tv Countdown to the Closing Bell With Liz Claman FOX Business January 15, 2016 3:00pm-4:01pm EST
i can pretty much guarantee you the economy is very much going to play in this election as we watch a market that is off roughly 1600 points since the start of the year. as we head into the final hour of trading, you can expect more volatility. we're coming up on a three-day weekend. see you back in new york! liz, over to you. liz: thank you very much, i hesitate to call it a comeback, the breaking news is we have come up off the floor, but we don't want to jinx it. all we have seen is a sea of red. calling it the red tide. swamping wall street at this hour. what have we got? no good news to stop the bleeding into the final hour of trade. dow jones industrials down 360 points, at the worst point of the session, we were down 537 on heavy volume, ahead of that three-day weekend. markets tumbled right out of the gate. this started the minutes the markets opened falling below 16,000 for the first time since september. we're 15 points above 16,000
right now. at today's low, we were down 1600 points for the year for the dow jones industrials. the biggest declines in 4 1/2 months, on both the dow and the s&p. so what happened overnight? china's slowing economy tripped up stock market, the shanghai index tanked another 3.6%, that in turn led investors to believe that the second largest economy will not be consuming as much oil as it has in the past. there's already a massive oversupply, a glut of black gold but china stumble coincides of the sanctions on iran. the rogue nation will be free starting monday to start spilling its excess oil supply into the global market. it's the recipe for a global market sell-off. that's what's playing out right now. no surprise, oil is taking most of the punishment settling below $30 per barrel. we're there at $29.42. as we trade in the after-market
session, we're going to keep it on the lower band so you can watch it every step of the way. the market suffering, moving in lock step with oil, that trade has been on since the beginning of the year, today is no different. we're live from the floor of the new york stock exchange with jittery traders, expect a violent move this hour, they just don't know which direction it will come in. you got to stay with us and watch us right here on "countdown to the closing bell." breaking news, we are officially in correction territory. all three major u.s. indices are outgrowling the bears at this hour. we're looking at the dow, the nasdaq and the s&p more than 10% off their recent highs. the vix or the so-called fear index, we like to look at this to see how nervous the markets are. it spiked today and we see it up. the 28 level. that's a four-month high but traders i'm talking to on the floor, one ran away, peter tuchman, see if he can join us in a second.
his phone is ringing off the hook. nowhere near the capitulation level right now. we got to see it a lot higher if we see the market flush out the worst that is within its genetics at the moment. conviction behind the sell-off, if you're wondering because it's been volume, the spikes are dramatic. no. the trade on the big board is 40% above the monthly average. does that mean we are setting ourselves up for a rally in the next 57 minutes or a deeper route? bring in the traders that we have if they're still in front of the cameras, it's a little busy, alan knuckman, jeff grossman at the nymex. any flows that we might come up closer to the flatline in this final 56 minutes, it is, right now? >> i think at some point people find value. what i noticed here, you talked about the vix, the vix did not make new highs. talk about the august lows in the s&p, nowhere close to the high in the vix.
the fear is not here. sign of divergence may be a positive, but like you said it's very, very important how we close and finish up going ahead of the three-day weekend so people can breathe a little bit. liz: jeff, looking at oil, you could argue you have the situation where there is less demand, the glut, nothing new about that, that couldn't spook the marks but you depose that over iran which starting monday add another 500,000 barrels of oil into an already very crowded trade. >> come on, join the party. everyone keeps loading us up with more and more oil. we're at the point where you have to look at how to put a slant on this, and at this point i don't think the news can get any more bearish than it is. i think the china economy news is still the one that weighs the heaviest on the energy markets, because they've always been the swing user in the market and seem to have backed off here. that's where the realist consumption depletion is where
we were hoping for. it's not there. again, the market couldn't look much worse. so again, i'm one of those people that if that market comes in lower, let's say come tuesday, it may be worth a shot for the market to rally, because no one believes it can. liz: couldn't look much worse. i was seeing this data point, this is breaking. opec's oil basket average, the opec nations is at forget $29 a barrel, it's at $25 a barrel. we haven't, alan, begun to see earnings come in from oil companies, but did see earnings from jpmorgan, today from citigroup, intel, all of them actually beat on estimates, but that is not helping at all, and i got to tweek you because yesterday you stated on the show look, jpmorgan's numbers indicate that maybe the economy is healthier. charlie gasparino did push back on you and say wait a minute, wait a minute, they were able to beat expectations because they cut costs. you want to come back and take a stab at that again?
