tv Countdown to the Closing Bell With Liz Claman FOX Business February 8, 2016 3:00pm-4:01pm EST
you heard some of our commentators earlier, montel williams included, talking about his performance in the debate, and they think he'll be a surprise candidate. so a lot to keep an eye on. it's going to be an exciting 24 hours. in the meantime, we've got 60 minutes until the close. liz, to you. liz: thank you, trish. we've already got some excitement, dow jones industrials tanking, lore i by 53 -- lower by 353 points. the year of the monkey is off to just a terrible start if you're not a monkey, but a bull. look at the dow right now, down 401 points, at the moment we're off that but a lot can happen in this hour, and the sentiment is quite negative at the moment. down 350 at this very second as persistent fears of global weakness are causing a major rout in stocks at this hour. the dow and the s&p and the nasdaq are all down more than 2%. listen, financials are extremely
ugly at the moment, but you can also throw tech and energy stocks in there as well. all of them are leading these major indexes lower. this after europe sold off in a big way early this morning when many of you were asleep. the s&p 500 at this moment is looking very weak, down 467 points -- 46 points, that's a 2.5% loss, on track for the lowest close in nearly two years. the nasdaq is getting smashed any way you look at it, trading at its lowest levels since october of not 2015, but 2014. today's selloff follows a hammering last week that culminated in paper losses of some $800 billion for a lot of you out there combined. now, you cannot only blame oil on this, but we should tell you once again it is one of the catalysts for a lot of the negativity here, dipping below $30 a barrel in the aftermarket session. we're till there, six cents below $30 a barrel at the moment, but wait until you see the screaming signals we're about to show you from bank stocks to treasury yields.
we've got it all covered live here from the floor of the new york stock exchange with all of our traders and experts. plus, the bond kick is here, bill gross with us live. he is pointing a are sharp finger at what he says is now to blame for what we're seeing today and what he says we're about to see. you need to hear what bill gross has to say. we're just an hour from the closing bell but hours away from those first votes in new hampshire's primary. while the latest poll shows donald trump has a really commanding lead, it is now the second spot that is in serious question as one candidate makes a major move, a significant move. our political panel tells us who might win that race for second place. chipotle stores, finally opening their doors at this very moment. they have been shut most of the day in order to train staff on food safety issues. will the burritos for all help the stock price? adam shapiro on that.
we are less than an hour to the closing bell. traders here on the floor of the new york stock exchange are bracing themselves for a why would 59 minutes, so let's start the "countdown." ♪ ♪ liz: breaking news, we are enduring what appears to be an extension of last week's selloff and global rout in stocks. again, last week it was technology and financials, this week it's a whole bunch of other issues. but the dow jones industrials right this minute, we are down 352 points standing at 15,851. there is very little that is working today. if we were to point to one thing, the obvious thing is gold. the gold bugs are doing the bull dance at the moment. the precious metal pretty much the safe haven of the moment along with treasuries. we'll get to that in a second, but gold is up more than 3% today. this, what you're seeing on the screen, is the biggest rally for gold at the moment, up more than
37 in more than a year. it may be the year of the monkey -- no, not the baby puppy monkey from mountain dew, but the actual year of the monkey. investors are dead serious about preserving the capital they have, and in doing so they are rushing into treasuries. the yields are plummeting at this moment. the yield on the ten-year, 1.74%? yes, that's what we have at the moment, 1.74%. that's the lowest in a year. so that is a big safe haven move at the moment. and the mighty greenback is actually getting trounced by the yen, but that that's less a stoy about the dollar and the yen, moving interest rates to negative percent. so the dollar is hitting a 14-month low against the yen, but you can sees the a mixed picture elsewhere. we do have a little bit of strength in the greenback. if you had to point to one thing, folks, it is financials at the moment. when you see that the dow is down 340 points, it's financials worldwide that are dragging down
today's global markets. overnight we had a real serious situationing when it came to european stockings. the european stocks index, stoxx, is down some 20% so far this year, but the financial stocks, 600 stocks in europe's world down 24% over the past year, more importantly, down 5% overnight. the entire street buzzing about yelp. did you hear about this? earnings were accidentally released in a mispunch to the market too early. yelp earned 11 cents adjusted on revenue of $153.73 -- sorry, $153.73 million. that did top estimates, but the stock is dropping after yelp announced that its cfo is out. this is the guy who's been with the company since 2011, so people don't seem to like that news, yelp trending down by 11%. let's get to the meg story right now -- megastory, it is the financials that are floundering today.
