable nations. >> let's also not forget south africa and a number of other countries. it's not like these are the countries of the world that we want to tire economic futures
too. dagen: john hilsenrath of "the wall street journal." he will be with us. thank you so much. 366-point loss on the dow futures right now. the good news better than it was an hour ago. we will be right back. here at the td ameritrade trader group, they work all the time. sup jj? working hard? working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivative pricing model, honey? for all the confidence you need. td ameritrade. you got this.
dagen: breaking news. global markets slightly shell or -- sharply lower. trading halted there for the second day this week. it was halted after 30 minutes of the trading day. looking for losses of more than 2% across the board. nasdaq 100 very hard hit. almost all 3%. oil broke close at $33 a barrel mark. its lowest level in 12 years, but low 33 at the moment.
big names like apple and ask him lower in premarket trading. nicole keeping ni on all of these moves. reporter: wear up off the lows of the morning. as you noted, the dow futures jumped 380 points and we will be seeing some big movers here on wall street. apple and macs onto the downside. many movers are down about 2% or more. apple which closed at 170. the bid ask his 97 and change. also watching chevron and exxon energy names which will likely be under serious pressure as oil moves to the lowest level since 2003. here's a look right now. the bid ask a 75 and change. that is likely to be a big mover of energy and materials to bit flaggers of yesterday amid this week. we continue to watch the other technology names. all of these names are about 2% to the downside in this early
going. we are up off the lows of the morning, but this is starting out to be a busy morning when the bell rings at 9:30 a.m. dagen: thank you so much for that. coming up on "mornings with maria," and chief impediment investment strategist. they know everything you need to hear and you will hear it on the fox business network straight ahead. looking for 24/7 digestive support?
dagen: breaking news, market selling off around this world. i am dagen mcdowell. with me this morning and all morning long, mike murphy. keith mccullough, trading partners and our very own jo ling kent. we have the world covered for you right here and it starts with china once again triggering another selloff. china halted trading again today. it happened on monday.
this time 30 minutes after the market opened. that happened in the united states. the market closed at 10:00 a.m. eastern time. the 7% selloff on the shanghai. within 7%. this selloff is well halted trading. it was scorned by china's attitude evaluate current date once again. seen as a desperate move to juice exports in an economy. how bad is the economy? nobody knows the answer. the ripple effect in other asian markets you can see the nikkei down more than 2%. hong kong off more than 3%. mild selling a few of south korea down more than 1%. european markets feeling pain as well. major markets they are lower by more than two, almost 3.5% in germany. that is their worst day since september. here in the u.s., the year the financial crisis when our system was brought to its knees or the
dow, nasdaq, s&p and decline of more than 2%. 382-point loss as we speak. when we talk about halting trading in china, here's some news for you. we here in the united states have circuit recurs on all the markets. level one, level two, level three. 7% decline would trigger -- if that is the first circuit breaker, it would trigger a 15 minute trading halt and as you move throughout the day, different levels at the end of the trading day would close altogether. that is how much the s&p would have to drop with a 7% loss. there you go. that is the number to watch out for. oil under selling pressure this morning. a 12 year low overnight, getting closer to the $30 a barrel mark. 32 and 83 right now.
following market actions for you, what it means for your money. jo ling kent is here with a look at how it all started in asia and china. what's going on? jo: 29 minutes. it was halted for the second time this week. shares fell 7% in the trigger punches throughout all of asia. the coffee down, japan down, australia also down at talks in europe as well across the board. the cac and all the different markets. a couple different things. a weak manufacturing number continues to slide every single day to stun those losses central-bank inject to $20 billion into the short-term funds on monday. so that studied the market yesterday but certainly didn't hold. this morning the central bank of china corn exchangers their jobs by $108 billion to 2.3 billion basically to break the fall of the u.n. it was certainly more than what economists were. i just want to review the quote.
alberto in hong kong said this is crazy. chinese regulators set off in july and cannot get out of it. they have ruined whatever hope investors still have in the market. >> thank you so much. stay right there. as in the capital managing her and strategist sam's overall. i always look to you. your supermarket perspective. how bad is this start to the year? what does it tell us historically,, data-driven what will happen the rest of this year. >> good morning. we are certainly starting off with the wake-up call as to the uncertainty from geopolitical events combined with the uncertainties surrounding the economic health not only here in the u.s. but around the globe. i think investors however should not become their own worst enemies. we have had many times in the
past in which the market started on the wrong foot and we ended up to light up every three times and enacting positive for january and positive for the entire year. obviously you can say we have not had a situation the past similar to what we are experiencing today except to say here is what is driving the market actions right now. we definitely have a risk off environment right now where people are basically selling first and asking questions later and i think the magnitude of the future is the client indicates we are probably approaching a capitulation stage. dagen: part of the problem is nobody saw this coming. so many of the strategist you talked to say since the s&p was essentially flat last year, what my forecast was for 2015, i will roll it over and say this is what will happen in 2016. that is a lot of what i've heard. >> well, you are not wrong.
in some ways that was my feeling as well. primarily because when you start the year, you realize 80% of all calendar year since world war ii posted a positive total return. if you think there is something diversion from that, you have to be fairly positive. we have had 10 times since world war ii that the market was flat in one year, meaning up or down by less than 3% and in the subsequent year, the average price change was a gain of 13% and 80% of the uris were positive. all they once did we have a flat year following a flight gear. basically the probability is also indicate you usually have a good year following a ho-hum one. >> sam, given all of that, what are you buying here? >> what i'm doing is sitting on my hands right now. certainly we have many stocks that buy recommendation. i published a report on monday
entitled the barbell portfolio in which i had looked back over time to say, do you want to buy last year's winners for last year's losers and history actually says you buy both. so if you are looking at companies that are down or industries that are down 50, six d., 70% bite holes and can do mobile fields, you might want to look at a company like consul energy which we have ranked as a strong buy. if you think oil and gas exploration and production was overdone, you might want to but to southwestern energy and that too is ranked strong buy. i would be saying, looking for companies that were priced to go out of business but we don't think well. >> sam, i love how you battle off the history of it all. what do you think about this hysterical point? every single time corporate profits have declined for two
consecutive quarters, the u.s. stock market has had a 20% or more decline. >> that is an interesting statistic, one that i would like to verify myself, but certainly that is a can earn. an earnings recession is sent and we've been talking about since may of this year, since world war ii there have been 13 times we have gone into an earnings recession ended 10 of those times it preceded an economic recession. the feeling that this time could be different is that the earnings decline is really the result of the drop off in the energy earnings. if you take out energy earnings, the s&p earnings would be up 6%, not in negative territory. we turn into recovery in earnings next year as the declining energy earnings wanes. jo: sam, looking at the market going forward, this has been a response when it comes to the china story.
