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tv   The Intelligence Report With Trish Regan  FOX Business  January 20, 2016 2:00pm-3:01pm EST

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focus, as it did last week. what they made of that, you may find this a new shocker for those that missed the debate. the white house people say it is all their fault. all right. trish: you are the one that said it was all obama's fault, right? neil cavuto, thank you very much. the dow seemingly in a freefall. it is off the lows we saw earlier in the session. now just down 378. repeatedly warned the consequences of easy monetary policy from the fed. he will be here, everyone, in just a few months. i am trish regan. welcome to the intelligence report.
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following oil prices. sparking a real flight to safety. you have gold also trading up big. the technical definition is a loss of about 20% in two months time. the dow currently up about 50% on its highs. are we headed there? lori rothman. getting a look at all that is moving right now. some of the world's biggest investors and ceos are meeting in davos right now. jeff flock is at the cme and chicago. oil also in a freefall. $27 a barrel. lori, i want to go first to you. >> maybe you want to look at it this way. everything is on sale. it is now down below 40392.
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falling food prices. 7%. touching just below above $76. oil related stocks and hand him. hitting lifetime lows today. marathon up 3%. these are all up 3%. down 4%. it is the worst season day after day. it just keeps getting worse. volatility index keeps coming in as well. just a little hesitant. maybe a little more optimistic bulls will go there. we still have a couple hours left of the trading session. >> lori rothman, i like it. thank you very much. i want to go to davos, switzerland. our very own maria bartiromo is there right now.
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is there any kind of consensus? is that something you are starting to hear? >> you know, no. a number of people who are basically on the front line of the demand story, the ceo of marriott. saying just the opposite. the broader economy is doing just fine. they want to see higher growth rates. in fact, it is not what these markets are showing with this sharp selloff. i will say this, this is the kind of behavior. this market is showing that kind of behavior that you would expect to a market trying to find a bottom. right now, we have real negative momentum. people will sell first and think later. this will be a term in this buying opportunity. the liquidity story.
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there is not the kind of liquidity in this market that you would like to see given the regulatory environment. steve sports men and jamie dimon were gelling out to everyone that would listen. because they are being forced to all the kind of capital that they are being forced to hold, they will not be able to afford the kind of liquidity. you sell what you can sell. you sell whatever you can see that there is look would it be. i will also say that the earning story is clearly one of the issues. we see oil prices above $26 a barrel. that has real effects. we very well may not be done with this. this market needs to find a bottom. this is a shakeout that they like to steve. perhaps we are seeing the words. they want to be buyers coming
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in. you will see strategy coming out and saying opportunity. >> what about china? that is the big worry. being devalued in the race to the bottom. we are all in this currency war. trying to do whatever they can to prop up these economies and it is not working. >> you are absolutely right. she basically said, look how much the mentality of the chinese is very small, in terms of putting their money into the stock market. it is not a broad-based feeling that you are actually seeing this change in behavior. a pit like bubble. people going into the stock market that really did not understand. there is not that kind of worried. that is a fact.
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we will probably continue to see that. remember, the chinese market is only 25 years old, versus 200 for the west. these are the kind of growing pains that you will see. the investors will say that this is a different story. probably a lot lower than that. this transition of going from an export led economy to a consumer led economies does not happen overnight. there will be pain before things turn around. i think this is the kind of market that is behaving. trish: trying to find a bottom. >> do not forget individual balance sheets. we do see a bit of a positive. you will have a very strong backdrop with a lot of cash going to work in this market. trish: i like it. a little optimism on a tough
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day. we look forward to seeing you again live from davos. she has special guest. you do not want to miss it. oil has really been dragging this market down. that is more than 12 and a half years that we have seen a level like that. hitting $27.19. let's go out to jeff flock. >> off the lows. i have reasons for you to be optimistic as well. the february contract is expiring. less than a half an hour. march right now is trading at 2825. down $1.30 today. much better. some people think that this is artificially low. this is the expiration time. there is reason.
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the iea saying we are drowning in oil. full and ready to start dumping their oil. a building inventory. there are reasons to be bulls. maybe we got to the bottom here. the imf says we are overreact in. being overreacted to buy the market. there will be 600,000 fewer barrels of oil on the market. as i said, the expiration of this contract, has in some ways, driven down the price. it may not be as low as we can think. >> the last time i believed the imf, let's just say i never quite believed the imf. jeff flock, thank you very much.