banks are the biggest laggards on the dow. goldman sachs, citigroup, bank of america, all of them are getting hit very hard at the moment, but also important to keep an eye on, two names in particular for the european financials. i mentioned the financial stock index, this combines 60 to 0 european financials down 5.5% overnight, down 24% over the year. names like credit suisse and deutsche bank, you can put those two up. those two names are trading at levels below the levels that we saw at the height of the financial crisis, 2009. that's scaring a lot of people, folks, they do not like to see this. traders here at the new york stock exchange, stephen guilfoyle, ira epstein at the cme, luke at the nymex. but first to yo i and -- to you and, by the way, steve, you said there's so much ugly up there, it's hard to pick out individual names. >> it sure is. you said the financial sector, you mentioned tech. the consumer's unhealthy, but what's really unhealthy is the
material sector. with a weaker dollar, we should see outperformance from that sector, and it's just as weak as everything else. it's a flight of quality, and that quality is gold and also treasuries. liz: gold has not been quality at all though over the past year. >> that's changed a little bit. it's up at $1200, gold has turned. in my morning note today, i raised my allocation to gold which was $25 ago. liz: oil is falling, so when oil or at least crude demand is a barometer, luke, health of the world suddenly this is a bad thing that people are seeing at the moment. why did oil fall today? i know there's a story involving a meeting between saudi arabia and venezuela that yielded what, nothing? >> yeah, same old story, a lot of meetings meet but -- meetingo decision on whether they're going to get together or not. another thing we had was rumors about a company looking to restructure, chesapeake, so that scared a lot of people.
european open was ugly, and oil went below $30. that's not good news. that $30 level is a big psychological level, and when you talk to bill gross, i wonder if he talks about demand being pulled forward with all the easy money the last three or four years and growth being zero or near zero for the next three or four years. liz: again, and we do remind you, thank you, luke, for bringing that up. bill gross is going to be joining us in a few minutes. when you see this behavior on not so too much of an individual headline, stephen, that becomes worrisome. >> all the macro has been terrible, and the friday jobs report was pretty awful also. i think it's fair to say we're headed for at least one quarter of negative growth in this country, whether we hit the textbook definition of recession, i don't know. liz: ira, i need to find out from you what you see from the pits at the moment. last we checked, everything was really down. >> yeah.
the flow is to be buying pons, notes -- bonds, notes. it's selling in the s&p pit pretty aggressively, and traders are scared. but this is just like the first quarter of 2014-'15. we were down, and if you go back to what you and i were talking about, liz, things were ugly. i this -- i think they're going to be ugly this quarter. i don't think they'll be quite as ugly the quarter after, but they'll be ugly. maybe the second part of the year is where we get better. we have to understand these negative interest rates, they are a culprit. they're not a fix. they're a real bad negative. they're pulling our interest rates down, that's why the financial sector's getting hit. the fed couldn't have had worse timing on a december rate hike, seven months earlier, maybe, but when they did it, it's had no impact at all, and that is scaring traders bigtime. liz: okay. well, we're going to get more clarity in just a second from bill gross, so i want to thank all of you guys. i know it's a very busy day. dow is still down 328 points.
the russell, small and mid caps, down 2.5%, lower by 24. so we're seeing that flight to quality in major proportions, so we said, what do we do? we call in the guy known as the bond king, bill gross over at janus. he's going to tell you a couple of things. number one, his biggest fear at the moment. number two, if you have to choose between gold, dollar, treasuries or nothing, where would you put your money in a safe haven at this moment? he is going to give you the exact answer. i don't know what it is, that's why i'm staying tuned for that. and the fed, will they even continue raising rates at all for the rest of the year? bill gross coming up, "countdown to the closing bell," we've got 50 minutes before that closing bell rings on a very rough day for trading. stay with me, i'm live from the floor of the new york stock exchange. ♪ ♪
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hasbro today, the toy company. better than expected earnings in very large part due to the force of "star wars." the "star wars" brand and, of course, they've got all of that ability to sell those branded toys, is bringing the markets at the moment at least for hasbro barely higher. so that's a big jump when you look in the aggregate of what the rest of the market is doing. now, on a day where volatility is spiking anywhere up by 14%, bonds are obviously the bet to be made. when you look at the yields for the ten-year, it is now at levels we haven't seen in a year. it is so unbelievably low. at one point, what is it, 1th 74%, guys? i can't see the board yet. anyway, what is the most respected name when it comes to bonds, it's bill gross. he's now at janus capital, he's joining me now. bill, i'm glad you're here on a day when the ten-year yield is dropping so precipitously.