how do you forecast what the rest of the year of the year looks like if the china situation doesn't turn around and doesn't show any signs that it will. >> that is the big concern but big concern that is being evaluated right now. when you put two while the fundamentals, the fundamentals still point to a solid -- not a stupendous, but 2.2% growth in developed gdp. 4% growth in emerging market at 2.7 here in the u.s., looking at 7.5% earnings growth. certainly when you look at a market meltdown globally, you have to ask yourself the question about whether prices are leading fundamentals. then again, you have to say to yourself the market has anticipated 31 of the last 11 recessions. we have had declines of 10% or more of your d. one times since world war ii and we've had 11 recessions. you have a one in three chance
that is likely to be the next scenario. dagen: some parts of the market are already forecasting that. i know small cap stocks that want to get into this later. small-cap stocks are down 15% from their peak. stay with >> right now they are trading at 80% premium to the s&p 500 multiple and historically they've traded at a 25% premium. so what we find basically is the small-cap stocks which investors gravitated towards because they thought with their lack of international kosher in a rising rate environment, which would then put pressure on the dollar, the feeling was you want to go to the smaller cap stocks they don't have that kind of exposure and i think they over did it. we still have some more weakness in the small caps base. >> they are still trading at an
80% premium, even with the selloff last year? >> yes, we are right now looking at 80% premium to the s&p 500. also, looking at consensus numbers that you are expecting small-cap remains to be up more than 50% in 26 games versus 13% decline we experience in 2015. i still think the consensus is way too up to mistake. dagen: thank you for all that perspective. take care of yourself. sam stone while joining us from s&p capital i.q. oil falling below the $33 a barrel mark, lowest level in 12 years. phil flynn at the cme group with his new take on this was payable full text the selling? >> you know, i think it will be a rebound in the stock market. we did see the stock market come off the lows they gave away a little bit of a boost.
they did retake $33 a barrel but it looks like it's fading again. when this comes as you mentioned earlier, we had the increase in geopolitical tension. iran is accusing saudi arabia jets attacking the embassy in yemen. obviously, we don't know if that's true if the iranians are just trying to get tit-for-tat further attack on the saudi arabia and industry, moral equivalency. we don't know, but it did get oil a bit of a bounce. it is difficult to think about buying oil that the global economy seemingly coming apart at the seams. that will weigh in the marketplace. when you talk about record supply, low prices, it usually creates demand. you don't expect demand created when there's turmoil in the global stock market. dagen: really quickly, something michael brought up, in terms of these newer u.s. energy producers, oil producers, cannot
production come back online fairly quickly if it has been polled? what kind of price are we talking about that they could still pump profitably? >> we saw last summer michael mentioned early every in july, oil prices tapped in july. when we saw a $60 a barrel, we saw a major in recent recounts. that seemed to be the number that brought confidence back to the number for sustainable profit. they got even more efficient than not. the problem right now when we bring these things back online is the bankers. are they going to give them the money they need? right now they are very scared to do that. number two, the false sense of security of who the saudi arabian oil, the factors that make up the difference. the shell production has a much higher decline rate in this deepwater projects, then the projects in saudi arabia. even though it will create a
buffer over the long run, producers will have a difficult time replacing more traditional forms of oil. dagen: phil flynn, you will be with us all morning. a major selloff at the open. global stocks up. china, europe here. we will bring you the latest straightahead. i don't want to live with the uncertainties of hep c. or wonder... ...whether i should seek treatment. i am ready. because today there's harvoni. a revolutionary treatment for the most common type of chronic hepatitis c. harvoni is proven to cure up to 99% of patients... ...who've had no prior treatment. it's the one and only cure that's... ...one pill, once a day for 12 weeks.
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earlier trading now below $33 a barrel. everywhere you look, there is weakness except in u.s. treasuries and a little bit of dying in gold. in the meantime, north korea claiming a hydrogen bomb test command by the international community. the white house and others casting doubts on whether it was a hydrogen bomb. cheryl casone has that another headlines with all this morning. >> the white house saying it doesn't believe the north koreans successfully tested a hydrogen bomb. press secretary josh earnest and analysis by u.s. authorities is not consistent with north korean claims. >> the initial analysis conducted by the events reported overnight is not consistent with north korean claims of a successful hydrogen bomb test. there is nothing occurred in the last 24 hours that is cause the united states government to change our assessment of north korea's technical and military
capabilities. >> two-week holiday season was the last straw for macy's or the retailer will eliminate for 500 jobs. that is 3% of the workforce at macy's says it was continue with the closing of 36 stories happening later this year. we want to watch yahoo! this morning. the company of the company is laying off a thousand employees, maybe more cutting roughly 10% of the workforce in response to shareholder pressure to make the changes within the internet this is of course a big problem for marissa mayer hasn't stopped performance. the stock trading down in the free market. finally, the story, time warner cable hit by a major hacking attack. at 2,320,000 customers may have had their e-mail addresses and passwords stolen. big is happening with both those companies. time warner and information likely compromised or mao were downloaded through phishing attacks that have been or
indirectly through data breaches of other companies. we will keep you posted. dagen: i can't believe macy's had the nerve to entire blame the weather. they've got to come up with another excuse. still to come coming futures falling off a cliff. it is in a nasty start for the new year with u.s. market. take a look there. that doesn't tell the whole story. or start to the year since the year of the financial crisis in 2008. one stock to watch as we go to break, apple is going to crack the low $100 a share likely 9:30 a.m. eastern time. the stock has lost way more than a quarter of its value since last year. more breaking market coverage after the break. try the superior hold...