>> yeah, i definitely do. i'm looking at the new two weeks of earnings, that's going to set the tone. and this morning we got great numbers as far as citigroup and wells fargo. combined they made $9 billion in profit. these companies are not losing money. i don't know why everybody is so concerned. the corporations are doing very, very well. to get back to china, the slowing theme we've beaten to death over four years. if you look at shanghai composite, go back a year and a half, in the last year and a half, the shanghai is positive 35%. yes, it's given back gains but positive overall 35%. we're getting overemotional about what happens with the chinese market. they weren't the cure-all, they're not the disease for the market. liz: you got to stay in place both of you. i'm bringing in keith mccullough on the phone, with hedge eye, he's way more bearish and calling it from an economic standpoint as it
pertains to stocks. you heard what alan said, putting a positive spin on it saying the shanghai is up 30, 35% over the past year and a half. we have the dow down 355 points, definitely a major purge at the opening of the session. is there some new data point that spooked the markets here? >> i think if you look at china specifically and get into the u.s. economy in a second. china specifically don't forget that the front-runner mr. trump was negative and aggressive towards the chinese last night. if you are watching equity futures trade while trump was going after china, they started to fall. that is not being talked about a lot that trump is a risk to the broader economy globally when it comes to the chinese and being antagonistic from a protectionist trade perspective. that's number one. number two is this morning the u.s. economic data. kaulgz as you know, liz, is not a catalyst when you have a recession developing, and not developing in industrial production at this point, it's
in a recession. negative 1.8% year-over-year. liz: keith, did you see the retail sales number missed estimates? when you take out autos and gasoline, extremely cheap and x that out, we were flat on the month over month. >> yeah, that's supposed to be the good part of corporate earnings as you know. it's disappointing. you can blame good weather, bad weather, whatever you want to blame. the reality is, i've been trying to make this point on fox for a while. if corporate profits are negative for two consecutive quarters which we're going to get, you've never not seen the stock market crash a greater than 20% decline. the russell 2000 is down 24% from july, and my view is that the s&p 500 is going to move towards 1700 because that again would be a 20% decline. liz: alan knuckman, back to you, jeff grossman, you are still there. the russell is a total mess. you saw the intra-day picture, i don't know if you can see it,
keith, coming off the lows, down significantly, go ahead, alan. >> about 2.5% lower. not catastrophic. it's not a great week, yesterday we were unchanged on a weekly basis. things are going to happen, major moves day by day until people are settled. earnings are going to give us the settlement, and what we're seeing is earnings decline in growth. the growth is declining. we're not continuing the same pacement the companies aren't losing money, they're not making money at the same pace they were. from a risk and reward standpoint there's going to be value to be selling after it's gone down 10% in ten days, good luck to you. there's probably a bounce, when we get a bounce like yesterday, we're not getting follow through but on a weekly basis, that's what i look for. liz: going into a long weekend jeff grossman, oil will trade in london monday. what's your best bet? a little bounce? catching air?
continue to see the stumble downward? >> i'm for the bounce to this point. they've overdone it to no end. we've overdone things on, say, if you want to go to the moving averages and the like, it's something, and this is a very emotional market, i'm not arguing the point of how much supply we have and how little demand is showing here, and again all the news is bearish as you can. as a contrarian i look for the surprise and everyone suddenly says, gee, it's not going to continue to go down? that may be where we come. this may be a place where you confine that place where they come in lower, you buy them. i don't know how much we can lift our heads here. this market is a sail on rallies for the last month or so. this market is under tremendous pressure. i'm looking for the bounce than the further dip. liz: looking for the bounce. we shall see. keith, you can stay on the phone, keith mccullough for a second? >> sure. liz: keith is going to stay
with us. anthony chen is the chief economist at chase, also a former economist with the new york fed. i got to bring up what the new york fed said today or didn't say perhaps, anthony. bill dudley who runs the new york fed spoke today and did not indicate that the federal reserve would back off their four times interest rate-tightening track that we expect for this year. i find that hard to believe that we will see any kind of rate tightening a week after and the fed was that they were going to be a lot more aggressive than they were actually at the end of the day. so i think that as you go through 2016, i would be very surprised if the federal
reserve raise rates more than two times. so they are going to be talking about this, but remember, they don't preannounce what they're going to do and love to raise rates four times, but if conditions change, they will alter their strategy. liz: they don't want it on their legacy head do, they, keith, that they caused a massive problem. by the way, dow is back down about 397 points. for a second there we were down 400. keith, they don't want it on their heads by tightening a teeny quarter of a percentage point in december, they triggered that, is that a stretch? >> the catalyst is the fed's forecast being as wrong as it's always been. if you tighten into a slowdown you, will implode the market. that's what i've been saying, i'll say it again. if they do one more rate hike, never mind what mr. williams in san francisco is looking for, they will smash the markets, liz. you can't tighten into a
slowdown. they have a huge credibility problem if they back off. the market reset is a volatile situation. liz: we have this breaking news right now. jpmorgan and its experts and i guess anthony you are at chase, they are changing their rate tightening forecast from march to now june, to now june. this stuff is happening as we speak with the dow down 395 points. keith and then anthony, go ahead, finish your thought. >> the reality is that the bond market's had it right all along. they've raised rates and all bond yields have done is fall. that's a little peculiar, isn't it? and the second point is on the credit base, i think this is the finishing point for anybody buying a dip. if you missed the first 300 points on the move on the downside in the s&p 500, you miss the next 150. that's because the credit cycle is in the third inning of a breakingup. liz: anthony, your thought.
