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tv   Closing Bell  CNBC  January 24, 2014 3:00pm-5:01pm EST

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outsized losses for the small guys. russell is falling a whole lot more percentagewise than the dow which is down 250 points. >> look on the bright side you can't go up every day or every week. >> absolutely you can't. and we're still not that for from record highs. still, thanks for watching "street signs." stay safe and warm. >> take care. and welcome to "the closing bell" where investors are gearing up for the final hour of trade in what bill has been one of the worst weeks for stocks in quite a while. >> this is what a sell-off feels like. i'm bill griffeth. it feels like your money and investments are under attack. really they are, and it's a three-pronged offensive. weak guidance forward guidance has been a problem. big trouble in the emerging markets, which we will talk about. and continued concerns about china's growth rate which is so
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important for every company that exports to that country. if they slow down exports to that country will slow down. that's why it's so important right now. >> and underlying a lot of this is this debate about liquidity versus fundamentals. here is how we stand in the markets. the dow is near session lows off 256 points at this juncture. i believe the lows today were 262. >> and we're heading back to that right now. look at that. >> decisively below 16,000. speaking of at least round numbers, the s&p 500, 1797. so we are below 1800 having given up about 31 points today or 1.7%. >> we cannot emphasize too much that 1800 number what that means to traders. it's very important. they're watching that very carefully on the close today. >> and finally a look at the nasdaq which interestingly enough is the laggard today. despite juniper doing a little better. we have the composite down 71 points. >> let's talk about this sell-off and put it in perspective with our guests
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today. we've got quincy crosby from prudential financial, david sourby from loom missales and company. kyle harrington. peter boockvar from lindsey group, and warren myers from illustro trading. warren, give us the play by play, the perspective from the floor. what's going on? >> i'll tell you, you know, the one thing i will say up front is there is no sense of real panic, so i don't want people out there to say that the world is coming to an end. you know i think so many people have been expecting a sell-off for so long that once we had a couple days in a row of a down market i think this has been kind of feeding on itself and i think that's really all you really have seen on the floor. yes, it's an accumulation of a few events. i think the surprise events were the emerging markets and china a bigger impact than the earnings in the last couple days but i think those three combined are what's driving the market down but it's in an orderly fashion.
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>> quincy let's talk about china. is this what is ailing the market more broadly? is it because of that data? >> i think it had more to do with the worries over the credit markets in china. the shadow banking system has been something that the chinese authorities are trying to wean investors off of those high returns. they've had a problem with a couple of the funds and also there is worry that the chinese authorities will not necessarily go in and bail out every single product or lender who is using the shadow banking system and that's going to cause a lot of come motion commotion in markets. the fact of the matter is i think that is what scared the markets more than the slowdown. we know that china is slowing down by design. >> peter boockvar, we're going to talk more about this later, but let me ask you your view of the fed. all the easy money the last few years has helped to fuel the
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rally we've seen. now we know they're going to start pulling back beginning this month. do you think when they meet next week that this sell-off might give them pause in that tapering as we call it? >> well i think the tapering is what's causing these problems or at least is revealing them. so i think if they did stop that would prove to the world that they're completely trapped in a policy that is not working. so they are going to taper, but we've seen this movie a few times. it happened after qe1. it happened after qe2. it happened last summer when they hinted at ending qe and this is happening again. so investors shouldn't be surprised. >> but peter, isn't the point that that indicates not that what the fed is doing doesn't work but that it does. in other words in order to keep markets functioning the way they are at these levels it requires them to continue having sort of an easier stance than what
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they're trying to do now? >> it's an artificial edifice. it's a building that's made on sand. once they stop, with he see what happens. we roll over again. this is not a firm foundation for an economy and markets. the fed has brainwashed investors to think that investing is a risk-free thing when they're doing qe but once they step away people realize that, hey, wow, buying risky assets is a risky venture. >> david, what do you sense is going on right now in the markets and what are you doing about it? are you putting money to work or are you standing back and letting this thing settle out? >> bill if we get another -- if i have cash on the sidelines and it's minimal at best you could expect another 3% to 5% quite easily on the pullback. i would want to put that to work because the statistical empirical evidence strongly suggests even after a great year like 2013 where stocks handily beat bonds, stocks do surprisingly well in the next
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calendar year like 2014, especially if we don't get a recession. valuation fundamentals are still fine. earnings and revenues so far for what i have seen for 20% of the companies that have reported in the s&p, they have done well. but here we are, we're painfully aware of the january barometer as january goes so goes the market. this is nothing different than fumbling the kickoff in a super bowl, but you have a long way to go between now and december for this calendar year so i would be putting money to work yes. and i do worry about the fed, that they are falsifying the economy, but i think that that will not be a major issue. >> peter, just to go back to this issue again here if the market is pushing central banks to provide more liquidity and maybe saying look it's not just the fed, it's the fact that banks in europe are repaying some of their money and the balance sheet there is shrinking, the uk has surprised
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to the upside the bank of japan. how important is it that someone steps up to the tage here?ble here? >> well, we're seeing that in other central banks. japan is obviously increasing theirs. that potentially is a factor in global markets, but it just proves again the dependency and the addiction that central banks have created with markets and the economy, and that the second they step away everybody cries like a baby. and the question that was broached earlier is does it impact what the fed does next week? we're going to -- >> it shouldn't. >> -- over the next couple meetings whether the fed is going to be the parent that says to the kid, no more candy or they're going to listen to the kid that's crying the kid being the market and saying okay here is one more piece. >> kyle harrington it's clear the sentiment in this market changed on january 1st. we had a great year in 2013 and it's been a very sloppy market to begin 2014. what do you think is going on right now in your view?
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>> well i mean this should come as no surprise bill and kelly. to me it's not. this marketplace in my mind was not built on firm ground in 2013 when it ran up to the tune of 30%, and this week is the worst week since november of 2011 and i think that, you know what's amazing to me is the interconnectivity of the marketplace. so you saw china's manufacturing data be disappointing. you now saw are ajengentina not stand by their currency in the peso and earnings reports coming in so-so and off marketplace in the united states where there's 20 names that are in the green today in the s&p 500. so -- and the fed concerns coming up in the near term is and should be of real concern. >> all right. let's bring kenny in. he just stepped in from off the floor. what do you sense is going to happen between now and the close? what are you guying thinking about here? >> my sense is that they want to
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close it on the lows here, although it's a struggle because they're -- my guess is they're going to try to close it right at 1800 you know plus or minus, but if it closes at 1800 psychologically it looks different. >> what if they don't close above 1800. >> either way it's setting itself up for further weakness next week. you can get a sense today, although it's certainly not panicky, people are reassessing the rick out there. what is the fed going to say next week? they've already floated the idea of wanting to increase the taper. i don't think that's happening but yet no one really knows that. so people are being a little more cautious taking money off the table in case you get a spike down next week they want to be able to take advantage of it. >> do you agree, warren? >> i do. i mean i was looking at the market on close and balances early, and they were pretty neutral. i don't think you're going to get too much of a push either way from that. i think 1800 ong the s&p is a key number psychological. at the end of the day i think the damage has been done for the
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day and probably setting the tone as kenny just said for the beginning of next week. i do want to stress everything is calm and orderly here and if you keep your head and maybe -- >> that's either a good for bad thing depending how you look at a sell-off. thank you, guys. >> thank you. >> have a good weekend. >> thanks. >> got about 50 minutes as we head into the close and match markets sitting near their lows of the day. one of the worst days we've had for the major indexes. the dow off 245 points at this hour. let's talk about this will it sell-off on wall street force incoming fed chair janet yellin to halt the tapering for a little while? in fact could it make her even increase the stimulus untaper so to speak? we'll talk about that. how much blame should china's weakening economy get for this sea of red? it's an important issue. we'll talk about it next. keep it right here. you're watching cnbc, first in business worldwide.