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dagen: breaking news. u.s. futures pointing to a massive selloff. 360 a point loss the dow futures. oil hitting a 12 year low. right now take a look below $33 a barrel. a spring in elizabeth make donald had one of my favorite people walking on earth. she is a reporter among reporters. when in doubt, get on the horn and start calling people. what have you heard? >> these are guys have grown up with. jpmorgan chase and goldman sachs and the one thing they talk about is the isn number, talking about recession. they think is in the 45
territory. 11 of 13 times since world war ii, that is the recession. this is the shortest trading market on record for china in the 25 years of the markets over there. the one area they are looking at in terms of what markets are overvalued. by the way, kicking off earnings season next week. we've got 11 companies in the s&p 500 reporting. 40 in the week after that. they are saying watch out for alcoa. it will have a rocket. they will come in and is it what it was the year prior. citigroup is to fly to the downside. jpmorgan chase popping up slightly unimproved revenues. the other sector they are fascinated by his auto technology. not just the fact that car sales have had their best year since 2000, but also things like improved batteries and driverless cars talking about hooking up a volvo and more
technology coming out. and also netflix. dagen: what are they talking about? do they like it? >> getting hammered on gm right now. you've been hit from 18 down to 12.5. down here at these levels you get almost the 5% dividend. a lot of negative china news. >> just what the autos, even the record year in sales last year, much discussion about pent-up demand about how the fleet of cars we drive in the united states, they are old enough. >> that is right. people are holding onto their cars for longer. now it is 11 years. one thing they are always fascinated with is the guy is calling doubt 18,000. the market doesn't just destroy portfolios. it also destroys credibility and careers. they are saying one guy said it is sort of like the houses on
fire and these guys are smoking in bed still. it is a trust but verify market. verify the cash flow coming in. too much in control. dagen: to that point, something that talked about here on the air for a couple years now, if you look at these market, where do you go? what is that telling off? i want to say since 2008, even before that they turned out to be a bubbling diversification that there was so much money sloshing around and went everywhere could possibly go. so everything that overvalued. finding a bargain, unless you found kind of a random dog of a stock, it was very hard to do.
>> you know, and even san francisco president john williams saved fortify rate increases, really? these guys are suffering from post to my neck stress disorder. they keep wanting to come into the market and talk. get out of the way and let the market correct itself. >> he's smoking something to keep in the bed. at this point, if you had 45 interest rate hikes, this would invert the yield curve. if you don't know what the isn is a mobile data. every time. >> it means you definitely don't want to own the financial stocks. >> a. >> the federal reserve would perpetuate a recession. >> a forward for the s&p 500 with the indicator of where it shrinks. when you knock out consumer
staples, which they feel is overvalued, that's interesting. it comes down to 14.7. the sectors they feel are failed. our health care, industrial materials and consumer discretionary. dagen: i worry about health care going into a presidential year. you might have the best drug innovation. you might have the best looking pipeline in terms of the new cancer drug, but the headline risk is front and center. dagen: it's going to be hillary and bernie and republicans on the other side of that. today and everyday. the best reporter among reporters. futures pointed to a lower open. 367-point gain on the dow futures right now. better than it was looking at all to market movers. the biggest ones next.
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breaking news, markets selling-off around the globe. rose capital mike murphy, keith mccollough, michael block and joline kent. another market sell-off. china trading again today just 30 minutes after the market opened. that's no laughing matter. it means trading would run for half an hour, the markets would close for the day at 10:00 a.m. eastern. china's move to devalue its currency against the dollar. i would argue that the chinese government is trying to get in the way of that selling. the more they try to do that with limits on who can can sell and how much with
the consumer battle sheet is much greater than it was. not all is lost when it comes to oh the domestic economy. >> before we move on the. i want to reference when you talk about the thwarted paris today is the anniversary of the charlie hebdo attack. a man was shot outside of paris. the today we are talking about the risk environment. >> what you think of the cycles in a lot of things are true. employment and consumption always is good at the end of a cycle. what do you think the market probability is in pricing in both the employment and consumer slow down in the next six months? >> well, keith that aos a great question and truth be told, it's already happening. yesterday behind me, we are
starting to see interest rate futures and options start to price in a lower setting. it obviously has a relationship with the overnight funds rate. as you know in the overnight and early this morning out of london, it is a little bit lower. we have seen some inquiries as to trades that would benefit from the fed maybe being on hold for the rest of the year and maybe taking back the 25 basis points as they put in the market in december. so that risk is out there for sure and i don't want to suggest that it's not. in my opinion, however, i think we rather see the economic data clearly roll over before reacting. things like consumer confidence earlier this week. there's other times out there which suggest that within the domestic kphaoeu, within a -- economy, within an silo, they are not great. i think the fed would be anxious
to take back the 25 basis point. >> they are okay until people watch this market and it impacts their behavior nap is a risk, john, right? >> the key is the tightening labor market. that's what the feds are betting on. they are betting that the job growth continue cans an they squeeze higher. that's where the bet is. inflation is not a problem but if job growth can can continue to be strong the feds will feel like they will continue to have a buffer between forces which i think keith is references. john, good to see you. john brady. >> thanks, dagon. >> nicole is keeping an eye on the moves. >> good morning. certainly we will be watching the names that will come under pressure. while we are off the lows of the morning we sow dow now down and now down 350. we are going to be watching
apple that came under pressure. they will try that $100 market and the big high is in the $97 range. 16 points for cheveron. nap is what will weigh on the dow industrial average. then we will watch the tech names like ibm. $135 and change. the dow is down 3% just in these few trading days and is looking to the down side about 2 the% this morning. we are looking at a busy open with a lot of red arrows. >> thank you, our panel will talk about the upside that you will find in names like apple. we talk about is it oversold.