index go up 3%. inflationary pressures are going to be hurt a little more. that does some of the federal reserve tightening for the fed without the fed having to lift a finger and throw on that the market turbulence that we've seen, there is no wonder the federal reserve will do a lot less. there is weakness in the manufacturing sector, you saw that in the industrial report, you alluded to it in your report, and i looked at the manufacturing sector, for example, the ism, everybody is talking about the fact whenever employment goes to a low, that triggers a recession. whenever the ism unemployment goes below 50. on average 60% of the time we end up in a recession in 12 months. which is another way of saying more than 80% of the time, we don't. we are going through a period
of slow growth. you are right. the retail sales number is going to end and inventory numbers are telling us the fourth quarter is going to give us real gdp numbers barely above zero. we're going to see a little recovery, not a great recovery but something closer to 1 1/2 to 2% in the second quarter, that does not sound like a recession to me. liz: you never know, now that there's so many moving pieces to the global economy which everybody thought was so wonderful is actually a little bit of a crucible that we can end up seeing, not a crucible and albatross around your neck. keith mccullough calling in at the last second. we're down 386 points at the moment. well off the lows. we had been down 537. for the s&p down 41. we had been down more than 50. this, of course, on a day where oil is experiencing a major route, down about 6%, and we should look at individual names that you may own. today's laggards on the dow
jones industrials, intel getting crushed, though it came out with decent earnings, server business now at $10 billion business disappointed, everyone is wondering where the heck is intel going to surprise to the next time? and dupont followed by disney, "star wars" and luke skywalker can't save the market. up next, part of the trigger problem, iran and the sanctions set to be lifted on that rogue nation. the white house today trying to downplay the impact, but is iran's oil really creating the sea of red on wall street? we have in the chair one of america's top oil analysts. he's gearing up. he's got his exact thoughts on this. you can't miss it. "countdown to the closing bell" coming back. dow is down again 413 points.
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. liz: breaking news. take a look, we have 40, exactly 39 1/2 minutes to go before the trading day ends, and the dow jones industrials climbing back down, we're about 416 points to the downside. the s&p down 46. who knows? i am talking to traders on the floor, expect a violent move. they just don't know which direction in the next 40, 39 minutes. margin calls, sell orders, buy orders, see it all in nine minutes. a clear picture in the final half hour of trade. doesn't help that walmart is shaking up the markets and giving it a little indigestion, walmart is going to close 268 stores globally. by the way, that includes 154 in the u.s. alone, affecting about 10,000 employees. it's the world's largest retailer. we have walmart and it is trading down nearly 2% at the moment. when you're talk about this company, they're saying latin
america, particularly brazil, is extremely weak. you know, i think of brazil, i think of the olympics. what is going on down there, and will that economy color the olympics in a negative way? keep our eye on that. a very important story we'll be watching for you. oil is certainly front and center here. now why did oil fall 6%? a couple of reasons, but you've got to look into what's going to happen in the next 72 hours. iran is preparing, no guarantee they will, we expect they will open the floodgates and oil will begin to flow quite dramatically because the sanctions will be lifted most likely this weekend. and we already have the worry about the supply glut roiling the oil markets, below $30 a barrel, we have that in play off the lows of the session as you can see from the chart here. still at 29 and change. it's a new 12-year low. i want to bring in andy lipow
of lipow oil, i am throwing out the liz claman contrarian view here -- is it possible, andy that iran, seeing what happened today with oil dropping as precipitously as it has, may possibly say, oh! i see we hold the strings to the puppet and say hold back from flooding everybody with more iranian oil for now, and then they look like they have more power over the rest of the opec players? >> well, it's certainly possible, in fact. iran, if the sanctions are lifted will have access to $100 billion in banks, so they may feel they don't have to sell oil right away, but the indications coming out of iran is they really want to start selling the oil that's stored on tankers, and there's about 30 million barrels of that stuff that's ready to hit the markets. liz: you know when you talk about oil stored in tankers, we need to tell our viewers, they have run out of storage.