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steve moore of the heritage foundation. all right. you know, we heard some optimism there. what she is hearing there in dow both switzerland. we also heard a little optimism from lori rothman. we will put it on the bottom. people will start buying. i want to ask you about something. a little less optimistic. that is whether or not we are seeing something here now. it may be somewhat like what we saw in 2007. the fear is that this is not just an equity selloff for the day. this is the result of what the fed has done. we have got a credit crisis that will kick in banks do all that high-yield stuff that people were buying. >> we had six, seven years of zero interest rates.
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i think, right now, you are starting to see a huge pullback. for the first time in a long time, i would say we are looking -- stuart: i worry that we are too. by the way, to familiarize everyone, you are talking about two executive quarters of negative growth. >> i think that it is still a little bit unlikely. the fourth quarter gdp will come in at one-1.5%. first quarter is looking horrific. by the way -- trish: i am more worried about something bigger. you have all of this interest and appetite for high yield junk. it is evaporating, of course. a lot of these companies will
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wind up defaulting on this stuff. you look at the energy set her. a lot of different institutions. a lot of investors. >> junk bonds look a lot like what the mortgage-backed securities look like back in 2006, 2007. i am in washington, d.c. just listen to the rhetoric that is coming out. it is so bearish. we had a debate last week among the democrats. that is craziness. hillary comes out a week or two ago. she wants to raise the capital gains tax. it is all negative for the economy. >> john mccain coming out just a few months ago. you know, american voters are going to blame the president.
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it is not good for the party. i want to hold that conversation a little later. 365 off the lows of the session. this is a buying opportunity. >> a political issue. created by wall street. we were sold this national resort story. america was in decline. you have to protect yourself. this firm is old firm. just as guilty as anybody for creating a whole plethora of idiotic products. this whole notion.
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>> i do not think you can actually play maze companies for doing this. what do you do if you are an investor? you can't take any money. you said that the guy -- >> that is my problem. just because interest rates are zero. that was just idiotic. trish: i do believe in the power of the individual. they were sold with this idiotic story. they needed money. a retiree living on a fixed income.
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it is yield" at its. here is what we can agree on. we are in a situation that is problematic. >> oil is not going back to 100 or even 50. this is the price range it was supposed to be in before people started investing in oil. a certain percentage in goal. this is and nonsense allocation. you want to be in u.s. stocks. you do not have to worry about what is going on. you are still a yield reaching mlk. those alternatives, the real asset classes, not to mention the ones that are shorting
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treasuries, they are losing money on both sides. every major fund family is almost involved in that strategy. >> 2007. >> jumping on. trish: another version of 2008. >> i am worried about the policy response here. everybody, including, people on fox business. we are all obsessed with what the fed is going to do. the crisis am policy is not monetary policy. we have terrible over regulations. they are being strangled. we have to do something to react fast. >> fiscal and monetary policy go hand-in-hand.
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>> we keep thinking we can fix these problems with the fed. we cannot. >> we can. go ahead. >> politically, we are making the problem worse. they decided to sell the strategic oil. it will lead to more bankruptcy. more firings in america. it is collapsing in on itself. seventy-$80 per barrel. dropping the price up like they should have supported housing prices. that is where we will have problems. the government is actually not helping. those countries was saudi
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arabia. we are living on oil revenue. they will start doing, i don't know. >> they like the idea of us providing an idea of our own energy and not be reliant on the middle east. even if it means down in the teens. >> if you want to talk about stupidity, i agree. doubleday stupid is investing in green energy. the federal government passing a bill. it is crazy. the future is fossil fuels. >> we have more to talk about. the start of the year. down nearly 2000 points. where does it go from here?
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the new york stock exchange. joining us right now. doreen. we are off the lows of the recession. we are down just 352. how do you see this day playing out? >> you solve the selling accelerate. a little bit of talk about margin calls. i think we come into this year and into this market. kind of underway with equities. i am not surprised to see a 200-point rally. it is not good today. i think people are starting to hear a little bit of talk about inflation. a raid in interest rates. the fed cannot continue down this path of racing. what kind of a message does that send?
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>> maybe they would like have message. maybe it is the fed. what if you had? another round of money trenching in the way of qe four. would you have a chance that depressing the dollar and thereby creating more demand for our goods overseas and better corporate earnings. can we go by this cycle again? >> we need to do that again. the fact that we can do it is probably somewhat reassuring. they may be so far off the mark. it is probably a pretty good story. >> let's not forget. i know you have some thoughts on this. in 10 dumb with the actual economy.