right off the bat, is that the play you would recommend simply to preserve capital versus get return on capital at this point? >> well, certainly. even at 1.7%, you know, that's a positive return, and the question becomes, you know, do bond prices continue to go up reflecting lower yields, or do they go down reflecting higher yields. i think the fed, for instance, in charge of the treasury market basically has so to stay where it is or maybe even lower interest rates or have a renewed quantitative easing program at some point. so a treasury ten-year yield at 1.7% on a long-term bond, you know, basically are relatively safe certainly from the instant poind of principal and i think from the standpoint of market price as well. liz: am i hearing you correctly? you feel it is possible where the fed is put in a position where it has to take back that quarter percent rate hike they put in in december? >> yeah, and i think it's going to be difficult for them to do that because they've been
walking up the expectations for several years in terms of raising interest rates. but it's obvious that on a global basis, and the united states and the fed, you know, is the global banker for the world, it's obvious that an increase in interest rates has dramatic repercussions in terms of risk as is sets, equity prices and global bond prices. so i think at some point they're going to have to rerethink what they've thought for the past several years. liz: we've got this massive selloff in financials. as they go into a tail ship, what's at work here -- tail spin, what's at work here? net interest margins, there's so much pressure put on? banks actually like when interest rates are higher, for our viewers that don't know that, so they can get more money on that, but it doesn't look like that's happening at all. >> yeah, i think that's right. obviously, they've extended loans and we don't know how many and how much to energy-related commodity producers on a global
basis not just here in the united states, but european banks as well. i've heard mention that credit suisse and deutsche bank are at relatively significant lows. but the net interest margins that you mentioned, a bank and an investment bank needs a very positive yield curve. they need to borrow short and lend long at a decently-wide spread in order to make the margins and the money that they've made historically. and when they don't, when the yield curve come presses and that margin doesn't exist, you know, bankings are having problems. liz: yeah. >> it's a two-front type of war at the moment. liz: bill, i hate to invoke the r word because i'm an optimistic person, but are we going to go into recession here in the united states? not because things are so horrific here, but because globally we have a slowdown that seems to be very tied to what we're doing here in the united states? recession or not? >> yeah, i think in the united states we can stay above the
line on a real growth basis in this particular quart or, maybe in the next quarter. what's important to me and i think what should be important to central bankers is nominal growth. they want not only real growth plus inflation, and, you know, it's important in the united states to grow by at least 4% nominally, that's real growth plus inflation, and we've only been growing by 2.9%. i think it's fair to say we might have a nominal growth recession over the next 6-12 months. liz: you said last week in your note, you've got to stick with plain vanilla if you're going to be safe. let me throw these choices out to you: the greenback, which seems to be doing relatively wall, treasuries or bonds, even gold that you would say, okay, park it there, that's plain enough for you? >> no, i think treasuries are very plain vanilla in the five to ten-year maturity area. gold is subject to the whims of the marketplace so to speak and
to a further decline in interest rates. you know, risk assets and even the dollar, i think at this point if the market believes that the fed will stop raising interest rates and maybe at some point like i'm suggesting, you know, begin to move in the other direction, then the dollar could be weak relative to the yen, to the euro and some of the stronger emerging market countries. so i wouldn't be investing in the dollar at the moment. liz: okay, yeah. that would be counterproductive if the fed has to put the brakes on, you're saying stay out of the dollar. i have to then turn to just the worry overall for you. what worries you the most that people aren't watching but should, bill? >> well, that -- i think it's china, and you and others have talked about china add infin tunnel for the last 6-12 months. what is the growth rate in china? they claim it's 6-7%. i'm suggesting that perhaps it's much less than that, and china's
a highly levered economy with too much debt relative to, you know, their cost of funds. so i'd be looking at china. they've got a week's holiday here where we can't exactly look at their markets, but china is then engine for the global economy at the moment, and if china can't have significantly positive growth, then the rest of the world has problems. liz: bill, you know, we were talking in the break, and you said this almost looks like the big short part two. how so? that scared me. [laughter] >> yeah. i think in a way. and not from the standpoint of a lehman's crash, but from the standpoint of too much debt. back in lehman days, the subprimes, there was too much mortgage debt, and the cost of that debt as the fed raised interest rates to 5.25%, you know, was too high. i think what's happened now is that there's too much debt on a global basis, and emerging markets -- even in the united states to some extent, and the cost of the debt, you know,