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nearly 2% on technology stocks in the nasdaq. oil with b low $30 a barrel. a new-year low. cheryl has that story and more headlines. >> a little politics news this morning, biden told "tennessee connecticut" that he regrets not running every day but says it was the best decision for him and his family. he said he would not seek the nomination after all. >> >> griffin received 437 of 440 votes on the ballot. a record 99.3%. that is on july 24th. piaza is the top catcher in
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>> so, breaking news, u.s. futures down across the board. china, europe here nowhere high. not in oil. oil falling to a 12-low. lowest level since december of 2003. $32.72 a barrel. joining us on the phone is the oil analyst steven. you predicted this. how low is it going to go? >> caller: hi, at this point, certainly, we are can detached from the fundamentals of pulling a barrel of oil out of the ground so once you become from the economics then it just becomes a psychological market.
so now, as you just jointed out we just took out the low in the 2009 toil closing from the depths of the great recession. that was our first technical target, now the next the technical target is obviously the $30 level, that is where the momentum is telling us where we're going. >>dagen: in terms the of market being driven by psychology, by fear if you will this, what do people need to see before getting trading to the fundamentals. >> caller: let's spell with the notion that cheap eneconomy, cheap copper, cheap lumber is some sort of economic contraction. the industrial commodities complex is economic contraction. i'm saying prices do not drive economic growth.
economic growth drives commodity prices. what do we need to see? first, the industrial sector, whether we look at industrial production, durable goods, the manufacturing numbers, the original fed outlooks, the industrial sector of the united states is in recession. it's been in recession for the past year, hence the collapse in the commodity complex. now if you look at other key end kay to, indicators that have a strong correlation to a the u.s. recession, the chicago man ear skwres number, -- numberser and both of niece inkaytors -- both of these indicators are at lows that we will only see in a sessions are. we are seeing in a recession now or we are seeing reports, economic headlines that only ever kurd occured in the recession. if we are not in the recession this is the first time ever. what do we need to see?
we need to see the economic rebound right now and right now we are challenged. >>dagen: i want to ask you about china and oil consumption we saw that it was the lowest since 1998 last year and now going in saying they will consume 1 1 million-barrels a day of crude, we say it will effect the commodity prices what do you think of the china front? >> caller: from a global perspective, saudi arabia and iran will under cut one another because they need market share. where is the market share growth in stphoeul it's in -- where is the market point? it's in asia. they cut interest rates over the past six months. they are dumping industrial commodities on the global market. clearly the pin has burst, the
communist miracle in beijing and the curtain has pulled back and now people are starting to question. it's not tall rainbows an unicorns over there. then we look at japan nap country with the recession in 2008. so, oil prices, saudi and iran fighting and a huge bears perspective for oil throughout this year. >>dagen: good to talk to you as always. thank you so much. >> caller: thank you. >>dagen: it's not great news. we would rather have the truth and you don't sugar coat. steve, thank you so much. >> caller: thanks. >>dagen: we were following the global market sell-off for you. china is the central problem. europe the dow 357 loss on the dow futures. we'll be right back.
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>>dagen: breaking news, a market sell-off around the world. with me this morning is mike murphy, keith mccollough. welcome all. our top story started with china as it did earlier this week triggering another market sell-off. china halting trading again today but today just 30 minutes of trading and it was all halted. 30 minutes, imagine fit happened here in the united states, trading would stop for the day at 10:00 a.m. eastern. china moves against sparking fears because china now looks december -- desperate. what does that say about an economy there that we might not know enough about, that we don't know enough about. the ripple effect being felt in other asian markets, 3% loss in
hong kong, europe also feeling the selling pressure. the dax down 3.25%. in the united states it's been the roughest start for stocks here since the financial crisis hereof 2008, the dow, nasdaq and s&p 500 all showing declines. when we talk about halting trading in china we also have circuit breakers here. 7% sell-off in shanghai all day. the s&p 500 falls 7% that would be more than 139 points and it would close trading for 15 minutes. level-two, 15% also triggers a 15-anyone trading up 15 trading halt.
trading would be halted for the rest of the day. oil under pressure. crude dropping to a 12-year low overnight. that is the lowest level since december of 2003. steven just pointed out do not believe that the lower crude, lower commodities are for slow economic growth. you need to see the economic improvement and so far there's no indication of that. we will be watching the jobs report out tomorrow morning at 8:30 a.m. eastern time. 200,000 jobs created is what we are exexpecting. will it be that good? were here with more on what happened in asia overnight. >> it started in the first 29 minutes. that's how long the shanghai composite traded before it was halted for the second time ever and the second time in a week. shares fell more than 7% in early trading. it triggered all down. stocks in europe then sinking as well.