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here we are living through this economic lays for the last seven-eight years. the markets have done phenomenally well over the last several. they do not always go hand-in-hand. >> i am a big believer in the stock work it. what drives stocks? obviously, it is corporate profits. the problem is, we get these downmarket than there then there is a self reinforcing loop that goes on. how much have we lost to two wealth in the last couple of weeks? that means people are feeling less wealthy. they do not go out and spend as much. >> you look at your balance. you are a retiree. a dividend stock portfolio. maybe i need to be a little bit more careful. >> what i would do, given the last two weeks, i know you will
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cringe when i say this, cut the corporate tax rate right now. >> i can always guarantee. back to the markets for a second. trying to protect yourself in this environment. do you move into those safety plays like a dividend oriented stocks? >> the safest thing that people should probably look at. i think that is such an individual and age oriented question. i think that the best is to talk to your management before you do anything. i do not think that it will go
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away. it will be a big beneficiary of these prices. it is just starting to happen. you will see an adjustment. >> that will be good. that will be very good. you have to have a stomach. >> you look at the market. how do we get where we are today. i think what we talk about the jobs market and how well it is doing, you turn to davos in the demonstration. we are not necessarily equal to the jobs that are being eliminated. i think it is adding to the confusion here. >> thank you so much. we will continue following the market. all y'all.
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the bond king himself will weigh-in on all of this. stay tuned. we will be back with a selloff into. ♪
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trish: we are watching this major market selloff. we are off the lows of the session. we did trade down as low as 556 earlier in the day. while lower oil prices actually mean for the economy. lori rothman. >> hi there. the big question. have we seen the lows? we have, way off the lows. down five 66 on the dow. a level of 28. they level of 32 earlier this session. you also have average volume.
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a lot of action here. february crude oil. some traders are telling me that will give us some relief. testing the problem. we sell crude oil touch only $26 a barrel today. crude oil cannot fall. how low can it actually go? economic concerns out of china. everybody is resetting their goals. their expectations. reallocating their investment. really, that is what we are seeing here. we are touching those scary lows we saw late last august. as you know, we are well into earnings season. again, we are just starting to hear from companies and what they tell us about the international business. for you, as the average
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investor, you have to take advantage of the landscape we are looking at. >> looking at some graphics coming up. there were no geographical places to hide good this market, the dow is off nearly 200 points. it has been a rough 2016 so far. i want to go to gerri willis. she is here with me. looking at some of these big losers. gerri: we were just talking in the break. positive for a nano second. let me tell you what has been going on here. red ink everywhere today. the worst performer today. chevron down 7%. think about that. cisco down 5%. another energy name.
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exxon down 5%. home depot, i found really interesting. maybe home depot would do well. >> that is one of the real concerns. i would have thought by now, it would have been up to consumer spending. more economic growth as a result. >> it has not happened this time around. i think it is because consumers have seen this before. let me show you a few more numbers. to be a winner today. 572 this out. intel and microsoft. sector wise, energy down 5%. financials down 3%. healthcare is one of the few sec or is that is doing okay. i want to give you some interesting numbers. they have a view into that
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consumers pocketbook. they know what is going on. they say that consumer spending is up 4%. they said that it would be up 5.7% as gas prices remained at usual levels. they are saying that there is not much of a benefit at all to lower gas prices. losing their job in the energy sec dirt. >> it is because people are paying less for gas. if they were paying more -- it is a double edge sword for companies like that. you worry about the economy. >> steve moore was just on here. he was making the point that he is concerned about recession coming back in 2016. gerri willis, thank you so much. great to have a handle, as scary as it is, on all the sec errors.
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we have the guy who understand that markets better than anyone else. bill gross. we will get his advice on where it is best to be. that is coming up next. ♪ wealth management strategy the same way to create a financial plan built to last from generation to generation. we'll listen. we'll talk. we'll plan. baird. legalzoom has your back. for your business, our trusted network of attorneys has provided guidance to over 100,000 people just like you. visit legalzoom today. the legal help you can count on. legalzoom. legal help is here. marcoto criticize him fornfair missing votes. "but i am going to miss votes, i'm running for president." but he's been missing votes for a long time. "one third of all of his missed votes in 2015 were missed before he announced he was running for president." over the last three years, marco rubio has missed more votes...
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>> breaking right now. $26.55. through breaking below and more than 12 years.
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and a lot of concerns about what this means for everything else. oil may not be a thought him. certainly a bottom today. not good. >> it looks like a bottom. just picked up $8.75 a barrel just like that. the february contracts have a lot of things going against. they were so low today. lower than where you can actually buy oil. this was in a collapsed mode. what it says about the global economy. should the global economy be a barometer of health. the question is, how much of this is fear or reality. they are not that bad.