we're topping off pretty much here in this country here too. there is not a lot of storage left because there is so much pumping. they are now storing it on big floating tankers off the coast of iran. therefore, they got to move that stuff out. they're going to do it at a loss. what price do they need to see oil before they breakeven? >> a little less than $30 a barrel, they're one of the low cost producers like saudi arabia and kuwait but want to maximize revenues and see oil prices higher. they're stuck with opec because you've got saudi arabia, kuwait and the united arab emirates have no intention of cutting production. liz: how much does china and the lack of usage at the levels we've seen in the past because economy is slowing down play into this? can we point the finger at china as well and the slowing economy? >> they certainly contributed because we don't see the demand growth that the market has expected. in fact we see coming out of
china is record amounts of diesel exports which are competing with those refiners and the arabian gulf and elsewhere adding to the oversupply of products. liz: you know, i'm just looking right now, i'm hearing shouting on behalf of traders. we're up certainly off a little of the floor that we saw in the last 13 minutes, dow jones industrials down 386. we had been down 413. we're waiting to see a reset, that's when we see the drama with margin calls, et cetera. andy, in the end, what happens to oil companies? our viewers own oil stocks whether it's marathon, williams, exxonmobil, chevron, apache, anec darko. will they cut dividends in a more meaningful way? >> i think this is the biggest worry from the companies, we have seen marathon oil cut dividends 76%. we're hearing about many of the
other companies going cash flow negative and borrowing money to pay dividends, and i don't think that can last for a very long time, i don't think the banks want to be in that position. liz: okay, i understand that. we see big oil here down -- one second, what have we got here? >> leaning to the buy side, too early. liz: art cashin, floor operator says we're leaning toward the buy side. that would be a bullish sentiment, we're down 377. four more minutes, need to wait until half past the hour before we get the real sense. we're blowing out our commercial breaks, folks, this is too important of a market situation that we have right now. andy lipow, our thanks to you, we appreciate it. one last question, andy, where does oil go next week? >> i think if iranian oil comes back on the market, we're going to be down $3, between 25 and 27, that's one of the big last bearish news events out there, unless the market feels that we're going to go into a
recession and see significant slowing of growth. liz: can you stay in the chair? i want to make sure i have your voice in case we see anything more deep as far as notches cut in oil. thank you. i want to bring in charlie gasparino on the phone. first, where are you? corner of wins low, arizona? >> got off the plane in south carolina. one of the best things about being in south carolina is there was tons of hedge funds guys, they're very into the election. here's the bottom line, you mentioned walmart, before you mentioned china. walmart is negative assessment on mostly the latin american economy, right, brazil? you know there's a slowdown. china is growing but slowing. and there's a slowdown, and if you look at headlines, it all points to a slowdown, and i think when you get that type of sentiment, what you have going here is a lot of the sophisticated investors, people
at big hedge funds, private equity funds, they see this thing going, meaning the dow. about 15,000 before it could possibly recover a little bit. and then -- but that, that not taking into account what's going on in the u.s. still, with all the models, everybody thinks the u.s. economy is going to continue to kind of move along, you know? and at 2% growth, but i tell you, generally it does affect us. so i would say this is a very precarious market. we may rebound a little bit. liz: are you hearing from any of these hedge fund guys on the scene in south carolina that they're ready to make contrarian bets and pick up names on the cheap? all dow 30 stocks in the red, charlie. >> this is what scares me about the market, the only people they hear touting that
contrarian view are floor traders that are talking their books. not the view when you talk to people off the record which is they give you the straight info, they are in here buying bigtime. there is not a lot of contrarian views, when you hear the contrarian views, talk to the floor trader here and there or invest or here and there, they tell you, i think they are pretty good. a gentleman yesterday, it was funny, the guy yesterday that we had on when me, you, and mike holland were talking about whether this was a cube or a flush or like a beginning of a bear market? he brought up jpmorgan. remember jpmorgan had great earnings. what we left out is jpmorgan had great earnings -- liz: i'm wondering i don't think earnings can save us this time. they saved us after markets fell.