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welcome back. another big sell-off on wall street today. the dow is now down for a fourth straight session and has declined nearly 3% this week alone. dom chu is sifting through the charn carnage back at hq. >> kansas city southern is the worst performer plummeting after
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posting weaker than expected fourth quarter profits after weakness in its energy business including lower coal shipments. a tough day for google. the gmail service was experiences outages during the course of the day, and then gaming stocks being hit hard again, after jpmorgan report yesterday that macao gaming growth was possibly slowing. the transports are experiencing their worst day in nearly nine months. airlines are leading the way lower, jetblue, delta, united continental, american airlines, all you can see to the downside. on the flip side though there's proktor & gamble. it's moving higher after second quarter profits beat forecasts by a penny. they said they expect to see second earnings growth in the second half of the coming fiscal year. slowing economic growth this china part of the three-prong
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attack on the stock market. >> we have john rutledge, chief investment strategist who has traveled extensively through china. it started with this manufacturing report out of china the other day and the market started to sell off at that point. is that really what this has been about just the fears about the growth rate in china? >> well no. i think it started at the beginning of the year when we saw a lot of the emerging market currencies decline due to the fact that the fed started to taper. what we had was two-pronged approach where we had the fed withdrawing stimulus as well as the fact that china pmi slowed. if you look at the top trading partners of argentina and some of the countries that are having the biggest currency fights on their hands right now, the top three is basically china, the
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united states, japan or germany depending on which emerging market you're looking at. so that's a double-pronged assault on those emerging markets. we saw a lot of vix buying. i don't think people are selling stocks. what they're doing is hedging in the vix. the vix went up to 17. as well as selling the futures in the e minis. we use that 1835 series a pivot pre-martin luther king day. the yen strengthened and the correlation there was very high. we think right now this is playing out just as expected. >> john rutledge explain to people what this is really all about then. what has been the catalyst for the sell-off? >> well people have an itchy trigger finger at the moment and to paraphrase yogi berra, investors want to be pessimistic, nobody is going to stop them. so i think we've had -- this is mainly sentiment driven but to echo what my colleague is saying there's a huge carry trade element to this. the fed and other central banks
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have been forcing developed country interest rates down to zero for a long time which means investors borrowed money in these currencies to invest in the emerging markets to capture the spread. as the fed pulls out of tapering and people start figuring out there's still a lot of reserves out there, the u.s. rates are going to go up. europe's growing, japan is growing now, which means people are shutting down these carry trade positions. so you see big drops in emerging stock markets and in currencies and also in the commodities that depend on them. i think the reduction in the china manufacturing report was really minuscule actually. actually the level of manufacturing activity in the report is still growing. it's the outlook that's now a little bit below 50. it's mainly a financial issue, not a fundamental growth issue. >> so we're unwinding essentially the gains we saw in the markets because of the easy money policies of the fed.
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john, how much lower do you think we go especially if we close below 1800 on the s&p today? >> well i think right now we're in the -- a 1% move right now is a lot different than it was at 1,000. we're looking at 1% moves we're moving the market 200 points and 20 spot points. so we don't think that the downside is too critical. if we look at 10%, that's 1662. so what i wanted to say was if we look at the mexican crisis the russian ruble crisis every one of those in the '90s was a buying opportunity. so no matter if the correction is 3% 5% 6%, all those corrections were bought heavily because everything fundamentally in the united states is fine. so if we close our eyes and say -- >> you didn't have fed intervention in those previous currency crises. >> you did after the crisis happened. >> that's not true.
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we had fed intervention in the fact they lowered rates and started to raise rates. >> but to the degree we're having right now. >> other thing i want to say is the fact that we're so worried right now and if we look back in time, those again were buying opportunities. if we close our eyes and say that growth in the united states is 3% and the fed is still adding $65 billion -- >> we hear you. sir, we hear you. >> bottom line bill i think that this is going to spook the fed out of more tapering this time around. >> and there you go. the same thing happened to greenspan in '98. >> go ahead, john rutledge. >> the same thing happened to greenspan -- two johns sorry. >> the fed does not announce more papetapering and there's a change in the character of growth where the developing countries are growing and the emerging markets are slacking off a little bit. developing countries don't buy commodities. so this is also weak for commodity prices but i suspect
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next week finally i get to buy some stocks again unless remember prices today are still 40% higher than they were two years ago. >> but just to be clear, john rutledge rutledge, because a lot of people including john are saying this is a buying opportunity, but in each of those prior cases when for example a rebound in the yen, an unwind of the carry trade, caused a crisis you didn't want exposure until after the crisis hit. how do you know whether we're going to head down a similar path or not? are you that confident that next week already the sands will have shifted? >> i think that there -- by the time the fed finishing taper, there will be $3 trillion of undeployed excess reserves in the banks. those reserves pushing into the asset markets is the fundamental for us lifting dollar asset prices. those are not going to go away. in fact, that number will be bigger six months from now than it is today. >> all right. got to go, guys. thank you both. have a good weekend. okay. we have agreement there. we'll stop right at that point.
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see you later. 40 minutes left in the trading session, and we're starting to set new lows for this day. the dow now down 266 points 267, and the s&p continues to fall below what is considered a critical level of 1800. we're at 1795 right now. >> that's right. bonds are rallying big time today as well as stocks keep selling off. it makes sense but will this correlation last and which is the better place for your money right now? both sides of that debate are coming up next. also we want to know how you think investors should be playing this market right now. tweet us your thoughts on that. we'll reveal your best responses later on "the closing bell." [ male announcer ] the new new york is open. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to
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welcome back. want to send it straight over to dominic chu for a quick market flash. >> the dow transports worth another look because they are now down session lows 4% on the day. this is the worst day that they've had, the dow transports since september of 2011 down 4%. big names, kansas city southern, united continental and the airlines delta air lines, kirby. a lot of big transport names leading to the downside. worth noting as we head towards the close, the real weakness in those transportation stocks. back over to you guys. >> i think it also bears repeating that natural gas prices are up what 9% 10% today. >> absolutely. >> nat gas up 24% just this year. a lot of the cold weather, of course, but we've got demand -- >> it's going to be a higher
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cost for consumers and producers that benefit from generally much lower natural gas prices. >> that's it up 10.3%, almost 10.4% just today. while most predicted this would be a tough year for bonds, turns out it was too soon to tell. just take a look at the chart. the muni bond etf, exchange traded fund, other bonds, they've outperformed the stock market, and for a while both stocks and bonds were a good bet. now they're sort of going in opposite directions which is more historically normal. so what's the better investment in 2014? stocks or bonds? >> let's ask john stolfus and michael gied. both here as the markets are selling off so sharply today. just got to ask you, john, do you stick with equities here? >> i think you absolutely stick with equities. this is part and parcel for the first quarter of the year. we usually have some kind of a stumble. you establish an opening trend. everybody thinks that's the way
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it's going and then you have a little drama. we just finished a year up 30%. you have china heading into the lunar holiday season that's traditional season. everybody always thinks a hard landing is around the corner when that stops. you have bonds in the process of facing normalization of interest rates. >> you think that's intact? >> i think it's intact and global growth is on the way. >> this normalization growth has to be countered with addressing inflation expectations. look, emerging markets are a symptom. the real core of the issue is deflation. make no mistake about it that's why we're not seeing yields rise. that's why we're seeing tips starting to show weakness against nominal bonds. that's in general i think could you see a rocky period ahead. >> for? >> i think for equities. you have this massive disconnect between what u.s. stocks think and -- >> but why now? you have been talking about
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deflationary problems for the last year. the fed is concerned about the lack of an inflation expectation in this economy, but yet even as that discussion was going on in the past year stocks were up 30% as john was pointing out. so why the sell-off now? >> i think the market is starting to realize the demand pull wealth story is nonsense. they badly started underperforming after the payroll report. the market is replacing the federal reserve. this is a very important development that's happening here. unless you see a real pickup in inflation expectations i don't see how anything is going to hold its gains from last year. last year was an outlier. this is a classic risk off period. >> but the low point for inflation expectations if you want to tell that story was in the spring of last year and if you look at what's happened so far in 2014, they haven't budged. in other words, there's not the same sense of fear we had last time around and i wonder if that doesn't put the fed in a corner
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here as the better -- relatively better unemployment picture means there could be a little more wage and price pressure than we might have seen in the last couple years. >> if that were the case you would see it reflected in consumer stocks. you're talking about wage inflation. those consumer stocks which have been stellar leaders are now looking like they're turning around. it has nothing to do with turkey or china. it's a u.s.-specific issue. credit spreads are widening. that's not what the fed wants to say. >> that said though this is a near-term transitionary period. i mean we'll agree with the deflation story. that's one of the reasons why central banks around the world have been operating in concerted and parallel effort for a long time, but related to the consumer, for example, the consumer had a cold spell, there was a loss of confidence. you had obamacare. you had the increase in the payroll tax from last january. it was amazing how well the consumer has done and our expectations would be that the consumer will be back once they regain some confidence as we move forward in the year.