basically is too high relative to what can be managed or what can be covered. and so to that extent, it's a big short part two. and what does that mean? well, you know, we should have shorted china six months ago and all the associated areas. commodities, oil, anything that china wanted, you want to be short of. liz: i'm sorry, just to clarify, do you still feel that way? would you be shorting china here? >> well, i certainly wouldn't be investing in it. i'd be watching. just how fast they can really grow. if china can't grow at 4 or 5% like the market expects, then the rest of the world, you know, simply can't grow as well. and some of the bad loans will become more obvious to companies which is what china, you know, basically has produced in terms of a bubble type of atmosphere. so i'd be very leery, and i'd watch china over the next few
weeks to the extent that that's possible. liz: okay. so stay out of the dollar, the fed may have to reverse and cut rates. there's a lot that just was said in this interview that we really appreciate your perspective because you've been a market participant for a long time. we're thrilled you're here. thanks so much, bill. >> thank you, liz. liz: anytime. bill gross of janus capital. okay, so while bill was talking, guess what happened? we came well off the lows. still down 263 points but a far cry from a loss of 401 for the dow jones industrials. the closing bell ringing in 37 minutes. paypal and ebay, you're watching those two stocks because they are pushing the nasdaq lower even after paypal spent all that money on an ad for the super bowl? wow. we'll talk about that in a minute. and donald trump is still holding strong in the polls in new hampshire, but what new hampshire says and what they do could be two different things especially when it comes to second place. coming up, we're taking it up with our political panel here. matt schlapp and chris hahn
liz: so what i find very interesting is the nasdaq. the nasdaq is still leading the markets lower even though it's financials as a sector that are getting hammered, but the nasdaq at its worst point was down 151 points. when you look at what it's doing at the moment, down 131, it still --111 still looks ugly. the fang stocks are really faltering today. we have about 33 minutes before the closing bell rings. let's get to another stock, twitter. the little bluebird is having real trouble even catching any kind of air at the moment. shares of the social media micro-blogging company trading
below $15 for the first time today from its all-time highs, the stock is down floorly 80%. so we've got it at $14.82 at the moment, down five and two-thirds percent. twitter just hasn't been able to get any air, but the real problem was that over the weekend they said they were going to decide algorithmically what you wanted to see. no, no, no. people use twitter as a breaking news poll. they did not like that. some word on whether that was simply a rumor or whether it's going to happen, let's hope it does not. let's get to new hampshire because people look at twitter for a lot of the breaking election news. voting starts in just under nine hours in three small towns in new hampshire. the famed dicksville notch, you've all heard about that, parts location and mills field. donald trump still has quite the commanding lead, and we've been saying that for quite some time, about 0%, but it look -- 30%,
but et looks like this is the race for second place. one candidate who surged in iowa, of course, was senator marco rubio. but you heard about this over the weekend, and if you didn't, we're hear to tell you that senator rubio was the main target of saturday night's debate with the candidates really continually pounding him and then using the word "robot-like," when it came to the fact that he started repeating the same answer several times to all different issues. listen. >> and let's distill once and for all with this fiction that barack obama doesn't know what he what he's doing. here's the bottom line, this notion that barack obama doesn't know what he's doing -- >> there it is. there it is, the memorized 25-second speech. [cheers and applause] liz: that is very bizarre. people found that very strange and, in fact, one of the comments i was getting was he looked like one of these wind-up dolls from the '70s where they only say one phrase. okay. so what do we do about this? will it disrupt rubio's momentum that he got in iowa, and is one
stumble really the end of everything? of course not. but does it open the door for candidates who've been dying to surge forward? joining me former deputy assistant to george bush matt. schlapp and chris hahn. we talked about rubio, i don't want to spend too much time on one bad night, but that did look bizarre, and immediately chris christie pounced on that. >> yeah, that's right. we all saw the famous speech where marco rubio grabbed for a bottle of water, i kind of wondered if he was going to grab for a first aid kit. chris christie was just pummeling him, and he was bleeding, and it was a terrible night for him. i think it's no question it slowed his momentum, but i agree with you, i don't think one night will determine who our nominee is. liz: if that were the case, the guy who's really making a play for number two, john kasich, would have been out a while ago. he joined us on the show friday,
