tv Fast Money CNBC March 22, 2019 5:00pm-5:30pm EDT
much mike, final word, big sell-off but the week only down 1%. >> big sell-off, a little gut check. we're right back to the level that we broke out from so i think it's a little bit of a test we'll see if this treasury market signal lasts. >> you're not afraid of an inverted yield curve. >> not yet. >> thanks everyone for watching. have a great weekend. >> "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. coming up on "fast" the suspense is building ahead of apple's big product launch on monday we'll give you a sneak peek on what to expect. semi stocks taking it on the chin today but still on track for the best quarter in decades. one uft traders says the chip rip is just getting started. the dow sinking 460 points, closing at the lows of the session. the s&p and nasdaq both down 2% as all the major indices have
their worst day since early january. this nightmare on wall street could all be thanks to this one spooky chart check out the yield curve, the spread between the u.s. 10-year yield and 3-month treasury bill inverting for the first time since 2007 as the threat of a recession rears its ugly head. financials getting crushed, down 3% today alone so is this the start of a bigger sell-off how worried should we all be, guy? >> hi, mel. >> hi. >> so the yield curve has been concerned for the last six to nine months. obviously today when it goes inverted we're making a big deal out of it and rightly so but everything that's happened over the last six months, nothing in my opinion has changed. what changed, i think, and karen and i talked about this a couple of nights ago, we thought that an overly dovish fed could be negative i've thought this market would sell off for the last month, month and a half, so i'm in the
camp this is the beginning of something bigger earns haven't been fantastic obviously the environment for banks is not great technically what the s&p did this week is really poor so i do think investors should be worried and i do think we head lower from here. >> it's amazing the difference in tone from yesterday to today and what changed in the course of the past 36 hours or so, jeff >> i don't know that that much changed. i was surprised yesterday to see the market do what it did. the fed telegraphed that move for a long period of time. i think you'll get one rally i understand that's already happened so i'm not surprised to see that happen today. if you look at the way the market behaved under the surface, maybe not as worrisome. investment grade credit spreads contracted today high yield credit spreads actually contracted today. so the credit markets are not showing the same panic as the equity markets as for the yield curve, the last
five times the yield curve inverted as it did today, you had a positive s&p 500 return from the date of inversion to the next recession, so that's one thing. number two, there's an interesting dynamic in the fixed income markets with the term premium. the term premium is a large reason why you have this sloped yield curve. it's being compressed and is negative largely because of global central bank policy with the negative term premium, that will make the yield curve structurally flatter >> we have some breaking news here regarding the mueller report let's get to eamon javers in d.c. with the very latest. >> reporter: that's right. what we know is according to nbc news, the attorney general, william barr, has received the mueller report that would indicate that the mueller investigation of possible collusion between the trump campaign and russia is now officially over, and his final verdict has been turned over to the attorney general no word on what that report contains presumably the attorney general will release some details of the
findings at some point in the future no timeline has been established for the release of that. this is an investigation that dates back to may 17th of 2017 robert mueller, the former fbi director, has been investigating and charged a number of officials. he's charged 34 individuals and three companies during the course of this investigation six of those are former trump advisers 26 are russian nationals involved in hacking and other misdeeds, according to robert mueller, the special counsel now what happens that's a good question william barr, the attorney general, has said that at some point he will release details. during his confirmation hearing he said he'll be as transparent as possible but consistent with current law. the law does not require this report become public ultimately the regulation under the special counsel statute requires that this report become confidential and confidentially submitted to william barr.