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>> so you're willing to sort of make it through whatever this pullback is going to turn out to be, you would be buying as we're going down here? >> i think one of the biggest risks is that you miss the dip and i think we've got a dip in here that is likely a buying opportunity. i stick with cyclicals. i prefer to get paid while i wait with cyclical dividend payers, but on the other hand you know when i look at bonds, i think perhaps municipals look good because it's a higher tax society today, but otherwise i'll stick with stocks. >> thank you both for your thoughts on stocks and bonds today. see you guys later. >> and the happy talk hasn't done much to help the market here right now with the dow still off 270 points. that's 1.66%. we're seeing consistent declines across the s&p and the nasdaq. >> we'll talk the fed. this ought to be interesting coming up. will incoming fed chair janet yellin have her hand forced by this ugly stock market making
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her perhaps reverse the stimulus tapering that ben bernanke has begun? we're going to sort of debate that issue coming up. also got to talk earnings. the fears about the guidance has been a big catalyst in this week's sell-off. next week the earnings bonanza does continue. apple is on deck for monday. what will it mean for the direction of the market? we'll talk earnings coming up in just a bit on "the closing bell." humans -- even when we cross our "t's" and dot our "i's," we still run into problems. that's why liberty mutual insurance offers accident forgiveness with our auto policies. if you qualify your rates won't go up due to your first accident. because making mistakes is only human, and so are we. we also offer new car replacement, so if you total your new car we give you the money for a new one. call liberty mutual insurance at... and ask us all about our auto features, like guaranteed repairs, where if you get into an accident
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buckle up. this could be interesting. the markets are having their worst week since may of 2012. could the sell-off cause the fed to rethink tapering the monetary easing? >> gregwith us our own steve liesman and from the bond pits mr. rick santelli. steve, first to you, how likely is it if things are really starting to get ugly out there that the federal reserve changes course? what would it take? >> i think what the fed will do is analyze these events in terms of whether or not they create systemic risk for the financial system in the united states and globally, whether or not we have a potential to impact real aggregate demand. i suspect the answer to both questions would be no. if they were yes i think what
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the fed would do in that case would be to try to do what it's been trying to do over the past several months which wouldis to lean increasingly on greater forward guidance and stay the course on taper. all of that is a long way of saying i think it's going to take an awful lot to get the fed off of its course of reducing by $10 billion a month. >> i think you agree, greg. let's face it you have to expect some market dislocation when the fed changes its strategy. it's the strategy that got us here and when they change course the markets might change course as well right? >> yeah absolutely. bill, we've been talking about this for months now. i think the big mystery is why we didn't have this correction sooner in the face of the winding down of one of the most aggressive monetary stimulus plans in history. i'm totally with steve. i think there are two circumstances under which weak markets would pause the fed's
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hand. number one, if the decline in the market is so severe that it's a systemic crisis in the making like in 1987 or '98 or if it's symptomatic of a worsening outlook. i don't see the fed sees the evidence that the weakness in the evidence is telling us anything broader about what's going on in the economy. >> this is interesting about the timing point that greg brings up, right? because we did see a little bit of a freak out in markets in last june. it was eerily similar to what we're seeing now, vix spiked emerging markets are routed. we were seeing pictures of what happened across the country front and center on wall street -- across the world front and center on wall street. does that means everyone just needs to buckle up or does it mean at some point if it gets bad enough they will be forced to respond? >> my feeling is first of all, let's take one comment you made about the vix. as interesting as options are, if viewers out there have a near death experience my guess is they're going to increase their
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life insurance but it doesn't mean they know what day they're going to xidie. volatility, it doesn't surprise me it's going up. b, when it comes to the federal reserve, it isn't just the federal reserve. it's central banks everywhere and on the forward guidance issue, you might as well put those goalposts on go-cart wheels. they have changed thresholds they've changed -- because in the end it really isn't about those metrics. it's about programs that have outlived the crisis and, see, this is why they weren't a good idea. if we do get near crisis where is their encore performance? see, the issue with central banks is that they always overstay their welcome because it's a bureaucracy, not a profit-driven enterprise from a psychology standpoint. so they want to stay until everything looks perfect. everything never looks perfect, but the problem is if these programs ended a couple years ago and we had this maybe they would have some wiggle room.
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but i still stick with the idea that they have -- the programs can't go on forever, and i think markets are very attuned to that and i think that what's going on in the world isn't only that. i think you do have to look at china. there's a lot of issues here that are all meshing at the same time whether it's rates never coming down many people not trusting the numbers in china. sen pral banks really ought to take a backseat and if they have to get involved i really don't know to the extent they could make a huge difference. >> one thing you might imagine happening is long rates go up because they're not buying as many bonds -- >> see, i have never bought into this. >> well but my point is -- go ahead. >> the only hedge for a stock market that gets in trouble, said it on your show a month ago, the only hedge is treasuries being purchased, and as strange as that may sound, it's no more strange than having record deficits when interest
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rates hit historic lows. >> and, steve, here is what i wonder. if the last time around that we saw some of this volatility back in the summer, that period passed, things looked okay through the end fltof the year, was that all because the japanese story was working and people could use the carry trade and the same thing will happen again or is there a sense in which this time around the story starts to unravel and it forces more of a response? >> i think they're very different and i think what's happening right now, rick was talking about the ten-year yield declining. that engenders a different sort of nonresponse from the federal reserve because what is it that they want after all? they want lower interest rates to help the real economy. and to the extent that those real interest rates have been declining and are lower amid this episode, it will engender less of a response from the federal reserve. what happened back in may was that they had to come off when they saw this huge rise not necessarily only in the ten-year but it was really the rise of the two that made the fed the most concerned.