we can see down across the board there. all of this started monday with that weak manufacturing number, the pmi and the chinese yen as it continues to fly every day this week. the chinese bank injected $20 million-dollars in short-term firms on monday. they said foreign exchange dropped by $108 billion-dollars to $3.3 trillion. getting notes in from china now, he is saying it was going to come unglued at some point, i think china is making a mistake by devaluing. >> i am getting calls from china, too. let me check the other channels. >>dagen: no, don't check over
there. >> the problem is saying china will pop, they will do fiscal stimulus. i am getting e-mails from china from a guy, alternative investment world friend of mine. he just had dinner with the ceo of the central bank there. they don't know what they are doing. this guy in the same breath said there's no way that they are going down to 7 then turns to the guy and says i am concerned that the offshore, the more free trading you want is going down much more than where we're fixing it. he's confused about premarkets. it's not going to 7. the second problem here is that we are all focused on china needs to support growth, they are focused on other things. they are focused on building their military. the other thing that according to my friend, they are focused here, they are focusing on corruption on doing economic
reform. than is well and good for a sober -- a standpoint. does that point you want to buy stocks now? i don't think. we think stimulus means buy stocks. >>dagen: the crack down on corruption is over a period for some time has hammered a lot of these retails. >> one is trading at $179 and one below $100. >>dagen: 12-year lows on oil. what do you know? >> oil prices don't fix the economy but they can can create new markets down the road. when you see these oil prices tanking like they are today, it's not because the economy is good and we are not celebrating the oil prices, it's because there are major problems. that's what's being reflected in price. tin seven orry numbers we are
seeing here in the united states. a record amount of inventory here in the part of the world. the oil seems to be battling back and forth around $33 a barrel. they want to see if this move is over done overnight. i think they will take their que from the u.s. stock market. oil hass a good chance to recover, if not it will be a rough day. >>dagen: i have been trying to get to this discussion. at this point, with the sell-off you see in some of the individual stocks and apple, and the sell-off you see in the market now, do you think about buying at the open? >> you have to. if you are waking up this morning, you are not sell into this. this is where you start looking for quality names. we have seen oil down $33/$34 a barrel now. when you look at cheveron paying
all dividends. i want to buy into this instead of panicking. this is where you look for opportunities and you react to that. i don't know where the pot bottom but when you see a name like cheveron with $15, that's when you step in to buy. >> you see amazon and apple taking an expensive hit. >> amazon had a huge gain. apple, i wouldn't put up there with the expensive ones. amazon is trading 1 15 times forward year earnings. i would be a buyer of apple. >>dagen: standing global equity strategist, you can buy in a downdraft like that assumeing you can ride out an incredible amount of volatility, right? >> absolutely. this is no different than the last five years. on these pull backs it's difficult for retail investors
to do, pull backs are opportunities. we are probably in the 7th inning, there might be one out of this this cyclele but there's more baseball to be played and i don't think this market is over. you need to be thinking of ways to take advantage of this volatility. it's tough to do but you need to be looking at stocks and industrials which are out performing us since july. technology, consumer discretionary. those are the things that you want to look at. the others here in the states are going to continue and i think you u will see better news aboard, too. >> the choice is got just stocks. you can buy fixed income. not saying is junk but treasuries certainly look a lot more stable and if you think that we are going into a downdraft in the economy, maybe not a recession, but an economy that can pwraeurly grow you -- barely grow you want to own a
treasury. >> it is an ongoing reality check. if you have my view, if you have the other view which a lot of people have that the economy is fine, you have another position. that's what makes a market. the most obvious things to me now is the length that steven made which is the length from deflation to the credit market in the profit cycle. we have a chart here that shows you that happened every single time which is a good batting average. every time that corporate profits are negative for two consecutive quarters, question, we do think it is, which is the fourth quarter, the u.s. stock mar undergos a crash which means a 20% or more decline. i think i got both right. i think i have the slow down right and the stock market side right. i think people are going to have to wear this. on the the trading side we have more in the camp with what he said. you have to buy something today.
certainly if you are short stocks you cover some stocks put in the intermediate term i think the next 3-6 months you will see people on wall street, the corporate stocks are negative for stocks. that is huge if you look at that chart. >> did keith convince you? >> . i the think you will see a 6%-7% earnings growth and not any mystery in the third quarter if you take out energy earnings not to play the this game but you take out energy earnings and they are up about 10%. the situation in energy that's driving down oil and making people ahead of the high yield bond market and people are fearful that chinese growth will clash which based on our research is not going to happen. this is an opportunity and you need to take advantage of this. we are in a slow growth environment.
that will not change. we have been in it for five years. low this inflation will not change. >>dagen: the one thing that makes some individual investors weary in buying in this market because in hedge fund management many made the same mistake but as oil moved down they had people sell them, mlp, they had people sell them closed fund. now is the time to buy. would i will push back on is that people get burned and you burn them once on energy, for example, they are not going back and they are not going back far second helping of oil food. >> that's been a huge problem in this entire rally is people who have been in the market for a while got burned in '01 and '02. they don't want to touch that hot stove. look what they've missed. they missed a huge rally off the
march 2009. my job is to look ahead and make projections and see where the economy is going and see how that will effect these various sectors of the market. these human emotion. that's a tough thing for investors to do is step in when more's blood in the streets. >> >>dagen: thank you for that. scott glen at wells fargo. you see people still going back and buying housing. china trading for the second day this week closed after a half an hour of trading. markets reacting as you might expect. insres trors running for the -- investors are running for the excite. we will look at more when we come back. we live in a pick and choose world.
hour. let's bring in stewart barney. host of barney and company. he will guide us through the taupe tkpw-rb guiding us through the open bell. >> no pressure. snide want you holding my hand through the open. >> it will be a horse race. we are going to go down. we are going to go at the opening bell. it's bad at the opening. to me the world is on fire. things are falling apart. there is a general feeling that things ain't right. we don't have any answers out there. the brewing between saudi arabia and iran and we have china with their market collapsing. translate that in to america and you have this sense of unease.