>> and jamie dimon, add his name to the list, predicting an economic slowdown. so take it for what it's worth. that's where the headlines are going. liz: charlie, i hope we will see you. you're heading to davos like i am. >> i'm going to see you monday. we're going to do a little davos dish, you know, and drink a couple of swiss miss. liz: go get rest, the world's business leaders and global leaders are heading to davos like charlie and i are going to. we're heading into a long weekend because of the martin luther king holiday. we've got garis ryan in london right now. you are open for trading monday, how are you going to position yourself and how? >> what we can describe as a
tough week in europe as well, liz, in terms of oil, which is really been driving things for the last few things, the only thing positive about oil is the move from $100 to $30 a barrel is a much bigger move than 30 into 20. in the mid 20s for oil, remember brent crude trades on monday over here. the mid 20s, that's where support levels could come in big and hard. >> okay, but are you saying, look, let's pick up bargains here or is the u.s. market not necessarily at the forefront. we're now down 410 point. 29 minutes left to trade. traders are getting a little hyper here. down 44 points for the s&p. the russell crushed, 2% or 21 points. garreth, it looks to me if you're in the trading business and in the let me jump in when fear is the greatest, is there an opportunity you and your
team see for monday morning? >> yeah, i mean equity indexes over here, the dax in particular is in correction territory, down some 11.5% in 10 trading days. that's quite a significant move to the downside. bottom fishing, i would be less inclined to do that until we see several days in a row where chinese markets stabilize. oil starts to stabilize. volatility comes in a little bit and then we'll see the voter equity markets as well. but now oil and china, those are the two things every trader is watching next week. liz: thank you very much, the sun is already down in london, but the heart rate is certainly up, i'm sure, for anybody in the industry because the dow down 403 points on a very ugly day, and it started well before most of us were awake in europe and china. china fell 3.6+%, so the shanghai index continues to get hammered.
down 18% year to date. we showed you the heat map of the dow 30. everything in the red. there is one name that gives us indication of how much other countries are spending when it comes to building up infrastructures, it is caterpillar. adam shapiro is on the story. what is cat doing? reporter: hit a 52-week low, $58.75. hit a 52-week low yesterday. so they keep raking through that. you heard garreth say traders paying attention to oil in china. oil plus china equals global slowdown, and caterpillar reflects that. why? 70% of what they produce is sold outside of the united states. liz: hold on. i want to interrupt you one second, adam, in just three seconds it will be 3:33:33 on the east coast, and traders do have a tradition heading into a long weekend. they either whoop or boo, i
hear a little both. sorry to interrupt you. >> reporter: it is simple, a country like brazil, in economic chaos right now, sales commodities, copperor tag annite to china. the companies, the mines in brazil don't need to buy the heavy equipment from caterpillar when. people say the u.s. economy and our stocks are not directly tied to china, no, they are not. you can see how the contagion spreads through a company like caterpillar. liz: adam shapiro, thank you very much. caterpillar down 1.49, or 2.5% right now. and this market is in a narrow range, between down 414 and down 375 for the dow jones industrials, but i want to grab -- hold on a second. stephen, you can come here? stephen guilfoyle with me. you said to me before the 3:00 hour, you said we could see a violent move in either direction, just don't know which.
what do you see with 26 minutes to go? >> we have options extonight. liz: is that double-witching or triple witching? >> if you can close above 1887, it becomes a less bad day than it is right now. liz: we're at 1880 right now. >> so if we can push this over 1887 and hold it on the bell, upgrade the day from god awful to really bad. liz: the bears are trying to outgrowl each other. do we have andy lipow. he was talking about oil. andy look at what oil had to do with today's route, would you say it's the cause? >> i'm not so sure it's the cause, it's another contributing factor and people are seeing in the lower oil price the economy slowing down in china. seeing a lot of job losses in
the oil patch contributing to slower growth. decline in the rig count contributes to lower diesel demand. it's one of the other factors in there contributing to the sell-off in the equities market. liz: 24, 25, make it 25 minutes before the closing bell rings. jeff flock is on the floor of the cme, and i have sarge on the nyse. what can you tell us about oil? >> we've been watching oil all day, this is the first close in a dozen years we closed at $29.42 off the lows. if you looked at out months, want to ask todd about this, we are at $36.31 for december, you have to go 2017 december before you get anybody betting we'll be above $40. looks like oil prices a longtime low?
>> we're going to be down here for a while. oil prices have suffered tremendously over six months are not coming back any time soon. if you want to look at oil volatility, that will tell you the story. spiking, higher highs as the market makes lower lows here. >> reporter: i want to ask you about the reasons today. china, serious concerns, but iran, too. we put up the numbers on iran. looks like it's going to hit the markets sooner than we thought. look at reserves, a country with 150 billion barrels of oil of reserves and they're ready to start pumping. >> just because they couldn't export it doesn't mean they can't pump it. they have a boatload of supply and they're going to influence the market as saudi arabia is pushing oil prices down, this is a wet blanket on the oil market. >> no positive news in the market? >> except for you and i, going to the gas pump and pumping sub $2 a gallon gas. >> reporter: you know where the
dividend, the savings went? powerball, that's where everybody spent the savings on gas. powerball. liz: and see where that got you? a couple of people did win. sarge had a question for todd colvin. >> as a guy who trades oil, does he think 20 before 40? liz: 20 before 40? >> i see 20. i think 20 before 40 for sure. 40, we're going to make lower highs on the way up, may see a few bounces but ultimately oil is pushed. it won't get to 20 but it will get to the low 20s when all is said and done. liz: great to see both of you, you know how cold a day it is for investors when jeff flock is wearing a parka inside. not that cold here. >> reporter: we had protesters this morning. i had protesters this morning. liz: they should be protesting this market. that's about it. thank you both, very much. busy traders coming before our viewers, and now we have 22, 22 minutes before the closing bell rings.