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the two and below that made the fed the most concerned. i would say it's a different set of circumstances. and i also think it's a different set of circumstances compared for example to 1998. i think the economic situation is fundamentally better underlying it than it was back then. >> very quickly, do you expect the fed to say next wednesday that they're taking $10 billion more off the table in their program? >> i absolutely do bill. i think that the bar to going off this taper is very very high. number one, it just takes a lot of prepping the market to shift this thing. so if they paused or dialed it back this week, it would be a big hassle to dial it back. and number two, we know that fed officials have been saying that they think the marginal benefit of this program has been declining. like steve, i think if they need to act they'll do it on the forward guidance with respect to short-term rates. >> such an interesting situation for yellin to inherit. >> thanks guys. heading towards the close. holding near the lows of the
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session right now. the dow was down 279 at the low. we're down 269 right now. and once again it bears repeating, the s&p is below 1800 which was considered very key support. we'll talk about that coming up. >> and we've got earnings continuing to roll out. a big week next week. that's how stocks roll over lately. the numbers behind the numbers and the impact on this market coming up next. >> after the bell apple earnings come out monday. it was 30 years ago today that the mac was revealed to the world. it didn't just change computing, it created a culture and products that simply revolutionizerevolution revolutionized the world. later, one of the first reporters to chronicle it looks at the mac's 30th anniversary. if you wear a denture, touch it with your tongue. if your denture moves,
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welcome back. another big sell-off on wall street today. earnings reports are seen as one of the culprits. sheila is joining us with what the latest string of reports are really telling us. sheila? >> we have literally been combing through these transcripts reading the so-called earnings tea leaves and the first thing we found, a word we saw a lot of especially when it came to retail disappointment. coach, for example disappointed in its performance. so was best buy, five below, elizabeth arden. investors showing how much they
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didn't like the word and, in fact, all those stocks saw a lot of earnings pain. the number two theme we saw, china. despite all the macroconcerns about china's growth it has been a bright spot for several companies so far. double digit growth in china, even coach had a 25% growth rate in china. american express, general motors, both companies saying they saw a lot of strength in the region. gm opening four plants in china through 2015. finally, the last thing we saw a lot of, you know what i'm going to be talking about now, it is the weather. blizzard, polar vortex whatever you want to call it it has been very, very cold. it has been snowing a lot, and that has impacted plenty of companies. we found more than 40 mentions of the word weather in transcripts so far and really in a wide range of companies. so from a restaurant like bob evans to u.p.s. to a retailer like dollarama. you can probably expect to hear
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a lot more about the weather. i have been outside today and it's freezing. >> yes, it is sheila. the interesting question to what extent it's really weather or it's weather. >> art cashin just stopped by. the market on close orders are definitely heading toward the sell side. about $500 million worth of the stock to the sell side. we're down 276 on the dow. >> we haven't had a 300-point day to the downside since last june but it was only last june at the same time. >> exactly. but to your point, the last time we had that kind of a sell-off was when ben bernanke had sounded the alarm they may be tapering. let's talk about it. sheila is still around with us we have david darst from morgan stanley wealth management senior adviser there. do we pay attention to earnings? do we pay attention to the fed? do we pay attention to china? what is an individual investor to do about that? >> is it time to be selective,
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bill? the earnings beats have been about 75%. you have had 120-some-odd companies out of the 500 have reported so far. the big earnings beats, 88% have beaten in technology. 90% have beaten in health care. both of which are sectors that we are advising people to put money into. materials, 78%. so you want to be very selective here. you want to own companies like schlumberger. you want to own companies like halliburton, pfizer abbott johnson. stick with some of the more defensive names in a time like this. they lagged last year a lot of these big social networking companies and all that took off last year. we've said for weeks, you and i and kelly have said for weeks there was going to be a cloud. shakespeare said sometimes the brightest day hath a cloud, and this is that cloud. we don't think it's a serious earnings cloud. the forecast consensus, 8% for the fourth quarter, 5% for the
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first. so you will have time to buy later. >> okay. >> 5%. >> art cashin just walked by again. the market on close orders now 1.4 billion to sell. the selling is intensifying. we're down almost 300 points and we haven't had a 300 point decline on the dow since last june when the fed was talking about maybe beginning the tapering in september. then they pulled back on that but this is very much a taper concerned market right now. >> just quickly to sheila as we look at the nasdaq sheila and as you dig through the earnings reports, the weak guidance when it falls short is there a consistent theme there as to why? >> you know, a lot of people just say generally that the economy may be getting better but it's not quite there yet. of course, emerging markets has been a theme we've been hearing about. also capital spending. this is going to be huge next week with caterpillar reporting earnings. everyone listening to see how much money are these company actually spending? are they actually putting that money to work out there now?
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>> yeah. caterpillar has been one to watch, having a day where it's off almost 3%. joy global as well. we're seeing those concerns reverberate. sheila, david darst, great to see you both. >> thank you very much. have a great weekend. >> you, too. heading towards the close. 13 minutes left. the dow down 290 points. the s&p continues below 1800. a decline of 36 points. >> we'll watch and see whether we can hold, climb, try to make some ground back as we head into the final moments of trade, but again, it looks like there's a lot of pressure on markets for this hour, and we want your feedback on how you are playing these markets. tweet us @cnbcclosingbell. your thoughts on air at the close of the program and we're back with much more market analysis after a short break.
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eight minutes left in the trading session. the dow is down 1.75%. the s&p below a key support level of 1800. we've been quoting art cashin through all of this. let's bring the man in himself from ubs financial services for his take. you made the case to both kelly and me a little over an hour ago why we could see an ugly close here today. why? >> well ordinarily friday is
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the best day of the week. shorts tend to cover going into a weekend, but this is different because today we're worried about currencies and nations use weekends to adjust their currencies. they usually do it on a sunday when no one around. >> so it triggers a run for cover in the meantime. >> they want to reduce their risk profile going into this for fear that one, two, or four medications may adjust their currency over the weekend. >> we're talking about not specifically but some of the countries that have been a concern this week argentina. you can go back to some of the eastern european countries, maybe some of the asian names last time around that were a worry, art. is it discriminant or not? is there a sense of who or where to look? >> well i think it is -- the difficulty is the possibility of contagion, and you're seeing a couple things. you saw the slowdown in china, the concern about their banking system, and we saw that spread through the copper and other commodity areas. now, today it's interesting. we are certainly getting a slam
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bang sell-off but five stocks in the dow provide about 40% of the sell-off and they are names like caterpillar and boeing and united technologies -- >> the high dollar stocks. >> they're not only the high dollar stocks but this five are a group who do a lot of business with emerging markets. >> overseas exactly. assuming we close below 1800 on the s&p, what does that mean? >> well i think it means that the bulls are going to have to do a lot of work to get things back in order. that's some serious damage. next week will be critical. you have the fed meeting. i lean on the side of at least very active discussion. they're going to take a look at these markets and say should we move further? janet yellin does not like disruption historically so it will be interesting. it will be her maiden voyage so to speak. we'll find out what happens. >> the wise sage himself. thank you, mr. cashin.
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>> mi pleshy pleasure. >> we want to know how you think investors should be playing this market amid the sell-off. look at that sea of red. your tweets and thoughts on the subject. that's all coming up in just a bit on "the closing bell." [ male announcer ] this is the story of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. ...and the little room above the strip mall off roble avenue. ♪ this magic moment ♪ it is the story of where every great idea begins. and of those who believed they had the power to do more. dell is honored to be part of some of the world's great stories. that began much the same way ours did. in a little dorm room -- 2713. ♪ this magic moment ♪ ♪ ♪ ♪ humans -- we are beautifully imperfect creatures, living in an imperfect world. that's why liberty mutual insurance has your back, offering exclusive products
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[ male announcer ] once, there was a man who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ ♪ the shell brought him great fame. ♪ ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade. last couple of minutes on what has been a big down day capping off a big down week for
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the u.s. equities markets. here is the dow today. at the low we were down 292. we've come off that low right now with the industrial average down 276 points or 1.72%, down more than 2% for the week about 2.6%, 2.7%. the s&p is the one traders all watch, and the level they're keeping an eye on is 1800 which many consider very key support. that's what art cashin was talking about, and we're well below that number right now at 1793. a decline of 34 points or 1.9%. and as stocks go lower, volatility goes higher. the fear indicator has skyrocketed not just today but this week. best week in a couple years for the volume lit inatility index or the vix, up 28%. we're back to 1766 bob pisani. >> that vix is in backwardation. that's the cash contract it's
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higher priced than the futures contracts a couple months out in february -- >> looking further out they're expecting less volumeatilityvolatility. >> that's right. in the past this -- when you get these in backwardation, the front month is really high and you get a lot of bounce sometimes in the market. that's a pretty good sign. >> 1800 there are those who feel that's a critical number that they cannot close below. >> and you'll notice when it hits 1800 in the middle of the day, it did drop. the market did take a leg down. so people say technicals don't matter. in this case is very clearly did when it hit that 1800 level, we hit a new leg down. let me say something about the s&p. i know art was saying a lot of damage has been done. the s&p is only 3% off its historic high. i don't think that's great news but people ask me about the fed next week, bottom line is i would hope the fed is not going to stop its tapering program -- >> there's a lot of reason to
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believe they won't change their view. they can't let the markets dictate to them. >> i think it would be a sad commentary if they did. >> you have to believe they would at least talk about it. >> i think they should. art made a good point, today the weakness -- most weak sectors, materials and industrials, those are the ones most impacted by emerging market weakness. >> next week a huge slew of earnings coming out. apple starts the parade on monday and capping off the end of the week you have the jobs number for this month. so big numbers coming out. >> and you will notice that we had a number of companies including proctor & gamble that had excellent numbers. those stocks were trading on the upside. we had eight or nine big companies with very good earnings. >> as we go out, cashin was telling us that the market on close orders were coming into the sell side in a big way and we are seeing that coming in right now as we head toward the close. look at this. now down 307 points. we're heading lower in a big way and the s&p will close below
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1800. what does that mean for next week? we'll keep an eye on that and anticipate big earnings. stay tuned now as we talk about what has been a tough week for the bulls, the second hour of "the closing bell" with kelly evans and company coming up right now. have a good weekend, kelly. thank you, bill. it may not be a pretty weekend for investors. welcome to "the closing bell." i'm kelly he wasevans on this friday. as we hit 4:00 and markets close and we're still going to watch and see how things tally out, but it looks like the dow showing a loss for the day of 310 points. it's now sitting at 15,886 and continuing to be under some pressure as we weigh in those trades going past the close. the s&p 500 off 2% today down 37 points. in fact, closing right on about 1790. the nasdaq shedding 90 points or better than 2% to 4128.