now we know that barr has that report he'll make those determinations. not clear at what point the rest of us will see what robert mueller has found. >> it has sounded more recently like the president would be willing to have this report be released to the public didn't he say something to the effect of everybody should see this report? i have nothing to hide. >> reporter: the president said both that this report should come out, people should see it, but then he said that determination is up to the attorney general so the president has been sort of having it both ways saying that he feels that the report should come out but ultimately it will be barr who makes that decision presumably there's grand jury secrecy information in this report there's a number of things that might not ae to be made public perhaps ever. but the overall broad conclusions presumably could be made public at some point. the question is what format will william barr choose to do that in now, remember, he also has to telegraph some information under the regulation to capitol hill he's going to have to tell
members of congress whether or not the special counsel requested any action that was turned down at any point in the investigation by the attorney general. that is presumably either jeff sessions previously or william barr so at some point he'll have to turn that information over by regulation to folks up on capitol hill but there's no requirement, unlike the starr report that people might remember from the clinton investigation, there's no requirement that this document, whatever it is, become public i can tell you that the trump legal team was not expecting a book, like the starr report. they were not expecting a large document here. there was some reporting going into today that they did not expect ultimately anybody else to be indicted if we are where we are, where we think we are, mueller having turned over that report, today we didn't see any news of new indictments, it may be the case that this investigation has wound down without any major indictments. the two figures who were at the center of speculation about
whether they might face indictments or face charges here, don junior, donald trump jr., and jared kushner, the president's son-in-law a lot of speculation swirling around them. no news on them at all so presumably we are at a point now where robert mueller feels he has wrapped up this investigation, willing to turn over his final draft to the attorney general the attorney general will decide at some point what the rest of us can see. >> even if there are no indictments at least that we know of right now, let's say that holds democrats on capitol hill seem like they will still want to pursue numerous investigations based on whatever is in this report. >> reporter: sure. >> how can that be much teeth if there aren't going to be any indictments in the first place what can be the worst consequences of those investigations >> reporter: there's two standards here one is a criminal violation and indictmentable offense the other is what is an impeachable offense. that is whatever congress decides it is.
the congress divided in control between democrats who control the house, republicans who control the senate nancy pelosi has suggested she doesn't want to go down the road toward impeachment unless there's a bipartisan conclusion thaex necessa that's necessary the democratic committees on capitol hill will continue the president and all of the areas surrounding the president's campaign, the transition, the inauguration effort and things the president has done since he's been in office. all of that may produce some material that some members of congress decide is impeachable even if robert mueller decided it wasn't criminal also, they might find things outside of robert mueller's remit. remember, he was just focusing on whether or not there was a criminal conspiracy between the trump campaign and the russians to thwart the 2016 presidential election outside of that, all the finances, all the interpersonal dealings, all the things that the president has done in office, all of that is fair game investigatively for the
democrats up in the house of representatives. but presumably if there are no indictments here and if this report is seen as a good one in the white house, the president will be breathing a sigh of relief tonight. >> eamon javers joining us from washington with the very latest. here's a question. the market sold off today. there were rumors all day long that the mueller report would be submitted to the attorney general today, sometime today. do you think that this played in any way into the sell-off that we saw >> i can't say that it didn't. people shoot first, ask questions later when you're on the sell side. i think -- i don't think that there's a smoking gun incident or else we would have heard about that it would have been leaked somehow. we've seen leaks before. so i don't think we're going to get that smoking gun event but i can't say that it wasn't in any way part of the sell-off today. we know what the major themes of the sell-off were today. >> eamon was just saying the trump administration may be breathing a sign of relief because there aren't any
indictments, at least it appears that way right now it still sounds like it's going to be a drawn hef o-out process terms of the investigations. >> we've gotten over an over hang i do think the last hour or so of trading, which was a pretty ugly hour, down more than 150 points and maybe 20 handles, i think it was maybe on this mueller report all of the other issues that made this a bad day absolutely are still there. but i think really it's going to be the southern district of new york if there's nothing in mueller, i think democrats will keep going and look for southern district of new york. >> if you -- if you chart -- when we talk about what the real cause was. now we're focussed on the 3-month/10-year inversion. if you chart that and overlay the s&p. the s&p took its lead 100% correlated and follows it towards the end of the day, follows it in the middle of the day. that's what we're taking the lead from for now.