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having record oil demand. it is more the fear of what will happen. all of these outside forces that are raising concerns. global economic growth will slow. it will eventually hit the oil price. i do not know if that is true. i know one thing. we are seeing a lot of fear in the marketplace. based on the gas prices, i do not think that they are. >> coming online with all of its oil. perhaps, everyone we adjust their expectations. knowing that there will be more supply. talk to me about the bigger implications of this. normally you say, hey, lower oil. there is another component to
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this. it has the equity market very much on edge. explain to me why people are worried about lower gas prices and what it means for our e economy. >> they are afraid that they are signaling and other recession in the global economy. that is the fear. some of those fears may be justified. energy names, even the exxon mobil getting a selloff. there is talk that one third of all oil and gas companies could go bankrupt in the coming year. there is a fear that there will be a contagion effect. the thing about the supply side is we have known about this supply. they should not be a surprise to the market. we have been talking about oversupply four oh opec for the next month.
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>> it always seems to catch investors by surprise. wait a second. if you are listening to us, you would have heard us talking about this for months on end. thank you very much. always good to see you. lori raab men joining us now from the new york stock exchange. lori, we have been talking about whether or not the market can put in a bottom here. you know, i don't know. anything can happen. >> it is really telling to see the note slipped below 2% today. those are your classic flight to safety aspects. we retouch those august to five flows on the s&p.
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that was kind of a magic number, if you will. there was a lot of talk and a lot of questions whether we were headed into correction. all 10 s&p sectors continuing in the red today. all 30 dow stocks continue in the red today. down for the entire year. year to date so far. we have extraordinarily high volume. continued at this pace, we are looking at something like 7 billion, 6.7 billion shares trading hands. you do not see levels like that unless it is a quadruple witching game. >> sort of a mass consensus there. very high volume. one of the things that has people worried about that bear
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market territory, the transports which have gotten really had over the last few months, the classic definition, you are down about 20% in the major indices. looking at something like that on the russell. we have a dow that is off 10% in the last month. if this thing takes off, you might be in a bear market. >> many of the stocks listed on that index do not have as much posted to china. not so surprising. confirming that the china growth story is not happening. we're getting back to the russell. don about three quarters of 1%. it is the broad-based selloff. maybe this is a fire sale.
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it is cheap right now. you do have this concern. emerging markets. where do you go now? where is the smart money going? the cash expanding? i think so, for a lot of people. >> we will keep checking in here and you heard what lori was just saying there. we will talk to bill growth about it. we watch this selloff across the globe. why is this happening now? what is it about 2016 that has caused the markets to take such a hit. i will have my intel on this. why it could be another version of 2008. we hope that it is not. we will get bill grossman to you right after this. ♪
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♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪
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>> let's take a quick check on these markets. a lot of red on the screen. $26.55. how do you like that?
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almost 7%. this has people very concerned. a systemic crisis here. so many energy companies also much money. energy stocks really trading lower. shares also falling in earnings news. the attached giant reported yet another. we will be right back with my intel. what you need to know. plus bill gross. ♪
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almost 400 points on the dow. why now? why is it. 2016 and the markets taking such a hit. we have been talking about all of these things for months. the fear is suddenly creeping in. we may have a systemic crisis. similar to what we saw back in 2008. low interest rates around the world. foot -- put in place. a riskier product. if you are a retiree and you
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cannot make money on a cd at a local bank, junk bonds start looking pretty good. a bond is supposed to yield an amountf intest. is ettyoughn abw intest re envonme. to g anyntert. getny hled thoutaki onhat sk. mom d pop iesto, th are out ere yingiskyonds stitions, th havall en dointhe me ect tng. ey a buyg higyieldebt chi, lan he. unss, ose mpans an ose untrs ca no nger make the interest on their desk because the economy is in such a bad spot.
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they are now increasingly at default. the economy growing at its weakest level we have seen in a quarter-century. china's ability to make its payment. the same goes for other emerging market companies. their energy businesses are taking a back. investors are often left with nothing. you can imagine. they are getting pretty worried right now. this kind of thing can become a very vicious cycle. the fed and other central banks are stuck between a rock and a hard place. they have been trying. the debt crisis is painful. we have learned it in the early 1930s in this country. there we learned it again in 2008. let's all hope that we do not have to experience anything like a way to again. we will market again.