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how significant are all of these levels and the action we've just witnessed in the market today? let's get straight to it with today's panel. joining me are oun sara eisen, robert frank, and seema mody evan newmark and for more on markets, marian bartells. evan umpyou were here a weak ago. did you really expect it to look like this? >> i think i said something. broadly speaking. it could have been worse. i mean it's not the end of the world. investors shouldn't lose sleep over it this weekend, but you know what? earnings have been mixed, and frankly, i think the market is looking for an excuse to sell. the s&p was up 32% last year including dividends. it's not going to be up another 10% in the first month of january. >> the decline for a double digit year just got tougher. >> you have to look at the rate of how things are selling off. you look at some of the extreme moves and investors around the world, whether you're trading
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equities, bonds, whatever are watching these markets. you're seeing record lows for the turkish lir raa, the argentine peso. when you start to see moves like this you start to see spillover to other emerging markets currency. then you start to think of the engines of the global economy and the fast-growing economies there, and if you're not discriminating, you start to worry about growth. >> even for people who aren't necessarily playing in those currencies, supplement companies by default have exposure to a lot of these markets and they're small perhaps relative to the domestic market but an important source of growth and there's a lot of growth companies today that weren't spared from the sell-off. >> there's the multinationals that have exposure to the foreign markets. those are the stocks to watch. in terms of today's movement i'm hearing it's a fundamental and technical story at play. on the fundamental side ongoing worries about the fed, weaker
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data in the u.s. on the technical side you have the s&p and dow breaking key support levels. the nasdaq close to breaking the 50-day moving average. >> mary ann, how ugly does it look to you? >> really when we look at the markets going into 2014, one of the major macro drivers were forecasting was voltatility and we got that here today. all we've been hearing at merrill lynch from clients is when are we going to get that pullback so we can actually buy? well you're in that pullback right now, and we are telling clients to actually buy. >> okay. so you like these levels. you're buying here. robert frank, what are you hearing? >> i always hate to admit evan is right about anything but the one thing you said that i think is so true and so important is that markets are looking for an excuse to sell and that's a complete 180 from last year where markets were looking for any ebsxcuse to go higher. they have to reach into the argentine peso the wealth
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practice ducts in china. they're reaching really far to find something negative -- >> robert seriously, there are some fundamental problems going on. first of all concerns about china's growth with the manufacturing numbers showing a below expansion rate. concerns about its shadow banking system it's financial system massive. that could have implications for the global economy. you have the federal reserve on track to taper or scale back -- >> totally agree. >> that highlights the problems that have been masked by all of this liquidity that's been in place for the last few years -- >> let me answer. your point about liquidity is spot on which is to say last year none of these other things really mattered as much. china, we saw a slowing china last year. we saw slow europe. we saw these issues in emerging markets. but the liquidity was overriding all of that. you take that away suddenly all these little issues matter more. >> he have year we hear the china slowing story.
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>> exactly. >> every year -- >> and it's true. >> it's true but you know what? somehow we got by last year. >> i just got to point out, out of the four bric nations, brazil, russia india, and china, india is down the least. down a half a percent on the year whereas we're seeing major movement in -- >> policy accountability. >> inflation dropping for the first time in five months. stabilization in the rupee. that's something -- >> the last time around it was the rupee that had everyone worried. >> i think what's really important is emerging markets were one of the worst performing asset classes last year and we really haven't gotten capitulation, and i think what's happening right now is going to give us an opportunity to actually get a bottom in our markets but also maybe a buying opportunity in emerging markets as over the coming weeks we actually finally get that capitulation through investors. >> okay. hold that thought, everybody. i want to bring in "fast money" steve grasso just off the floor. steve, as we waited for markets to settle it looks like 318 points off the dow.
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what do you make of it 1234. >> in the middle of the day when we had that touch or that break of the 50-day moving average, to touch on something mary ann spoke about, the last time we touched the 50-day and broked 50-day ever so slightly was december 18th and that was when we first heard -- i should say that was when we first experienced taper, right? so now if you think about it as a point of reference, we closed much higher on that day. today totally different set of circumstances. that's why i think we have to go down and touch that 100 day which is what mary ab saidey ann said there's some support. 1762 in the cash. she referenced the futures but the cash is where we need to go down. i would have liked to see the market close rallying back with guys wanting to cover maybe their shorts -- >> explain that if you could. art cashin talked about this too. the fact if you don't necessarily want to be into a weekend exposed to what could be happening in terms of the currency markets, is that part of the story? is it the sense that maybe there's more bad news ahead?
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>> it could be either/or but the shorts have waited so long to get any type -- to get any type of a seize the day type of event and today is the day. how greedy do you get going into fomc? we know that the fed is looking at emerging markets. we don't know how much that goes into their metrics. we don't know how much that goes into their calculations on what they're going to do but the truth of the matter is why go in blind into next week where anything can happen? and these markets can rally aggressively off the levels we're seeing right now. >> it's interesting because we have the backdrop of the fed meeting within just a couple days. it's not as if they will have weeks to think about this one. it's ben bernanke's last meeting as chairman. yellin takes over feb 1. it suggests they're going to be unlikely to turn on a dime. >> i agree with you. >> but if they do, then you could start to talk about something to turn this market around. >> federal reserve says it's data dependent, not market dependent. so far the data except for the
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last jobs report has been pretty solid. i want to point out one thing and that is the new face of the federal reserve, stanley fisher as number two, if he gets confirmed by the senate, he comes from the bank of israel. he's got an emerging markets international perspective. brainerd was the international person on the treasury. >> i cannot believe people at the fed are going to be jumping up and down and going bananas because argentina is a basket case -- >> they try to clean it up afterwards as you know from what happened in russia and thailand. it's not necessarily about these particular countries. it's when those countries spur enough of a panic or they blow up ltcm or something. >> all i'm going to say is if the fed is starting to freak out over contagion because of argentina, turkey all they're doing is saying to the hedgies and to the currency traders out there, you know what? why don't you attack every currency under the sun because
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then we'll have to give you what you want. not going to happen. >> robert, you know a little bit about some of the emerging markets where we've had panics to some extent crises before. for people who are out there, you see a little bit of the commentary, it feels like the late '90s to me. how relevant do you think that is is given the relatively contained selloff. >> i was in singapore in 1989898 to 2000. on both the boom and the bust it's so much driven by capital and liquidity as opposed to the real reforms and improvements in a country, and the mistake that investors make is to lump all these countries together in a nice little acronym whether it's a bric or a mint or a pig or whatever. and say they're all the same. each country is so different that i think both on the way up and now on the way down that investors just make a mistake by saying all emerging markets which is a misleading phrase are all the same. i think you need more discrimination on the part of investors. >> kelly there was a funny joke
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that b of a's chief market strategist made in his research report this morning that emerging markets are as unpopular as dennis rodman is at the u.n. security council. it goes to show -- >> he loves north korea though. that's a buy. >> mary ann, i wanted to ask you what you think about the bond side of things. we have the ten-year u.s. treasury which has rallied to almost 2.7%. we're coming off the worst week for stock markets since november of 2011. what should investors do here? should they look to bonds? >> no. we're not recommending to actually really aggressively buy fixed income. we can certainly see treasuries act defensively and see yields on the ten-year come down around 7.6% to 7.5%. we think a better way to hedge a portfolio is to buy consumer staples within the portfolio. we're still forecasting that rates will rise throughout 2014. we're forecasting 3% gdp growth and we're getting ten-year rates
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up year 3.75%. if you're really looking to grow your portfolio but have more of a defensive posture, we tell you to go into the staples. >> steve, last word to you as people start to shift their attention into the weekend, into next week. what are we going to be watching? >> i think all eyes are on the fed right now. maybe they're not going to go off course on taper but there was chatter they would increase their pace of taper and i don't think you will see that. that might be greeted with some buy side. but i spoke about it last night on the "fast money" show utilities have been lumped in with em and i think it's been overdone to the sell side on long s.o. so you don't think i'm talking my book. >> thank you for joining us after a rough day down here. stick around and catch more of steve grasso coming up on "fast money" at 5:00 p.m. and there's plenty ahead on this show. much more on wall street's freefall today and where it all goes from here. up next we are going to talk some emerging markets seeing plenty of red arrows of their own. many saying one of the main
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culprits of the sell-off. what is the potential for con contagion contagion? listen up investors, you can't afford to take this weekunderweek weekend off. what you need to watch out for, how to keep your money safe, and we want your feedback on how you're playing these markets. tweet us @cnbcclosingbell. you are watching cnbc, first in business worldwide. tte or au lait? cozy or cool? "meow" or "woof"? everything the way you want it ... until boom, it's bedtime!