we have the dow jones industrials down 379 points. we are watching for any kind of dramatic move in the last couple of minutes because as we go into the long holiday weekend, the question is as we look further out, how bad is it? we don't want to overstate it or understate it. that's where sam stovall comes in from s&p iq, get your sense of where we go in the next three to six months? is it recession? is it a stock recession? because we certainly have a correction for all three major indices. >> hey, liz, i think in the next three to six months we're going to be whipsawed like we have been over the last couple of weeks. historically what we find three months after the fed starts rate tightening program, we see about a 70% increase in volatility, based on the number of 1% trading days. the real question they think both investors, bulls and bears
are trying to figure out is, six months from now will we be higher or lower than where we are right now? our expectation is that we could still end the year in a plus note, that we actually have a year-end target of 2250 for the s&p 500, but we're starting to see earnings estimates come down, now 6.3% for all of 2015, versus the 8% gain that was estimated in the beginning of december and the 7.4% gain seen in the beginning of january. unfortunately the trajectory of earnings increases for 2016 is starting to look like that of 2015. liz: so if i'm hearing you right, you're saying earnings may disappoint, and i do have to say because earlier this week it jumped out at me that a different strategist, alan edwards, come out with an outrageously bearish scenario, he said the s&p could drop 75%
from recent high of 2100. i don't mean to throw a lot of numbers at people. that put the s&p at 500. right now at 1878. down 42 point. do me a favor, sam, stay right there. i want to bring the yang to the yin. the 10-year treasury below 2%. what opportunities were you seeing today as you looked at all your computer screens, kevin? >> you know, liz, the treasury market trade was almost reactionary from the beginning of the year. the fed starting to tighten and begin a cycle. so as china, as oil, as the equity markets started to deteriorate, we saw a safe haven trade first. now, after the economic numbers are coming out that accompany this, we're starting to see mover a trade that goes out longer, is in bigger size and
starts to focus on whether this economy can withstand this. so right now, it's still intermediate to long trades, quality is the key, and we're likely going to start the year much like we have in seven years prior with the thought of higher interest rates only to end up lower. liz: who looks like a genius, kevin? people who went in and stayed into treasuries when it looked a little tough? >> you haven't seen a big wide swing. in other words, we started maybe at 210, 215, drove it up to 219 and right now pushing 2%. no one's missed the trade to this point if you held or sold and can buy back. i think the move that's going to matter is whether the economy starts to roll over a little bit, and then 1.75 and 1.5% on the ten-year is the next area where the trade needs to occur. right now i think people are still in a safe haven mode but
won't last long, probably. liz: sam, people may be waiting on the edge of their seat waiting to hear from you when all ten sectors in the s&p 500 are down. things that we thought might work, the consumer durables or the names of the procter & gamble or the consumer names like the kraft, the diageo, really in trouble because people might not be spending even on things like that. what looks good from here to the short-term? three to six months? >> when things look bad, they all look bad, they look bad by varying degrees. in bear markets, and we're not in one, in bear markets, typically all sectors are in negative territory. those that fault least are defensive and they are your food, beverage, tobacco, health care, utilities because the demand for the products and services remains static. but they still fall, and it's the cyclical ones that get hit the hardest as you were talking
earlier about caterpillar. liz: caterpillar down about 2% or more, and there's really nowhere to hide, at least with the dow jones industrials, a nike, a highflier is down. but you look at financials. we got citigroup numbers and wells fargo numbers today, and they did not help the market, though the numbers were actually pretty darn good. gerri willis was looking at those. you've just gotten in the chair. i want to say earlier in the week goldman sachs was a laggard, now with jpmorgan doing well on numbers, it's not a place to hide. >> it is not a place to hide, liz, you got that right. look these numbers, there were five banks that reported, citigroup, wells fargo, others, all of them came in and met expectations largely or beat them and look at these numbers, down 7%, citigroup, down almost 4%, wells fargo.