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oil plunged. concerns over the economy are fueling the losses that we have seen now on wall street. where should you put your money? where are you safe? we will see you right back here. i thought i married an italian. my lineage was the vecchios and zuccolis. through ancestry, through dna i found out that i was only 16% italian. he was 34% eastern european. so i went onto ancestry, soon learned that one of our ancestors we thought was italian was eastern european. this is my ancestor who i didn't know about. he looks a little bit like me, yes.
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trish: okay, everyone. it is certainly a busy day. the original bond king. he will join us tomorrow. if you have any questions for him, let me know. send me a tweet at trish_reagan. we will take a look at all of those things that you want answers to. we will bring them up with him tomorrow on the show.
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this is a pretty massive selloff. wall street heading in now to the final hour. getting slammed by dropping oil prices. all of these fears of a global group slowdown. is the worse still to calm? the american action pharmaceutical treatment. i know that you can put some analysis on this. jim, is this the beginning of something bigger? >> i am afraid that it may be. something bigger coming out of china. out of a global slowdown. one of the things that we're learning now is that the chinese economy is much smaller than we thought. they are having massive outflows. the crude oil market is becoming
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an economic indicator. there is slower demand. a definite to wall street. trish: the one thing i say, we can handle a selloff in the market. the equity markets, they selloff. what we do not want to have to be handling is something in the way of a credit crisis. you hear some mumblings about it. in terms of high-yield and default rates. the energy sector here in the u.s. they really take it on the chin. bringing all kinds of money to expand their energy infrastructure. they may not be able to pay this money back. >> that is right. there was a giant because of cheap money at the fed.
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one of the places they went to was energy sector. if they do not produce like mad, they cannot meet their interest payment. they are saying that it is dead man drilling. that is a problem for the whole market. they just keep drilling like mad because they have no choice. you are right, we do not have a credit crisis yet. what does it take for this to go away? how do we not have this turn into a 2008 scenario. >> i do not think it is. i think it is important to have a death. those are places that have real problems. i think a big chunk of this is simply repricing future earnings. growth is slower around the
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world. part of it is a reaction to normalizing interest rates. they should be normalized. we have unemployment at 5%. interest rates are at nowhere near normal. >> oriole had 26, 27. interest rates going up. i would say, okay. maybe i will take a little money off the table in equities. help me understand why oil is getting killed by that. >> i think that the oil is really three things. global growth, slower demand down. we have oil supply going up for a bunch of reasons. the fracking revolution in the united states. we have iran back on the market. i think the most important thing is we are in a different world.
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the u.s. broke opec. north america is a vast producer of chemicals. it has completely changed the markets globally. spillover to the rest of the economy is much more alluded in 2008. we had a housing sector that was everywhere. the fallout in housing prices. you will not see the same kind of problems. >> i want to go back to you for a second. we hope that you are right. do you agree with that? >> i agree in terms of magnitude. not in terms of importance. we had a financial crisis in europe. it did matter. we have been trying to say the same thing about the chinese economy.
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it does matter. this is a work in process right now. it is bad for the energy sector. it is bad for china. how much worse does a gift for everyone else? where is the bottom? it is not a problem on january 20. it could be a problem in the future. >> when you say that, there is a part of me that kind of record oil. in the days of what happened, so many strategists would say, do not worry. it is only 2% gdp. it will not matter. i hope they are right.
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. >> i think we could safely say we have a banking sector far better capitalized than the one that went into the 2007-8 recession. we don't see that in the banking sector now. the banking sector had enormously correlated assets from the housing sector. i don't think we can believe they contain that much xoesh nurt energy sector. you can't take a big problem off the table. you can't say things are fine, move on. we're not there yet, and with continued strength in the household sector that carried the u.s. economy and policies here and especially in china, you know, disaster can be averted. trish: let's hope it's averted today. one hour of trading left to go. we are off the lows of the
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session, we were down 560+ points, now down just 339. doug and jim, thank you so much. we're heading into the final 60 minutes of trading. liz claman is live for you in davos, switzerland. she's going to take it from here. liz? liz: i sure will, trish. what a day! another crushing day for the markets, the dow, s&p and nasdaq hit new 2016 lose. the dow jones industrial average down 349 points right at this second. what became particularly disturbing to investors is that at low point today, the dow took a hit to the tune of 565 points. the dow crumbled right from the start after asian and european markets sold off. we have to tell you the nikkei in japan is in a bear market. just since the new year, the dow lost nearly 2000 points at its low. the s&p and the nasdaq suffering as well, both down more than 3% at today's lows. oil again, the catalyst or culprit as you want to call it, falling below $27


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