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welcome back. the dow losing 300 points plus today. it was the worst week for the index since november of 2011. dominick chu, what a mess. >> stock market volatility is measured by the vicks,x, up 44% this week. the biggest jump since july of 2011. a big move in volatility for stocks. there may be cause for some worry but not everyone is pushing the panic button just yet. we want to put today's level in context. the record high for the s&p 500 is 1851. we hit that back on january 5th. now, that means we're about 3.5% below that record high. for the dow, the record was around 16,588. we hit that back on december 31st. we're about 4.5% away from those
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record highs. now, we're not at record highs in the nasdaq composite but we're down 3% from the multiyear highs we saw on january 22nd. in order for a correction or a 10% fall in stock prices to occur, we'd have to drop another 130 points on the s&p 500. we'd have to drop another 1,000 points on the dow, and we'd have to drop another 310 points on the nasdaq composite, and no one is talking about bear markets just yet. remember, that's a 20% drop. just to put things in perspective, yes a bad two-day drop but we're still not near that correction phase, kelly, as of yet. back over to you. >> and i think we haven't had a real correction dom. thank you, sir. emerging markets are weighing down on stocks here in the u.s. earlier on "squawk box" lloyd blankfein tried to be a voice of reason amid the hysteria. >> when it's one country
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specific, it's like credit. if it's name specific and we're at that part of the world how is this country doing, that country doing it? but at some point it becomes kind of a macro event. >> it's not yet. >> when all these kuntszcountries that are very far apart in the global are close together in investors' minds. somebody said you take a position on the emerging markets and you can't change your mind for, fill in the blank, one year, five year. i'd be long not short. >> on that note with us now, larry mcdonald from new edge u.s. and michelle caruso-cabrera who is live from puerto rico which has issues of its own that it's dealing with at the moment. welcome to you both. larry, first to you, which is the tail and which is the dog. are emerging markets getting hammered because of the u.s. or is the u.s. struggling because of what's happening in emerging markets? >> one of the things we were talking to clients earlier in the week about leading indicators, and you're not going to believe this, but if you track the five-year credit default swaps of hsbc versus
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jpmorgan earlier this week they went wider for first time in a long time. for most of the last five years, jpmorgan has been a much much better credit but in the last couple days hsbc's weakening substantially. that's a really good warning sign. i think it tells you the epicenter of risk in 2007-'08 was the united states? then to europe and now to asia. >> if we can't lump all these emerging markets together are can we is it now approaching the lel of being some kind of macro event? >> i think it's a little different. i would look at china. i have been talking and tweeting about this shadow bank risk for many weeks and the markets laughed it off for a long time but i would say china is very similar to the s & l crisis we had in the '80s. a lot of china's credit
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derivatives or credit risk is not in derivatives, it's not in global products so it is much more isolated than say the problem we had in the united states where these credit derivatives werelinked to banks around the world. >> michelle, you spent a lot of time in these emerging markets that in focus. what are you watching? >> trying to figure out whether or not it's going to turn into a macro event, lloyd blankfein hit it right on the head. when does it become something much more systemic? i don't think we're there yet. i know there's a lot of focus on whether or not this is going to be like the currency crises of the late '90s and there's a lot of similarities but there's one really key difference china, as larry highlights an exception which is the following. a lot more currencies floats now. and so besee the change day over day over day, right? as opposed to waiting for the
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tide to devalue one day and somebody was on the wrong side of the trade and they got really hammered. that actually eases things. i know it's painful to watch, but it actually smooths out the process in a way that we didn't see in the '90s. what's different about china and why people think actually maybe it's not as big a risk as larry says is it's still very much a closed financial system. they can wall it off. they do wall it off. they do control their currency and, remember they're a balance sheet as a country. if they have a financial crisis a banking crisis they have the money to fix it and fast and also the authoritarian power to do so. >> larry, quickly, last point here, if i were a policymaker, if i'm the fed meeting next week for example and i'm worried because what we see today continues, is it a policy response that's going to end it here? how does this play out? >> well you know i don't think they taper with this going on. everybody thinks that it's data dependent. i think that the fed is much much more concentrated around
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systemic global risk and i think this would make them pause. >> michelle, want to weigh in on that? >> look, i think the ferveg looks at what happens in the united states. a lot of people say they take the emerging markets into consideration. i think they think about that zero. what they do think about is whether or not there is feedback that causes some kind of negative gdp effect or economic effect in the united states, and then it impacts them. but they create u.s. monetary policy for the united states. >> all right. larry? >> just in closing, 45% of s&p 500 profits are outside the united states. so they definitely have to look at that risk. >> all right. larry, michelle thank you. try to have a good weekend. speaking the weekend, it is finally here but investors won't get too comfortable. up next a wall street pro explainess this weekend is so crucial. what do you need to watch out for on saturday and sunday and early into next week? you can't take this weekunderend off.
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welcome back. it's been quite a week for markets and this weekend is not the time to take your eyes off the ball. there's a lot to watch for that could extend the selling pressure or perhaps stem it come monday morning. david seeberg joining us. david, what's the first thing you're looking for, what's on the radar? >> i got to tell you, first of all, i look at the market today
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and down as much as we were we're only really 3% off our all-time highs and i think there's a lot of panic in the air for it but the reality is we haven't really pulled back a tru amount tremendous amount. next week we get a lot of big earnings still coming out, very important earnings. are these earnings going to be, you know, strong enough to actually defuse a little bit what's going on in the emerging markets? we'll get an answer to that no question about it. but, again, let's put everything in perspective. down 3% from the all-time highs. i look at it as we're setting up for probably a pretty good buying opportunity at some point. i think this pullback has been a little bit greater than we've seen obviously in the near term but we're setting ourselves up for a very good thing here kelly, mark my words. >> i would say look for a few things a few indicators that you might want to, you know, keep your eyes on over the next week. i don't think you have to spend your whole weekend worry being it. if you want to watch cnbc, watch
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cnbc aboutbut you don't have to worry about it. >> what are you watching? >> look at the ten-year. if the ten-year dips below 2.50% then maybe the contagion thing is a real thing. i would look at indiscriminate selling of stocks. the selling today was not indiscriminalindis krim indiscriminal -- >> but the breadth -- >> a lot of stocks have had unbelievable runs. the thing i can't understand is why a stock like twitter, which is as ridiculous valuation, is only down 1% today. >> it's a -- >> twitter is a safe haven. i would look at specific things. i would look at selling, indiscriminate selling. >> seema what about the earnings? we have caterpillar on monday amazon and google on thursday the same day we hear from the ped. fed. >> don't forget apple on monday. facebook on thursday. it's a big week for technology, and, of course, a lot of these technology companies are
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diversified and they have exposure to emerging markets, so, of course we'll have to see if there are any currency headwinds these companies call out for. >> and the fed. that is the biggie next week. david? >> you also have to look -- i was listening to facebook and yahoo! and google all these names reporting. you have to look at the setup trades into the quarter. facebook, there's been a tremendous amount of derisking in facebook ahead of the quarter. we've seen it on our desk across the board. people have taken money off the table. if their numbers come out okay s this going to twist? are you going to start to see people rush back in and buy this name? probably start to see money fly back in. you know yahoo! has been a crowded long. google has been a crowded long. you know is there a chance that they get displaced a little bit based on that? i think you have to look at how they're set up going into the trade. >> sara is it micro? or is it macro, and is it the u.s. central bank? >> i think you can use some earnings to get a window in what's happening. watch caterpillar.