let's see what next weeks hold as far as if this sticks again. >> is this really the chart, jeff when you go back to pnc and hang out with your -- >> pnc buddies. >> strategists, friends, is this a chart that you talk about? >> we talk about it every month and update it every month. it's not the only thing we look at but we think it's important in figuring out where we are in the business cycle. >> so what does this tell you? >> once the line, which is the composite index of variables, crosses above 50, on average you typically have about eight quarters or two years until the next recession we crossed about 50 about halfway through last year. if we were to have an average experience, that would increase the probability of recession probably in later 2020 >> right guy, are you worried about what this may signal? >> yeah, i am worried. but i've been worried and i have to say i've been worried quite some time and the market has told an entirely different story
since effectively december 24th. i'll say again the concerns i've had, i've had for a while. nothing has changed in my mind the only thing that's changed is the price action in the market maybe it was the fact that it went inverted and maybe that triggered algorithms to sell terrible german data. >> you're right. all these things have been there already, it's usually the confluence of events that all of a sudden everyone says, tap, i'm out. i think it was a positioning issue. i think you have no growth i think the ecb, the fed are all out of bullets now and maybe people are starting to realize, all right, you know what, the risk/reward being here is a little toppy. >> in the market or the u.s. >> i think the u.s. is still the best place in the world, but we are not going to be immune if there's zero growth, the growth in the gdp is collapsing. i don't care what anyone -- we can't factor in 2% gdp
it's going to be below 1%, at least short term. >> look at the way the markets performed from the beginning of the year you had a big cyclical pop in january. i think that's what it was now since february look at what's leading it's tech, it's utilities, it's real estate, it's these sectors that tend to do better when the economy is still growing but at a slowing pace so i think you can move to those sectors if you want to outpurchase going forward. >> things got crushed, absolutely crushed, karen. >> i'm well aware. >> what's it going to take for you to say i've got to lighten up here. this thing is just not working >> this isn't enough to do it, right. so people are very focused on the spread, right, and the spread going negative. if you think about banks, it's a lot more than net interest margin net interest margin has been under pressure for quite some time so the rest of the income statements and a lot of other things go into bank earnings the valuations are not so frothy that people were expecting
absolute boom time so that -- to me it always comes down to valuation. i think that if rates are down and if we see loan growth, which i think we can see, a lot of the economy is really doing better than fine, right then i think i'm going to own them here. it's painful jpmorgan was 108, was it yesterday afternoon? two afternoons ago i can't quite remember that's a very big move i think a name like that here at this level, i'm okay owning it it's going to be a little painful, more painful probably but that's okay. there were a handful of bright spots with this market. the traders will weigh in. it's show time for apple as they are slated to unveil their new streaming service. we'll tell you what to expect. later, there is no place like home builders a couple of key events next week could send the space higher. we'll explain. much more "fast money" right after this ave the investment exe to unlock opportunities other advisers might not see.
welcome back to "fast money. we've got breaking news on the mueller report. >> melissa, we now have the letter from the attorney general sent to capitol hill notifying them officially that the robert mueller investigation has concluded. here it is from the attorney general. i write to notify you that special counsel robert s. mueller iii has concluded his investigation of russian sprrchs in the 2016 election and related matters. now, importantly we talked earlier about this idea that he would have to alert the hill whether or not the attorney
general add any point had overridden the special counsel either jeff sessions or william barr had done that william barr saying there were no such instances during the special counsel's investigation. so at no time he's saying did the attorney general override the special counsel during the course of this investigation that indicates that robert mueller had free reinto do what he thought was appropriate in this investigation the special counsel has sent to him the confidential report as required under the regulations he's saying i am reviewing the report and anticipate that i may be in a position to advise you of the principal conclusions as soon as this weekend so we may know a lot more than we know right now about what robert mueller has concluded principal conclusions as soon as this weekend he's also suggesting that he's going to work with rod rosenstein, who is the deputy attorney general, and also special counsel mueller to figure out exactly what information from the
confidential report he feels that he can make public consistent with the law. there's that phrase again that barr has been using throughout this process he's going to make as much public as possible, he said, as consistent with the law. it may be determined public release would be in the public interest i have so determined and will disclose this letter to the public after delivering it to you. so barr making an effort to be as transparent as possible we're also getting a statement from the white house press secretary sarah sanders saying that the next steps are up to attorney general barr. we look forward to the process taking its course. the white house has not received or been briefed on the special counsel's report i can also tell you just a second ago, a person in the trump legal team texted me their official statement this is the official statement now from rudy giuliani, the appellate's attorney, and jay sekulow, who are counselors to the president.