he was coming up on his 100th town hall meeting in new hampshire. he's poured everything in, and it looks like it's actually working. but does that have legs? does it have a long tail? >> well, i think he's going to do okay in new hampshire. whether he does well on the march 1st primaries or in south carolina is a whole other kettle of fish. look, he's going to be -- he could be the establishment candidate. look, i think marco rubio's stumble significant because it plays into the narrative that he's very thin on issues. chris christie really took him apart there and really hit him. and the thing that really is confusing to me, marco should have saw this coming. christie had been projecting this all week, and he didn't deal with it properly. he was marco roboto on that stage, and it didn't work out well, and it's going to hurt him. i think this probably cost him. i do think this cost him the nomination. liz: really? okay, that's a strong statement. >> absolutely. liz: let's go to the democratic side, and i'll stay with chris for a second here. bill clinton, the big bazooka
bill because he's a big gun for hillary, is now coming in and saying negative things about bernie sanders. is that going to work? >> look, i think that the clintons are closing in new hampshire. i do not think that she's going to win new hampshire, but she was down 30 points. if bernie wins by anything less than ten points, it's a loss for bernie. expectations matter, and i don't think he's going to meet the expectations here in new hampshire. liz: oh, that's a strong statement -- go ahead, matt. >> yeah, come on. let's all be honest. bernie sanders fought to a draw in iowa, and bernie sanders is going to win in new hampshire. this is a very bad start for hillary clinton. she is the candidate that most democrats want, but nobody really loves. she's not the candidate of their heart. and we're going to see a bumbling and a stumbling hillary campaign going forward from new hampshire, and as a republican, i'm going to enjoy every second. [laughter] >> i know you will, matt. but i don't think that's the case. i think tomorrow night will be bernie's last good night and, quite frankly, if it's less than
seven points, really less than ten points, it's not a good night at all. >> you're dreaming, chris. liz: i've got to bring up donald trump here, matt. is it going to be his last good night, or is he going to continue to charge forward if somebody like kasich gets some air? >> you know, liz, a win is a win for donald trump. in the end, these states come down to winnings. ted cruz won in iowa, if donald trump wins in new hampshire by a couple of points, it's a win x then we move on to super tuesday. it's all about winning from here on out. liz: well, put it in stone. great to see all of you. while you guys were talking, we took back even more of the losses, right now the dow is down 220 points, we had been down 401. great to see you both, matt and chris. be sure to tune into fox business' coverage because especially when it comes to business and your pocketbook and the issues that matter to you most, we've got it covered. 7:55 p.m. eastern, neil cavuto leads our coverage, and he will stay up with team fox business
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liz: breaking news, the story is going from a major rout to an attempt at a comeback for all of the major indices, but the dow jones industrials still have a loss on the screen of 210 pointings, although the comeback is significant. we had been down 401. with 21 minutes left to go in the trade, technology stocks liz, the f.a.n.g. stocks, the fa
the tech bubble has burst. so if it hasn't burst, has it at least leaked a lot of air? these are the stocks that really carried the rest of the markets along on their back last year. they were the darlings. this year, ah, people perhaps taking their profits and running for the hims. perhaps the valuations are coming down to perhaps where some would say the but certainly, they weighed heavily, and on the nasdaq it's been a tough go in 2016, liz. liz: oh, isn't that the truth? 20 minutes to go before the closing bell rings. we're bringing in some very smart names all up and down wall street. i want to go to john lonski, we just spoke to bill gross over at janus capital. when i was talking to bankers in davos, they said no way can the fed cut rates. they took so long to implement
one tiny quarter of a percent hike in december, he's the first one i've heard to now say, at least of that stature, the fed may have to cut that rate back. do you agree? >> they may have to take it back. let's not forget ever since we've had that rate hike back on december 15th, the ten-year treasury yield has dropped from 2.3%, now it's under 1.75%, so the credit market is telling the fed to, perhaps, take it back. liz: well, let's listen to exactly how he phrased that. here's bill gross from about 15 minutes ago. >> the fed, for instance, in charge of the treasury market basically has to stay where it is or maybe even lower interest rates or have a renewed quantitative easing program at some point. liz: what do you think, john? another quantitative easing program? that would be conceding that none of what they've done is now working at all. >> it's totally nuts that the
world economy is going no place, it's dragging the u.s. economy lower. a year ago the expectation was that in 2016 u.s. real gdp would be growing by nearly 3%. i had a sneak peek at the consensus, the latest consensus view for 2016 growth. it's down to about 2%. that's quite a drop, and there's no reason in the world why it might not go lower given the fact we have so much financial market volatility, weak equities, ballooning crept spreads. this points towards more cautious business spending not only on capital goods, but also on staff. liz: okay. for those of you on your trading floors who had a bet going or a pool going on where the dow might end, i bet a lot of you are wrong. the dow is down just 192, we had been lower by more than 400 points. stay there, john. i want to bring in james by january coe.