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what's one of the best ways to find out what's happening in the global economy, especially in china where caterpillar has had trouble recently big industrial play in china, and, of course investors are trying to figure out what is going on with china. watch the interbank lending rates in china as well. it sounds wonky but shibor it's a good way to see how much stress there is. and u.p.s. earnings are out next week and that's a good global barometer of what's happening in the world economy. >> i will contribute the yen, if i may, it's going to be one of the first things under night, it will give you a sense of whether this whole liquidity thing is working. yeah david? >> can i make one point? one thing that's interesting and i actually had a conversation with a couple traders today about this people were talking about where are the buyers on the dip, right? because this is a pretty significant, you know, nominal pullback. if you look at last year toward the tail end of last year, every dip was really bought. that was a lot of traders playing catch-up. it was obvious that, you know, you would see the trend of every pullback you'd start to see the traders come in and buy the dip
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and make money. it was a continued opportunity for them. this year the clock is reset. and i said it before on your program, you're going to have a very different type of investor appetite this year. you got to seek out the winners. you got to find the winners and invest in the winners. the losers will be shut out of the portfolio. people are ultra conscious on what will actually perform well and the dips may be a little deeper. so i don't think the traders are rushing in to buying like they were before. >> look i think when you look at the u.s. market it's really -- the fed is number one, two, and three. i think we're stim a fed-driven market. any inkling as to whether they're going to change the pace of taper is number one. outside the u.s. i just think you can't overemphasize the importance of china right now and the amount of debt that is sort of missing. you don't know where it is. you don't know sort of what's going to happen with the local banks there. and the number of economies outside the u.s. that depend on chinese growth right now, all those commodity markets, are so linked to china. we may not be as much but the
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rest of the world is so dependent dependent. >> i would say this, too. when we're talking about the ten-year, wunt get worried unless it went below 2.5%. by that time isn't the damage done? >> there's no point in you trying to outthink the markets about where they're going to be in two days and how big the -- >> that's our job! >> that's actually not. from my point of view -- i could talk about what i do with my own money and, you know -- >> please. >> generally very bullish, as you know. all of last year i was selling down and it's going to take more than this to get me to start putting more -- new equity to work. >> and that's probably a pretty good summary of the kind of activity we're seeing. david, have a good weekend. the deep freeze on wall street is not cooling off our website one bit. stick around our "hot list" is coming up. allen wastler will tell us what people are clicking on. we'll speak with one of the first tech reporters to cover steve jobs and the introduction of the mac back in 1984 with the
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company reporting earnings monday. we'll talk about apple's past present, and future coming up. i need proof of insurance. that's my geico digital insurance id card - gots all my pertinents on it and such. works for me. turn to the camera. ah, actually i think my eyes might ha... next! digital insurance id cards. just a tap away on the geico app. huh, fifteen minutes could save you fifteen percent or more on car insurance. everybody knows that. well, did you know that when a tree falls in the forest and no one's around, it does make a sound? ohhh...ugh. geico. little help here. if you wear a denture, touch it with your tongue. if your denture moves, it can irritate your gums. try fixodent plus gum care. it helps stop denture movement and prevents gum irritation. fixodent. and forget it.
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[ male announcer ] this is the story of the little room over the pizza place on chestnut street the modest first floor bedroom in tallinn, estonia and the southbound bus barreling down i-95. ♪ this magic moment ♪ it is the story of where every great idea begins. and of those who believed they had the power to do more. dell is honored to be part of some of the world's great stories. that began much the same way ours did. in a little dorm room -- 2713. ♪ this magic moment ♪ ♪ ♪ welcome back. the stock market may be ice
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cold, but the website is heating up and it sounds like it's partly because of that. allen wastler, what are people digging into at this hour? >> you know what? it's still the market. we got slammed today on our market coverage. people just diving into the website. look at this this is our traffic graph for the day. we were burying the needle earlier. we got the spike alert around midday. you can see gobs of traffic coming in. people checking out what the markets is doing, what people are say being it. we decided to throw up a poll and ask our readers what do you think is going on? the long awaited correction, yes or no? look at this. we had over 17,000 voting and that number is still growing right now. look at this split, kelly. yes, 38%, no 33%. and nearly a third saying they're not sure. i love people who take internet polls just to say they don't know but anyway. >> i love that you guys have it up there. you have to keep it going. i'm going to be very curious how the numbers start to change into next week. >> you know what? we will keep it up. we'll keep it up through the whole weekend. now, when people start getting
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crazy about the markets and saying what's going on what's happening? they tend to whatnotant to focus on what wise men say. we had a piece up by jim cramer telling people basically to chill. that thing got gobs of traffic, too. over 30,000 people have taken the dive into that story already. more are still going in. and then finally, if the market wasn't crazy enough, we decided to put up a feature looking at what's happening with natural gas. it costs 5 bucks today. people went into that one, too. not only is your portfolio going cold but you won't have heat either. so it was all about the negative today on the website, i'm sorry to say. >> it was a big spike today. >> these are important issues. allen wastler, thank you, sir, and try to have a good weekend. >> take care. president obama delivering his state of the union address next tuesday. income inequality and the economy are likely focal points. up next, david gregory from
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"meet the press" weighs in. with the dow posting its worst week since november 2011 we want to know how your playing these markets. tweet us @cnbcclosingbell. your thoughts coming up. [ male announcer ] once, there was a man who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ ♪ the shell brought him great fame. ♪ ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade.
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[ male announcer ] meet mary. she loves to shop online with her debit card. and so does bill an identity thief who stole mary's identity, took over her bank accounts and stole her hard earned money. unfortunately, millions of americans just like you learn all it may take is a little misplaced information to wreak havoc on your life. this is identity theft
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2% of the workforce at its sam's club outlets. those are the warehouse bulk buying outlets. walmart to lay off 2,300 sam's club employees or about 2% of the workforce. according to the headlines, sam's club is seeking to cut or reduce the middle management roles there and this is sam's club's biggest layoffs since 2010. so again on a day when the market is down big, more bad news, this time on the jobs front, 2 stshths 3,300 people to be cut at sam's club. >> just want to get some quick thoughts from the panel. >> this is a big story and it's not just sam's club. it is what's going on with sears, jcpenney. it's really -- i mean could you make the case for the secular decline of retailing. you know, which has usually been a huge source of job growth in the united states. amazon winning out is not good for jobs --
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>> amazon employs 75,000 80,000 people. >> walmart is the largest employer in the united states. it's over 2 million people. >> so much of that is automated. there was a guest on from davos this morning talking about the three economies, those are who in financial markets, financial assets, they've done well. people with houses have done pretty well. those who depend on a wage the employment economy let's say, the employment-based economy, that still tough. you see this from the retailers especially, every single day this week we've seen something big. >> howard schultz of starbucks, he called it a turning point. he said it will be a seismic shift and a turning point for retailers. a total shift in the way consumers go out and buy stuff. walmart has had some of its own problems beyond just the whole retail problems. haven't heart muchd much about sam's club. >> the crazy thing is even here in manhattan, the home to robert
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frank's 1% it is -- >> yeah they're mine. >> if you go to upper broadway or a lot of the retail parts of new york -- >> they're packed. >> no. >> yeah, they are. >> that's not my point, quite the contrary. there's a lot of open retail space all over -- >> yes, there is. >> -- new york, which is not what you would expect at this part of the economic cycle. i think it has to do with the decline of stores. >> i don't know. i think you really have to split it up. when you look to luxury stores particularly in manhattan because of the foreign buyers coming to buy stuff here, these places are just mobbed. i think it really is a tale of two retail economies. >> it's also a tale of new york benefiting from that -- >> totally. >> he has to get off fifth avenue. he spends too much time on fifth avenue. >> i will say on this news from walmart, this is just again cost cutting. it shows us companies will continue to cut costs in order to boost their profits. >> absolutely. we're looking at walmart shares off almost 1% after hours but it's been a tough day and tough week for most of these names.