they say we are pleased that the office of special counsel has delivered its report to the attorney general purr sungt to the regulations. attorney general barr will determine the appropriate next step melissa, at this point the white house is asserting that they have not received or been briefed on the special counsel's report so they're issuing these statements reacting to it, having no idea ultimately what those conclusions are. people on the hill have no idea what those conclusions are we have no idea in the media what those conclusions are, but the attorney general is now telling folks on capitol hill that he will tell them what the principal conclusions are as soon as this weekend, melissa. >> okay, thank you aim jop javeamon javers, thank . after this horrible close that we saw today, it could cause people to feel a little cautious. >> you would have to really get something, a big news event. i don't think you're going to get it that's my gut. i think we would have had some
intimation that you were going to get it. i think the white house knows what the story is. i think we're not going to get what everyone wants -- i shouldn't say what everyone wants, for the market clarification. i think we'll get something that's sort of ambiguous not a real market-moving event this is going to be one more thing that we sweep to the side. as karen said, i think we've become sort of callous to whatever news headlines are coming out out of this investigation. >> if this is out of the way, you wonder if the next step is -- if it's all clear for the administration obviously none of us have any idea is the next step trying to get a deal with china in place after a day the market is down 500 dow points you know the president has talked about it. he's laser focused on the market if it gives back some of the gains, does it speed up his interest in getting this deal done that's what i'd be watching for. >> i totally agree
i think especially going into 2020, the political motivation is there for trump to do something. he doesn't want the economy in recession an doesn't want the market down. this is going to be the political will that we need. i think president xi has the same will. don't underestimate the fact that he wants china's economy to keep growing. >> he's tried over 70 measures. >> 73. so it's been slowing from within he's going continue to try to stimulate using monetary measures, tax cuts, things of that nature, but a trade deal is probably something he's also going to try. after one of the worst days of the year for the market, the traders will tell you their first move for monday. much more "fast" still ahead [leaf blower]
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it was one of the worst tadays the year for the market. what's the fifrs thing you do come monday morning? >> you've got to look at the inversion and see if stays inverted you've got to look at the german markets and the 3-month/10-year is what you look i sold a ton of stuff today. i would say lock in some profits here i sold my square amongst five -- names in my portfolio. >> karen. >> we saw no signs of panic in the credit markets that was one of the things that really weighed on the markets at the ending of last year. i'm not talking about treasuries, i'm talking corporate credit market. that's interesting to me that's scary to me if that starts to unravel. i'm going to look at the vix and i'm probably going to take out my buy pad things are ugly. >> jeff. >> you both stole my thunder i agree the credit markets are incredibly important i think you have to pay close attention. usually the credit markets will lead equities.
so far no signs of panic let's see what monday brings. >> guy. >> so i'm an old commodities person, as you know. i could have stopped at old. i'm old and then we could have moved on but in my past life i was a commodities trader so the first thing i'm look at is the gold market if you see gold up big on monday, it might be telling not only a story about this mueller investigation, but a story about does this inverted yield curve matter and does the torching of currencies globally matter i think it does. it is time for the final trade. let's go around the horn steve grasso. >> even though i love long-term square i had to lighten up i think square is coming in. lighten up on square. >> karen. >> yes, i bought some today from under my desk in a fetal position, united rentals i thought it was so overdone but i would look to buy more. >> jeff mills. >> you want to introduce lower volatility to your portfolio, look at xlu. it's been quietly outperforming. it's not going toparticipate 100% on the upside but likely
protect you if volatility continues. >> guy adami. >> most friday nights i leave this set and go and watch my favorite show from the green room -- >> not tonight >> but tonight i get to participate, which is great. newmont mining newmont was higher today i think that continues to go higher from here. >> and thank you, jeff mills, for being with us tonight. that does it for us here on "fast. we see you back here monday at 5:00 don't move "options action" starts right after this break
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hey there, we're live at the nasdaq market site after a tough day for the markets. we've got a big show for you on tap. here's what's coming up. >> a bond bombshell sending ripples across the markets today. but mike khouw says there's one key group of stocks investors could hide out in. he'll tell you what that is. plus -- >> fire. >> chip stocks have been on fire brian stutland says there's one name that could see an even bigger rip he'll give the name and how to trade it and later --