what are we going to do economically in the year ahead to fix what's broke right now? answer, not much. >>dagen: when you expect to hear from the campaign trail as we go in the days and weeks and months ahead in fixing the economy. a lot of talk will be for the fed reserve and what to do for central bank and should we have one. people might dismiss that call as crazy but that's on the table. >> i can't wait to have hillary clinton question what she's going to do. she will have to beat up on the corporations, beat up on wall street, let's spend more money. if she comes out with that response but that is ridiculous, quite frankly but that's the response she has to have. she has no the alternative. he is coming in the primaries and the caucus with iowa. he is neck and neck with bernie
sanders. she has to stay on the left and the left does not have an answer to america's prosperity problem. >> you have covered markets for so many years -- so, very cold. >>dagen: i am saying you are seasoned and experienced and lived a lot of life. what does this look like? what does this economy look like and feel like based on what you have seen? >>dagen: not good. we started the year very badly. in particular the big name stocks we ran up so well last year they have taken the big hit this year. look at amazon for example, i think that was the stock of 2015. it has done from nearly $700 to $620 in a matter of days. apple will drop from $100 a year from a high of $1 34. that is a big drop from the biggest named companies. >> those are the names that
individuals have a connection with. that is the stock market. they own apple products. >> our viewers right now, if they own individual stocks, probably own some apple, some microsoft, some google, probably some amazon, some net flix. they probably own some of them and seeing them come down. what do you do? sell now and take whatever profit? >> not at all. because company is going to be priced on its futureed earnings growth and a company like apple is still putting up strong earnings. they may guide that the lower but you cannot call apple an expensive stock because it's trading at nine-times earnings. to stock that you and i have talked about microsoft for some time now, nothing goes straight up. none of these companies will go up forever, if they do they create a bubble and they crash. you look at quality companies. if they have a pull back of 10%
that our market the s&p is down nine from its high. this is when you are going to buy. >> if you in your early or mid 60s and about to retire and you have some money in these big name stocks, i wouldn't say don't sell, i would say let me sell half of it. take that money and keep it. if you are young, by that i mean 40 or something like that, this is a buying opportunity. this is where you can can pick up apple at 97 for example. you buy at that age and sell when you are older. >> that is all pointed. the people that sell at half the growth stocks like you just mentioned. you have that money. what do they do with it? they put in the mattress, put in a bank? >> the dividend is secure. i don't normally give much financial advice -- what is wrong with at&t?
at today's price you can probably pick it up? >> we talked about cheveron. >> it's at 6% at the moment? at&t will get you 4%, 4 .5%, what's wrong with that? >> i am old -- >> no. you are a child. >>dagen: i just back about the technology crash, the horrific crash in 2008 that wiped out individuals because of housing and now this and you have an individual that's been burned, burned by the market an burned by the government and my wages are got growing. what is wrong with this country? that changes the entire economy because of the tk-rbg. >> that is a political question. what are we going to do? we have another year before we gate new president. what will that new president's policy be? it must be growth. can we forget this the recan distribution nonsense?
shot and killed by officers at a police station in paris. authorities say the man was wearing a fake explosive vest and tried to enter the police station shouting alah al akbar. >> we call this season was the last straw for may -- macy's. that's 3% of the work force. macy's says is it will continue with the previously announced closing of many stores later this this year. that's one stock to watch. another stock to watch today is going to be yahoo! . the company laying off a thousand employees and cutting offer 10% of the work force.
that lady on your screen, dagen, a lot of pressure on her still. i will be watching yahoo! and a lot of the big movers today. it will be a big market day today. a lot are moving on news and the over all decline that we are seeing now. >> never a good sign if you are running a company. cheryl, thank you so much. she will be on the count down on the closing bell today. he is in for liz. she will be live for the new york stock. you want to watch the open? and the close an we will be right back. where to get in... where to get out. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points
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crude tumbling below $33 a barrel. 32.69 a barrel at the moment. phil flynn is at the cme group. what's your take? >> we tried to recover a little bit on tomorrow of those geopolitical stories, but right now shall the market is really taking its cue from the stock market. yesterday it was reported in the united states, we have more oil, gas, and heating oil that we've had combined than ever in this country. no concern with a supply problem. if you look at the big picture, we need demand. when you see the u.s. stock market down, global stock markets around the globe melting down, that doesn't bode well for energy demand and then the oil glut looks that much further. if you look around right now, we're also seeing the jobless claims, which is kind of a conundrum here, you know, you
look at the rest of the globe, the u.s. job market continues to be strong, weekly jobless claims came in at 277, that's down from last week's 287. it is slightly above the expectations of 275, but, you know, strong jobs number, but shows a disconnect between those numbers and what's-- there's a sense in the rest of the market right now about a global slowdown. >> phil, thank you so much. while were you walking i uttered upped my breath, i love him, because you went to the jobless claims and that's great instinct. phil flynn in chicago for us. there aren't many bright spots in today's markets, one of them treasuries. let's bring in janey chief strategist guy, and liz is here. guy, you can shoot this down, the market when it weakness last year, it showed weakness
in stocks and parts of the stock market. where are you seeing weakness in fixed income right now? >> sure, good morning, dagen and thank you for having me. you've hit the nail on the head right there. the high yield market had a rough six months. the beginning half of 2015 the pain in high yield was isolated to energy companies and since call it june or so it widened out to a much greater swath of the high yield market. the truth is we're pretty early on in the credit cycle and probably have a ways to go down in high yield pricing. treasuries remain the global safe haven asset of choice. no matter how dinged up it's been, investors flood the treasuries in times when there's overseas distress. dagen: i would argue, at least some of that is what i was talking about earlier with stuart varney, you have individual investors that have been slammed starting with the tech collapse, then the housing
collapse, and the financial crisis and what you're seeing here. guy, how hoe do you think that the yield on the 10-year can go? >> well, our expectation for the end of the year is about unchanged 222. i can in the meantime, there's a range in the neighborhood 2, 2 1/2% or so. i would point out even though we saw a big rally in treasuries overnight with the chinese equity meltdown in particular, this morning when new york traders hit their debt, we've been selling off from the highs, from the high point, so i don't think that this rally today is going to be sustained. if anything, drives yields toward the lower end of the 2% range and i just mentioned, it's got to be a few pieces of economic data in the next few weeks, which i don't see coming, frankly. dagen: go ahead. >> guy, if you study the history of it all and corporate earnings when they go negative two quarters in a row, we've been talking about this morning, you always end up not having a recession, but a stock market crash or 20% decline. do you see corporate credit