can't discount the oil effect today. we did have oil close in the regular session below $30 a barrel, it has climbed back up in the after-market, but why should we care? is it that much a barometer of the actual psychology of a healthier demand market when oil falls, it scares people? >> yeah, no. oil is the issue. there's actually three issues as you talked with john, interest rates is one of them, and don't discount the possibility of negative interest rates being a real stress on the banking system. china's the oarl only one -- china is the other one. oil at $30, not only can't oil companies make money, they can't pay back their loans, and the banks don't have much of a residual value on those lopes. $30, oil is a credit problem for the financial system, and that's why it matters so much. we've got to get oil back to about $45 before it stops being a credit problem so, yes, the markets are going to follow oil, as they should, and the bank stocks are going to be the ones that are going to feel it the
most as they have been because nobody's making money at 30, and everybody's got big losses at 30 in terms of financialings. liz: right. they have extended a lot of loans to the fracking world, to the shale world. let me just point out chesapeake, ticker symbol chk. can we get that up? chesapeake at the lows of the session today, folks, was falling 50%. why? it's more than just this individual name. this stock, the lowest since 1999 on a report, it is a report, that they have hired restructuring lawyers. is this, james, part of that capitulation people have been waiting for where you start to see major bankruptcies, major, major mergers beyond what we've seen so far? >> i would hope so because chesapeake came out today and said they are not contemplating a bankruptcy. and as much as i hate to say it, they're going to have to go into bankruptcy, and others are going to have to go boo bankruptcy as well too. -- into bankruptcy as well too. maybe they go straight to liquidation, because nobody's
going to buy their assets at $30 a barrel because nobody can make money at $30 a barrel. unless or until we start to see production come offline for good, price is going to stay low, the market's going to stay under pressure. liz: all right. we now have just heard that the energy sector just turned slightly green. maybe that's because the two names that have been green most of the session, chevron and exxon mobile, have actually been holding up the sector. but from the economist and the research guy to perhaps the equity guy who might be a little more positive on a very tough day here, let's get to chris corridor row, chief investment officer. dow is down 160 points, we've got a comeback here. would you venture to guess that people who are in the know looked at this and said now it's cheap enough, i'm coming in to buy some names? >> liz, that's exactly what happened. we were down by that much, there are good bargains to be found. and if you're a long-term, patient investor, now's a good time to collect on those bargains.
liz: what do you see as a bargain? >> i see apple as a huge bargain. one of the big selloffs of the day were the facebooks, the amazons, the netflix and google, but apple actually up on the day, and and i think the reason is the valuations are so reasonable on apple. you know, to get a marquee brand like apple selling at ten times earnings, that's just a wonderful bargain, and that's something you should be adding to your portfolio. liz: okay. because people are looking at this and saying i'm going straight to treasuries. i'd rather get a measly 1.75% yield on the ten-year -- >> yeah, but, liz, i'd rather get 2.2 on apple. apple's yield is over 2%, right? iphone sales perhaps are slowing, but they're not going negative, it's not going off a cliff. you're still making good money. apple's still earning a very healthy profit. liz: and the brilliant people who created the iphone which created so much shareholder value are still there and creating things.
we guarantee you that. but to john lonski, looking at the data that we're getting this week, really i would say that it's retail sales we're waiting for on friday. what are you expecting here going boo a long weekend? if it's a bad number, people are not going to want to go boo this market long. >> you know, on retail sales we need gape of at least one-half of 1% for the month. unfortunately, its increase will probably be no greater than two-tenths of a percent, three-tenths of a percent. last year, believe it or not, was a horrible year for resales. grew by only 2.1% for the year despite the supposed spur of lower gasoline prices. big problem we have in corporate america is a lack of revenue growth. my goodness, even if i take out all the lousy energy companies, i'm looking at for the s&p 500 sales growth of less than one-half of 1% for the fourth quarter. that's abysmal, and that warns us that companies are going to
be tightening their belts. not good news for hiring activity. liz: oh, my gosh. doreen, look, i just grabbed doreen. she was walking by. look at what's happening here. it's quite the comeback. now we're down 131 points. >> well, i think, i mean, the volatility that we've had, this is kind of par for the course. people are bottom fishing, looking for value, but you have to notice how this market's been going down. we've seen tremendous amount of volume, much more than on the way up. i think that has something to say about the tone to which the market is taking. we've seen huge moves down, 30, 40, 50% moves, in fact, that's unusual. this is not a market to just come down kind of evenly, this is a market that's come down in huge gaps. liz: credit suisse and deutsche bank, two european banks which today trade at worse than what we saw in 2009. >> that's right. liz: what does that mean for young pups or baby puppy monkeys, mountain dew puppy i monkeys back then? [laughter] that was a terrible time.