looking at these numbers, you got to ask the question, what would be good news to this market? i guess nothing. let me give you details on. this citigroup at $1.06 per share on revenues of 18.64 billion. a very positive report. interestingly wells fargo is the country's third biggest bank, citigroup moves down, wells fargo moves up. 103 eps, 1.03 on earnings on 21.6 billion on revenue. this is a relatively good story in the financial sector. as you know, we've been expecting good rates with the higher offing, should produce boosts in the organizations. the market is not giving anything, not happy about anything today and the bank stocks getting sold off. as we take a look at u.s. bancorp, 79 cents a share, eps $1.87.
regents $1.21. these are regional banks at the bottom of the chart, they're struggling too with the share price. as we look at a market selling first, asking questions later, liz? liz: that is a great way of putting it. with the dow jones industrials down 386. exactly 14 minutes left before we hear the closing bell ring. i heard a trader say ring the bell already! they're exhausted from this particular day. you have to bring all of the roads back to oil and energy. it's the worst performing sector right now. joined by tim leech, chief investment officer at u.s. bank management. getting loud in the final 13 minutes of trade, tim, the energy names, it hasn't been forget a great day or great month, horrific six months, where do we see the flushout with saying it's a filing for bankruptcy help?
>> this is a very, very tough market as you said, liz, especially in the energy sector. our view is that investors have really kind of are looking too hard at low oil prices, which to a certain extent feels like investors are expecting a global recession or if not a u.s. recession, and we don't see that. times are hard in many different areas, but generally, as that kind of market sentiment washes through, we should start to see stabilization over the next three to six months. liz: people, we've got other voices in here, andy lipow and sam stovall. i can feel people e-mailing me and saying what do i do? sam, your dad has been a giant in the industry. when you were yay high, a teeny little kid. what would he say to do on a
day like today with a 401(k) or pension fund? >> don't become your portfolio's worst enemy. that we go through challenges. we go through them all the time. we're right now in what's called a correction, a decline of 10-20%. what's amazing is that on average, the market has gotten back to breakeven in only four months after bottoming from a correction. even if we hit a garden variety bear market, meaning one that goes from 20-40%, we tend to get back to breakeven in about 14 months. so if you don't have 14 months to wait, you shouldn't be in stocks to begin with. you don't want to compound the problem by selling at the low. liz: yeah, the great advice through sam, his great dad bob, we love forever and ever. andy lipow, that is a harder thing to do if you own the oil names. we keep bringing up the fact where there are etfs where you
double short oil, a great trade today, last i checked it was up 11%. is that the way to go? to take that chance or do you get flat-footed if there is a sudden rally out of the blue? >> i wouldn't go into the etfs, i think it's time to go into some of the producers. liz: really? >> the market looks so good right now. and if your time frame is two to three years oil is going to rise because world oil demand continues to grow. if you look out there and say marathon oil cut the dividends, the stock is reflecting lower price. pioneer resources hedged through 2016, so they're going to have a good cash flow and be one of the survivors and, of course, exxon is not going out of business, they're big enough to survive this, i don't want expect a dividend cut from them. one thing people aren't asking
is if world oil demand grows 3-5 million barrels a day from now to 2020, where is the oil going to come from? the answer is it's not coming from $30 oil. liz: art cashin, the operations chief on the new york stock exchange says there is 2 billion to buy in the final minutes of trade, 9 1/2 minutes, the market is still down 381 point, putting it into perspective, down 537 earlier today. s&p holding onto losses here, a lot of bloodshed, down about 40 points. i want to bring in mark vintner of wells fargo. the sentiment of the market is obviously colored red and horrifying. what does it mean to a guy like you who worked on the floor for years? i want to stretch it out versus the last nine minutes of trade.
>> a long weekend is not something people are looking forward to. so much potential for things to go wrong all over the world. you're looking at how china is trading. all the risks are stacked to the down side, so folks are not likely to get long going into the weekend. so it certainly -- that's the general sense right now. i don't think there is anything out there that gives you the comfort level that oil has found a bottom yet, and until oil has found a bottom, until we have a better idea what's happening in the chinese economy and how much further it's likely to slow, i think we're going to continue to see days like today. not in succession but certainly for sometime to come. liz: as we look at the percentage losses on the major indexes. it's the nasdaq which has a lot of technology names within it that is hit the hardest.