reacting to corporate slowdown, why wouldn't the 10-year bond reach its all-time lows? >> the with an i that we look at 10--- the way we look at 10-year yields we look at the 10-year, the peak rate of the cycle. that got priced in in 2015, all the way to under 2% and i find it hard to believe that the peak of this cycle is going to be priced in much lower than that. dagen: exactly. >> that provides the floor liz: i think that guy is write, dagen, and the high yield market started falling out of bed and it's almost if you link it to the dollar strengthening shall it's almost equates it. and when you see the action there, what they're talking about right now in the trading pits, the guys i talked to, not just the share growth, but it's supposed to come down from this quarter from 4.9 to 4.6%. they're talking the average s&p
stock down, and that's pretty much correction territory. they're talking what the fed funds future is talking about or pointing to fed rate increases. we know the median view is four rate increases the first in april and the fed funds futures saying no way, 4 out of 43% chance of a fed rate hike in april. down from 52% just recently. >> guy, where do you stand on the fed and how they'll react in the months to come? >> we have sort of an odd position when it comes to the federal reserve. we like odd. we like weird and odd and freaky, but go ahead. >> so our call is, either two rate hikes or six rate hikes and the variable which distinguishes between the two is the short-term evolution of the p.e. inflation numbers, but the problem is statistically speaking since the global financial crisis we can no longer say what causes in the short-term. all the things that were
supposed to cause inflation, they just haven't. all right? so i like to describe it as being agnostic on inflation over the next six months or so and that differential, whether it does emerge or doesn't, means either two rate hikes or six. dagen: i'll get really freaky, how about none for the rest of the year? >> it's increasingly a responsibility, but look, we're talking three, four trading days in 2016. i don't like reading into that much, into that short period of time. >> guy, given that 2 or 6 and i understand your logic there, you talk about the 10-year, where do you see where two year yields go. and that's the market and rate hikes as well. it's hovering around 1% right noup. now. >> 2-year note 160, off the top of my head, i don't remember the number. trend, while we see 2 year treasure rates rising, if you bought a two-year bond, you
don't own a two-year bond today, you own a one-year bond today. even though the interest rates are rising on the short end of the curve it's not hurting market valuations because of what we call the rolldown effect the idea that your bond is shorter every year. dagen: good to see you. liz macdonald the final word liz: thank you so much. what we're hearing, too, and keith and i were just talking about this, when we look at corporate earnings season coming up, we have to remember that these are-- they're reporting on adjusted numbers, right? and the company's own made up numbers filled with a lot of white noise. you know, what we're lacking in the business coverage right now is coverage of corporate accounting scandals and how earnings are manipulated to the investor relations point of view and i think that when we are in a choppy market like this, again and again it's always trust that verifies those earnings numbers and you've got to watch the cash flow. when you see a company like nordstrom or kinder morgan
saying a special dividend, that doesn't mean bring out the trumpets, everything is well. they may be drawing investors in on shaky earnings numbers, watch for that. dagen: by the way, e-mack was the accounting reporter at wall street journal for many years, e-mack can smell a scandal 15 miles away. >> thanks for that. and we had a stinky one with the subprime accounting fraud allowed by the rules. that's for another day. dagen: and elizabeth macdonald and guy lebas, thank you. it's not a pretty sight and worse as we've been speaking, tech stocks in the nascar leading the decline in your major market gauges, even so far this year. take a look how some of these tech stocks are doing in pre-market trading. what does all of this mean? stay with us.
the production schedule and produced chicken products outside of the hours of operation. no reports of illness yet. also this morning, fox news reporting that the 17 miners stuck in an elevator in a central new york salt mine are rescued. they were trapped 900 feed underground. the extraction process is moving faster than expected. fox news is covering that story today. netflix, by the way, going live. get this, 130 new countries yesterday, the streaming service is available in nearly every country in the world, this is big for netflix. up until now, it was only available in 60 countries ap the internet service is expected to get millions of new subscribers, dagen, which is why i told stuart varney i think it's a big stock to watch this year, he thinks i'm insane. that's fine. india, russia, saudi arabia and indonesia are the countries they're going to. dagen: thank you for that and
i'll point out when you write off netflix, they come off with a series like "making a murderer" and that's dominated the cultural conversation in recent weeks. put it this way, if tmz is writing about this case repeatedly, you know it's a big deal and again, netflix, they're bucking the odds. cheryl, thank you so much. cheryl: you bet, dagen, thank you. dagen: jo ling kent is here with other tech stocks she's watching. jo: i'm watching fang, and seeing how the market might be defanged, netflix, google, facebook. and yahoo! on the news that they may be trimming their staff, but right now, you can see down across the board. along with this market, but of course, some of the stocks have pretty significant china exposure, especially in the case of apple, right? we're talking about a company relying on the second biggest market that may not be delivering in this critical
year to come. >> let's not forget, apple has a very large food chain where you have a lot of the semiconductor companies also getting hit ap that's number one. because the people are concerned about earnings, but, wait, there's another step to this. a lot of the chip companies were merger speculation, and when the business prospects are going down, people think less merger activity will happen because who wants to buy a company that's going off a cliff, so, there's a double whammy there. >> there's a classic cyclical story. i'm tired of it, but if you look at semiconductors, transportation stocks, they've been-- the copper, they've been discounting since july. the sectors are under pressure and there are global. don't forget they went negative on products in the recent quarter, you can't go ex-energy. >> if you look at the semis in particular, we've heard about the death of the pc so long
now, a lot of the semi stocks have been hit and hit hard. i think that apple is a key one to watch. the futures have been down almost 400 all morning, apple was trading down in the 97 range and tradele 98.50. and the largest company by market cap, a good one to watch and see if it reclaims 100. >> you talk about everything on hand. the company may step in and if things get bad do another stock buyback. dagen: and before we go to break. the russell, if you worry about a depreciating dollar. the, you buy the company, small cap is down 15% from the peak in june and performing worse than the major market gauges this year. so it was one of the worst performers last year and it's still living in stinktown, so to speak. we're watching the russell 2000 you can see it there.
china, europe, here, it's a global selloff. people are running for the exits. we're not. we're still around and we'll be right back. amerivest selects the funds and manages your portfolio. is it run by robots? no no, you can talk to a person anytime. 'cause i don't trust robots. right...well, if the portfolio you're invested in doesn't perform well for two consecutive quarters, amerivest will reimburse your advisory fees for those quarters. i wasn't born yesterday. well, actually it looks like you were born yesterday. happy belated birthday. thanks. for all the confidence you need td ameritrade. you got this.