it was the low of the financial crisis, and now we're back there for those two names? >> we're back there in a time where it's not optimistic that we're going to be going forward in an uptrend. now we're down there for reasons that are not so good. obviously, it wasn't good the last time, but we were happy that we would be going up from that point. i don't think people feel that way. liz: bill gross just told us, and john lonski agrees, he does not see how the fed can raise interest rates the rest of the year. >> well, i don't think they will. i think it's a zero chance they're going to raise in march at all. whether they're going to go backwards aren't, that's a matter of discussion, but i don't think anybody on the street thinks they're going to raise rates. liz: i keep hearing people say it's only february, we've got spring, summer, fall, and we all may look like we're having panic attacks, you know, in retrospect, and it would have been a great buying opportunity. in your heart to do you feel that or are you saying, liz, not now? >> i'm nervous. we're pretty late into the economic recovery.
this isn't the situation we had back with the problems in the eurozone. greece is a much smaller economy than china. we could still hit a situation where the chinese currency begins to depreciate, fall sharply against the u.s. dollar. that would destabilize the u.s. economy. put more downward pressure on the prices of internationally-traded goods and services. the only way where this pessimism might be proven wrong is if we see an unexpectedly strong recovery by corporate revenues, and to get on that path, we have of to have some very big, positive surprises from reports such as friday's retail sales number. liz: ten minutes. ten minutes to go before the closing bell ringings. dow is down 173, lows of the session down 401. much of that was the financialings. gerri willis has been picking through the real story of what caused that rout in financials, many of them touching 52-week
lows. >> reporter: that's right, liz. making some very good points there. financial sector down 3% today. i want to show you some of the names that have done the worst. you look at bank of america there, despite a rebound, still down. citigroup, goldman sachs, jpmorgan chase. as the day wore on, the worst performers were morgan stanley, bank of america, co-america had a bad day, and the difference was the exposure to energy. energy has been a pariah in this market, as you know. but now all financials hit by this idea that, hey, we may get no more interest rates this year. it may be one and done, or as lonski said, they may have to take the single rate hike back. that is hurting these stocks. as you know, as bill gross the bond king said, ruing rates actually help -- rising rates actually help banks, they help the margins. it really improves their bottom line, and that's to what those banks were thinking they were going to get.
maybe not. that's what we're seeing now. another worry for these banks in the background, global recession, global problems with the economy. how bad is this going to get? with china in the tank, europe not doing well, can the u.s. economy continue to do very well here? what else do we have in the tank, what can we do? those are the questions being asked today. i gotta tell ya, at points today these banks looking very bad, indeed. you see the selloff in co-america there. we'll be following them. liz, back to you. liz: okay. what you just said has jim bianco saying, see, what i said. [laughter] she makes that point. the exposure, it's a double-headed hammer here for these financialings. number one, too much exposure to the oil patch and, number two, they don't do well if interest rates aren't higher. >> that's right. and as far as interest rates go, let's keep in mind what japan did last week. they cut to negative interest rate. i know you've got to get your
head around that, you have to pay the bank on negative interest rate. stan fisher, the vice chairman, has brought up the idea that they would entertain negative interest rates in the u.s. that would kill the bankings. that would take their net interest margin and collapse it down, and they would be in a very difficult position should we see negative interest rates. that's a specter happening over the bankings -- hanging over the banks too. and it started right after stan fisher floated that idea. now, janet yellen speaks this week in congress. maybe she'll say something to dissuade us, but she's got to kind of tell us everything's okay, but we also notice that the markets are volatile, so she's kind of got to say black and white at the same time. good luck to her. liz: seven minutes before the closing bell ringings. anthony scaramucci is on the phone. anthony, about a week and a half ago on a similarly-ugly day, not as bad, you said you've got to just take a breath, stay out and watch and see what happens. are you still in that stand on
the sidelines mode, or are you looking at certain opportunities here? >> we're on the sidelines. i just want to add a couple of things, i've been watching this great show for the last hour. basel iii, dodd-frank and the volcker rule taking thely quid fit -- liquidity out of the market which is why it's bungee jumping. we do track 1200 hedge funds. some of the long/short hedge fund managers that had cut their exposure in january got super long at the beginning of this week, and they're cutting that exposure today. and we're watching that happen. we've been watching that unwind today. so it's just adding to thely liquidity problem, plus the fact that there's a lot of uncertainty on the macroeconomic policy -- liz: and by the way, i don't know if you heard bill gross, i said would you be shorting china here, he said i certainly wouldn't be investing in china.