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apple down about $10 today. it was 30 years ago today that the company though made some history. >> in 1984 computing was just leaving the refrigerator gigantic room era. this mcintosh thing -- >> apple celebrating the 30th birthday of the mac today. we'll speak with well-known tech reporter steve levy about steve jobs' legacy and where the tech giant goes from here. don't go anywhere. we'll be right back.
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welcome back. president obama reportedly planning to focus tuesday's state of the union address on income inequality. the stock market sell-off by the way might have narrowed that a bit this week. joining me for more is david gregory who moderates "meet the prets press" sunday morning on nbc. it's great to have you here. >> thanks. >> how much of a focus is income inequality going to be on tuesday? >> i think it's one of his big arguments for the rest of the second term. i think he wants a lot of his legacy to be how to address this. i think he's got to be accountable for how income inequality has become a bigger issue even under his leadership as president and really kind of get into the details of what causes it and what government can do to shrink that gap. it's not just about dealing with
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the poor but it's about shrinking the gap and being a real jobs president, which i think he's struggled to be. as you say, pretty tough afternoon here on wall street is going to be making him think a little bit more about that economic legacy. >> and what's interesting is it kind of brings up this idea that back when we were in the depths of the financial crisis no one was talking about income inequality then. it was all about the stimulus. it was about deflation. it was about the deep recession and how bad it might be. we have evolved to this point having moved away from that to where now we're talking about, well to what extent did the response to that event play into the income inequality today and how much is president obama over time potentially going to be blamed for that? >> well or i will be a little elusive because i don't know, but i know that part of that answer is does he get credit for the upside? >> right. >> i talked to a business leader today who said there's no question that the economy is out
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of the ditch but that we're still underperforming, and i think that's as a political matter what's been weighing down on this president. you know he has not really been locked armed with the business community. i know a lot of people in the business community who, frankly, have given up on this white house, on this administration, still think of them as a much too interested in regulation and less interested in job creation so i think it's the fact that he is still not getting the kind of credit for the economy being out of the ditch is something he's going to deal with. look, i think there's another aspect of this and i'm talking about the politics of this. i think the president who just announced the reopening of his political office is thinking about the democratic party and how he can have a lasting imprint on that party. that party in some ways is moving to the left. there's a more progressive streak an anti-wall street streak and i think it will be a big part of democratic policy. i think he wants to create that lane for a future democratic president he hopes to really make some inroads. >> and, david, given that
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especially in a midterm election year and heading into 2016 how do you expect the gop to frame this issue? >> i think they want to show that they care. i think that that's a big piece of it that they want to have a voice on poverty, on dealing with poverty. again, all of our debates have been what role government should play in dealing with all of this because, again, if you think about what causes income inequality, why is there is much less mobility what are the real causes of this? government -- you know a president can give voice to this and can talk about some of the work that's being done in academic circles as the president has done i'm thinking about "the new yorker" piece, but the republicans want to have a voice. i think the republicans want to get in there, show more empathy, and actually have a road map to say this is what we're for, and these can have positive impacts not just on the economy but on dealing with poverty, dealing with income inequality. i think they want to get into that conversation. >> david on that note, what is coming up on this sunday's show?
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>> well we're talking about a big week for the president obviously next week. we're going to keep our eye on the markets and what next week will mean there as well. but we're also talking about edward snowden and the puzzle of what to do about him. this big spying debate. we made a lot of news on "meet the press" with the chairs of the intelligence committee talking about that. we're going to guess response from senator rand paul of kentucky who will also have some thoughts on the economy and the president's leadership and i guess a big question for me as i think about the state of the union is how much persuasive power does the president have left here in his second term? so it's something we'll be talking about. >> he's got a pen and he's got a phone i think i remember him saying recently as well. thanks, david. you can be sure to catch much more of david gregory on sunday on "meet the press." check your local listing or the time and channel. you can catch the entire state of the union address right here tuesday night 9:00 p.m. eastern on cnbc. now, in 1984 steve jobs told my next guest he wanted to quote, make apple a great $10 billion company.
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he planned to do it with his new computer, the mcintosh. today is the mac's 30th anniversary and apple is a $500 billion company. joining us is a $500 billion company. joining us now is steven levi in 1984 worked for rolling stone, where he reviewed the new mac. it's great to see you, steven. did you ever think we would be here, $5500 billion company if. >> no the other part what steve told me on the eve of the macintosh, he wanted to be a $10 billion company with soul. apple, largely is known for, you know, its style, maybe you can say its soul he exceeded even beyond his own expectations. in the same way google is sometimes mocked for its don't
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be vil slogan how apple stuck to that? >> the products is where the soul resides there. the torch has been passed obviously, steve passed a way a couple of years ago, but tim cook, so far, a good steward, he's sort of milking the product line there, waiting to see he does next. >> i was going to ask, evan here robert 1984 -- >> we were alive back then. >> we were alive. >> at the time did you know what was happening? >> my next-door neighbor had one of the macs. i think he may in fact i'm pretty sure he had one of those. i'm trying to remember whether it was an earlier reincarnation,
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in fact. one thing that you knew the whole icon the mouse, the way you manipulated, was fundamentally different. it's not so different now aday and one of the line that i love from steve's piece, he's quoted the ibmpc is a piece that you respect. the apple mac intosh is a piece you can love. i-pad, ipod, you have taken the machine and made it something that they love and the question now is what can they do next? what machine can transform next that's respect and and lovable? it's got to be tv or something like that. >> or wearable tech. >> you hear the rumor -- well is apple going to do the tv next or the watch next? it's not so important what they
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do next but how they do it. we knew that apple was going to do a tablet what turned out to be crucial was how -- in that case, steve jobs oversold the design of the tablet to make it something surprising and how they executed it. that's what distinguished and from the rest of them. we're rethinking the tv. >> right. >> steven what didn't come true from the artle, i mean you look back at this article, what didn't happen? >> well, what didn't happen the ma macintosh wasn't an instant market success. when i asked steve, you know he was fighting the board to make it cost $2,000 which many thought was high.
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but the board insisted that he charge 2500. his ambitions was such that he tried to do too much computer power. it had a lot of glitches. you swapped disks a lot to get things done. it was little slow. it took a year or two before the power was in the computer enough to be able to do all of these nice things that your panel is talking about there. so, that was a surprise. the macintosh almost failed in the marketplace. >> they're celebrating this weekend in cupertino, is that right? >> yes, they are. apple has a special thing on their website. tomorrow night there's a big celebration for the 30th anniversary. i'm going to do a panel for some of the original team members. >> people are making pilgrimages from across the country for it. >> apple, kelly, it's gained
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16,000% since that mac came out, i was just looking at the chart, lot of individuals who own apple as part of their mutual fund. they were disapointed with apple's lackluster performance. >> by the way, apple had some very very very tough years in there. in fact, was on the verge of bankruptcy. >> even in 2004 this was looked different. >> people don't remember. >> it's all about the iphone. >> and adapting. steve, thank you so much. it was great piece to go back and read. get those final tweets in we're asking how you're playing these tumbling markets. your thoughts up next.
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call... and ask about all the ways you could save. liberty mutual insurance. responsibility. what's your policy? welcome back. another huge day in markets. . the dow did finish down 318 points and we asked how are you playing markets right now? we got a ton of responses. you should look them up. here are some of the standouts. bob tweets i think my strategy is to sit tight watch the drop 10% and drink some jack daniels and then tiptoe back in.
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and bridget tweets. michael tweets -- i'm in, i'm in for the long haul. people still seem to say, either it's not a big deal i'm looking to buy here so not freaking out just yet. >> looking ahead to next week it's going to be so much about inequality. the obama response obama will be known as the inequality because inequality has ramped up. >> you think he'll get the blame. >> think his administration will have overseen a big raise in inequality. to your point, the big thing that makes it drops is falling markets. >> so, it's a double of he edged sword. >> exactly. but it's going be topic number one next week. >> for the markets, everybody's going to be watching the vicks.
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>> i think the key takeaway from this weekend, maybe investors have learned over the last five years not to panic. >> invest in when iskie. we got to hand it over to melissa lee and fx fx"fast money" crew. i'm melissa lee. our top story, global selloff intensifying heavily into the close. tap capping its worse loss since november 2011. the dow is down at 3%. the nasdaq is down 2.7. the vix up a whopping 32%. is the beginning of a market
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