>> breaking news, the worst start for stocks in the new year since 2008. remember that year? who can forget it? it's not getting any better. the trading opens in about 40 is on the floor of the new york stock exchange. nicole? >> good morning, dagen, i'm joined by keith and company. we're talking about the markets looking down about 380 points off the lows of the morning, however, a tough start, the 2016 and another tough start this morning. >> keith? >> the problem that you have with a tough start in january, january sometimes, many times
tells us what the rest of the year is going to be. when we look at january and we're close by the dow and the s&p and that's a worrying trend. >> they call that the january effect, right? so goes the rest of the year. we're watching oil at the lows we haven't seen since 2003. names like apple, it's a broad-based selloff. we saw them sell off twice this week for that chinese stock market. we tennant to talk about here at home. i know it's unlikely, folks, we want to be prepared and informed. so go ahead and tell us, 7% would be the first home here at home? >> well, that's right. let me compare and contrast a little bit. china, they have a very new system and they halt everything. here we have different levels, market-wide circuit breakers, 7% down from last year and 1850, i doubt we're going to get there. but if we get there, we'll halt trading for 15 minutes and if there's no halt we'll trade until the end of the day. 7% for a 15 minute haul and then we go the whole day.
none of that is likely right now, but we're seeing a selloff no doubt. dagen. >> thank you so much. nicole, yeah, a 22-point decline like we saw is not in the car and neither is the hair and shoulder pads that we were wearing back then. we're thankful for that. we're covering the market selloff. we'll be right back. livin aickand ooseorld
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>> 35 minutes to the opening bell is going to be a rough start to trading. stuart varney will be guiding you through all of that about five minutes from now. before we move on, i want everybody's final thoughts. >> keith mccollough. >> i think you trade and i think tomorrow, if you get a bad jobs report, the market could go up a lot. the dollar could go down and oil stocks in particular could rally, if they look for bad news being a reason for the bounce, it won't surprise me
one bit. dagen: tell me something i don't know. tell me something i don't know. [laughter] >> my grandfather is a jazz musician. no, look, what i can say here, no one likes it, so maybe that's a reason to buy personally, i'm looking if you're smart enough to be short on tech stocks, cover them yesterday and today. i need a 18 handle before i get excited about buying. again, there are people coming out doom and gloom about oil, maybe that creates an opportunity. and i'm looking at august lows and quality oil stocks, i'm not in a hurry here, you know, we're in range here. dagen: buying though, you don't have to buy if you're a trader. if you're willing to really, really hang on through rough times you would be a buyer of select names. >> i would go one step period i would be a buyer of select names, we've had a 9% pullback,
even if we go to a 20% correction, i'm not saying taking a bottom on the s&p right here right now, if you see quality names that pulled back, the last thing you want to be doing right now, dagen, is panicking, is buying into the headlines and saying, oh, my god, the sky is falling, it's not. we will bottom at some point, you want to be long prior to that. dagen: jo, final thoughts. jo: two things, tech stocks looking at apple if that's a possibility there as it struggles against china. china, the numbers there do not point to reality. it's only 48 hours between the last two moves, shut the markets globally. dagen: i want to point out the chinese government put the ban in on big investors selling their shares for six months and then reupped it for another three months when it was going to expire tomorrow. >> they'll probably reup it again. >> and china was a raging bull market a year ago, a massive number of new accounts going
out to retirees in china and saying open new accounts. there are some trading that have no clue what they're doing and causes the problem to get worse. jo: as the chinese government is trying to stabilize the situation, and anti-corruption, and the pressure is on president ping like never before. dagen: and you look at the technology stocks and people are not swayed by what they're seeing. >> don't believe the hype, but getting back to owning quality names. the fact of the matter is with growth slowing, with growth where it is, growth is scarce. eventually there's a price to be paid for so choose your spots here. if you would have held on and had nerves of steel until recently on the august selloff with some of the names, you did get rewarded for it. dagen: let's look ahead, we can't miss today, but we want to look ahead to tomorrow. jobs, 200,000 jobs created. the adp number better than
expected, 250,000 jobs from in the private sector according to adp, unemployment expected at 5% tomorrow. are you under or over, gentlemen, quickly? >> it's an impossible number to get right. what you can get right is rate of change. >> you think it will come to-- >> the nonpayroll growth, going down the back side of this, within three to six months i think the numbers will have one's in front of them. >> i think any surprise will be to the upside. dagen: will it be good for the market if it's a downside surprise? >> i'm not quite clear. i think the nfp number is irrelevant unless there's had massive move to the down side. i'm looking for average hourly earnings and concensus, if we're in line with that or better than that, i don't believe it will be, that will get my attention. dagen: jo ling kent, thank you. >> sure. dagen: mike block, keith
mccollough and michael murphy. right now it's carrying through the open. stuart varney will be all over it. stuart, over to you. stuart: thank you very much indeed, dagen. it's a very big deal that we'll remember for a long time. stocks are about to drop big time. we have no idea how things will stand when the market closes, but we can tell you a half hour from now, the dow will open hundreds of points lower. it's dropped 500 this year and yet again, it's the sharp decline in the price of oil that's a big factor helping drive stocks lower. look at this, $33 a barrel right now. it was 32 and change a moment ago. you've got to go back to 2004 to see an oil price bust that low. in fact, a bust for oil may be good news at the gas pump for you and i, but it's a signal of serious weakness in economies around the world. all right, backtrack, let's go back to where the stock selloff began and that is china. whoa, real drama there.