so even somebody like him who's a known risk taker when he sees a real opportunity is saying stay with plain vanilla, and he felt treasuries were a better place at the moment, you know? chris cordero disagrees. i kind of see both sides here, anthony. truly, at 1.75% for a treasury yield versus two plus percent for apple, which would you choose? >> we are short china through kyle bass and through john burbank at passport. and so we do see that worsening, and that is also going to affect the banks. the yield curve is as flat as it's been since 2008. there's no way the banks are going to make money in that environment. i don't care what the fed does, liz. and is so this is a period of uncertainty after having six-plus years of very buoyant markets, very low volatility. we're in a period of uncertainty, and all of us on wall street know that the
10,000-year flood, liz, happens every five years on wall street. [laughter] this is a good time to be in the bunker. liz: i mentioned chris, he's still there, i believe. chris, you like ford. i found it very interesting the one thing in the aggregate that i noticed about all of the super bowl commercials is that the auto industry was back in a big way. the prius bank robbery commercial, you had, i believe, buick had a great commercial too. i remember the year after the financial crisis there were no auto industry commercials. does this change anything? because a lot of people have auto loans at the moment. >> well, liz, you've got to look at autos, and there's a couple of positives here if you take -- [inaudible] the lower price of gasoline means that trucks and suv sales are catching on fire. what the u.s. makes well is we make big vehicles well. and ford is probably the best at it. so you've got to like them especially with their valuation.
talk about dividend yield, it's 5%. the average consumer because of low energy prices has a lot of cash in their wallets. they're paying down their credit card bills. so there are positive signs to what's going on in the markets, there are positive attributes to low energy prices, and we need to pay attention to that as long-term investors. liz: i need to bring this up, and it may seem wonky, but i know that john lonski will nod his head and say, yeah, that's right. two a.m., coming up at two a.m., germany will be releasing its trade balance report. and if germany doesn't look good on this one, that will continue this european rout which, by the way, is what triggered what >> right. yeah. european markets off by at least 2 1/2% to 3% today. they got beaten down. last place we have export growth is eurozone. if we see any signs exports are beginning to weaken significantly in europe, watch
out. we should mention in the united states in the month of december, i believe, exports were down more than 7% annually. we haven't seen exports in the u.s. so deeply, during year to year in economic recovery. going back at least 50 years. liz: jim, i thought we skirted it. i thought we would skirt the 15 handle so i wouldn't have to show the hat, dow 15,000. we're just at it right now, 15,001. do we close below 15,000. is that interesting number or something that sends a signal. >> i would prefer we close down below 16,000. i'm disappointed with the action today. last two months, it has been down big middle of the day. rallies back. hop that was it. down again. i would rather see the market close down 600 points.
let's have good old-fashioned capitulation. let's get this over with. we can make a bottom. rally back sets us up for further declines later into this week and next week. maybe we get capitulation. liz: you're calling it. great to have all of you, jim, chris, john. the anthony scaramucci, entire team of traders on floor of new york stock exchange. ducking and getting a near miss. we're down 189 points. gold up $33. its is a fearful day on wall street. i will send it to melissa and connell. >> thank you, liz. it has been a wild day. a wild ride for stocks. call it a comeback way things closings up last hour. dow cutting big time into losses as we move into the close.
melissa: we'll fake you live to new hampshire. for candidates are neck-and-neck going into the event. connell: [closing bell rings] closing bell rings on wall street. earlier today we were down more than 400 points. we closed down 175ish. bigger declines percentage wise coming when the nasdaq composite. still under a 2% decline when all said and done at end of the day. gold up by almost 3%. melissa: the dow dropping almost 400 points at low earlier. 21 out of 30 dow stocks remain in the red. ashley webster watching action from the new york stock exchange. ashley, what is driving today's selloff? >> you know this is really interesting. melissa and connell, a lot of traders are saying what exactly is going on?