down 2.75%. looking at technology names as we pull these up. intel came out with numbers yesterday. the world's largest semiconductor chipmaker, they have decent exposure to the global market and china. so does qualcomm. so does nvidia. apple down 2.33%, 2.25%. which tends to have the biggest weight when it comes to jerking the s&p and the dow around, alphabet, which is google down nearly 3%. look at microsoft, dow component, down nearly 4%. adam shapiro, what have you got here with 8 minutes to go before the closing bell rings. >> want to talk about some of the stocks which are performing well today. one hasn't done well in a while. chipotle. they're up almost 5%. partly because they said they're going to close stores in february for half the day. all stores nationwide to go over the security issues with their staff over cleanliness
issues, making sure you wash your hands and people are dressed properly. best buy up today. gap up today. in particular when you talk about best buying up today, not a wonderful holiday season for some of the retailers, and yet we heard earlier that some of these stocks would be -- some of the defensive positions, who would have thought best buy and gap would be among those. liz: that's a triumph, if you are able to move 74 cents higher for best buy on a day like this. and gap? gap, which has been a really ugly picture, i like their stuff, but i feel like gap cannot catch a break. i want to bring back kevin from raymond james, you are the fixed income guy. are there quality bonds, aaa, aa rated that you say take a chance in there right now? >> if you stick with quality, liz, and i'm talking about aa or better whether it's
corporate or mortgages backed securities that are highly rated or securities that are highly rated. you can take a flier out the curve, we have taken inflation off the table right now. i think the financials were interesting conversation, and most of the banks got ahead of themselves because the idea was that with raising interest rates, earnings go up with that, and now when we look at fed funds futures, there's a greater chance for a cut than the meeting coming up on the 27th. you have to be cautious. five years and out, five years and ten years, high-quality corporates, high-quality municipals and agencies mortgage backed are a solid play right here. liz: so glad you brought up fed funds futures. i want to bring back tim leech at u.s. bank wells. what traders bet on whether we will see interest rate tightening. i had a trader tell me there is
actually a tiny bid for a rate cut, the week after next. is that even a possibility? are you talking about that on the trading floor? >> liz, no, i don't see that. no, our stance and our view is that the fed is likely to be in slow mode and likely the next increase is in june in our view. not a rate cut. liz: and mark vintner, what about you? seeing about a 16% bet that we'll see a rate tightening? now it's march, not even january. you heard tim mention june. now what? october? crazy! tim leech? >> oh, no, i think that the fed is in a very difficult position because obviously inflation has gone the wrong direction for them to shore up the thesis of trying to get into a regular
routine of getting normalization of rates. and i think they're going to be hard pressed. that's why we've been pushing it back a bit. liz: mark, what about you? okay, i don't think we can hear mark. there we go, okay, go ahead. i do, i do, i hear you, go ahead. >> you got me now? okay. we're also a june, we felt we would only have no more than three rate hikes this year, and that's to be determined. i think that the language that we hear in the statement in the january meeting is probably going to be the only thing that is significant that comes out of that. and so far, the fed has not led on that they're all that concerned with what's going on in the global economy and that's one of the reasons that the market took the second leg down after we got the comments from bill dudley this morning. >> amen, you are absolutely right. we had the san francisco fed president not acknowledging, i would say, that we've got a
more serious picture and problem here with the u.s. economy. so two fed heads in the past 24 hours not acknowledging what you see on the screen that pairs with economy that doesn't seem to be giving us great numbers. we saw the retail sales numbers. right now 3 minutes, 3 minutes before the closing bell rings. down 394 points. tuesday morning, we see a pop after the drop, don't be surprised if we're in the green a bit. liz: we're down 408. what did i warn you about?
we could see a bigger move in last couple minutes. we were down 350 to 370, we're down 401 on dow jones industrials, all 3 major indices, into this final couple of minutes of trader in correction territory. you are 10% off of the recent highs. in the case of the russell that is is more than 12% off, thank you tim leech, mark vintner, sam stoval, charlie gasparino, andy lipow, our traders on the floor, that is it for "countdown to the closing bell," we're in a precarious possession to long weekend, i hand it to david asman and melissa francis, a chock-full show, nobody move, after the be the bell and we have earnings. melissa: watching a major sell-off on wall street, the
dow looking to end below 16,000 for first time since the end of august. dave: what 14 you do with your money? we have you covered with exper analysis. >> fox business republican debate dominating headlines in social media, we have howard kurtz, brett baier. with their list of last night's winners and losers. david: do you plummeting over 380, down over 400. now, but, this thing could settle either above or below the 4 pu00-point loss on the dow dow, every indice below 2% . oil started it
[closing bell ringing] that is since december 2003 oil closed below 30 dollars a barrel. melissa: we go straight to dan of private wealth in chicago at the cme, talk to me about the sell-off in oil, does it have momentum going into next week? i guess we don't have dan. you can see crude oil on the day, david, like you said, trading way below 30, that is what made the difference on the day. david: straight 5% down, a lot of questions about whether it was iran. because iran will be loosening some oil they had in barges, millions of barrels they have been stock piling. which is sitting out in barges in the gulf, as early as monday they may put it on the market.