tv Countdown to the Closing Bell With Liz Claman FOX Business February 11, 2016 3:00pm-4:01pm EST
would think somebody at the fed would have enough stuff that they would know what is going on before. charles: i will blame it on gary. >> make sure you watch making money with charles payne. liz claman, over to you. liz: doesn't know if janet yellen won the superbowl, looks confused, certainly confused the markets, we are watching some mixed moves on the stock exchange, never a dull moment here. and stocks open to correction territory, a major come back in oil but we are watching at the moment, 7 minutes ago this headline across at here is the headline, united arab emirates
oil ministers came out and said opec is, quote, ready to coordinate oil output to shore up crude prices, crew immediately came off of the floor sending the dow on not 200 point reversal, down 411, dow jones industrials suddenly added 200 points, we're down 261 so it is not a sure thing at this hour. that is why we are here for you. the s&p 500 sectors still in the red but it is really financials, energy is leading the way, the s&p still on track, still on track for its lowest close in two years. it is flirting with their territory. and nasdaq covered 30 points above the dubious bear market point. janet yellen gives them the second day of testimony, doing more like adding to the land --
we have been surprised, we didn't anticipate the dollar strength, then she said it again, negative interest rates are on the table. the table is about to buckle if you see things on it. akin to oil it was getting slammed but the major catalyst, 28 minutes, opec oil ministers from the united or arab--it hurts so much, low prices hurt so much we have to do something. the market certainly does, settles $26.21. in a stunning look out below moment the treasury fell in a huge flight to safety to its lowest level in three years 1.64%, looking at that and the level that we need at the
moment. 1.64%, and in south carolina we are all over is that, and up for economy helps them. we are less than an hour to the closing bell, let's start this countdown. breaking news and hear it is, opec suddenly found religion. apparently is to coordinate some type of output, we are swimming in food and a glut of it, we go below $30 a barrel, and crude in the u. s, and opec says we are crying uncle, we can't take it, we are going into that in a second. what a response is fair, we did see loads of losses of 411
points. market swings like 2008 all over again. 32 minutes ago, we had 1810, the level of 1,008 tent, and one crude-oil headline out of one single opec minister and we are 1827. that is what one trader called base ripping rally. as we look at this as we look at this today is the 26 day and a row the dow jones industrials have endured 200 point swings right, left, up down, we have not seen that many consecutive point wins since oct. 31st 2008. that brings us to that 2008 level everyone is worried about. on a day the market is down and is fluctuating all over the place one of the few things that
has glittered is treasurys, gold, look at gold. peter schiff was on this show yesterday saying by gold, if you did, you are up in the money definitely today, gold is up $51, biggest gain in 2-1/2 years. and they are all looking very good, and pandora's box opened and what did we see? headline out of the new york times said pandora is exploring the sale of its self. then they opened it up again. look what happened, traders ticker symbol pea is trading up 9%, i am looking at it 6%, so pandora at the moment, and here is what is confirmed, the financial freak out, the banks i getting hammered today. the worst performer of 2016, we knew that but the sector is
getting slammed once again, have the financial names in the s&p 500 are trading at their lowest level in a year. if you alone any banks there's a pretty good bet they are not doing well. bank of america, prudential, american express, and we started to talk about this yesterday, is the european banks that are showing severe signs of strain, france's largest lender society general, after an earnings miss, credit suisse, deutsche bank, when the german officials have to come out and say deutsche bank is okay, don't worry, it makes people worried. you have royal bank of scotland following the stockton down the rabbit hole and janet yellen didn't help because as she sat before the senate saying oil and the strong dollar made the picture curious and they connected and anticipate or didn't expect all the problems we had that is why, massive swings in the market, bring on
for show and freighters, i want to bring in katie at the stock exchange, we have a paris, teddy, face ripping rally just 32 minutes ago and when you are still down 290 points how can that be? >> we were down 400, down 289, clearly not out of the woods yet, we know why they rallied, the issues beyond oil have not gone away. so many unknownss, not the least of which are the recent fed meetings, listen to janet yellen and i think it confused people more than they were confused before she started talk. it seems incredible that the lights are on but nobody is home. it is scary and the markets reflect that. it is likely are walking on soft sand and no one knows what is going on. liz: i was listening to janet yellen's testimony today which distressed me because we are looking to her as one of the smarter people in the room,
tweeting, quote, we have been surprised by a bump in oil, we didn't anticipate and we have been surprised. a frequent contributor to fox business said i don't think she knows who won the superbowl. i get it, she has a very tough job to do, but doesn't help herself for her cause today. >> two things the market does not light, confusion and uncertainty. if there's anything janet yellen did over the last two days she had confusion and uncertainty to the marketplace and that is why we are seeing these violent reactions especially to the downside. there is no rhyme or reason for what she has done, giving any guidance whatsoever. with the added uncertainty, volatility, we are seeing the vix so escalated here and some people are looking for that selfish toned we didn't find said that coupled with the uncertainty is why we are seeing
this violent reaction. liz: this did not help as she faced members of congress. central bank was already below zero for interest rates but further below following japan, down the rabbit hole so she was asked what about us and she said again negative rates have to be on the table. as i said the table is about to buckle here. >> somebody is wrong here and we have talked about this for weeks. she is going in one direction and the rest of the world is going in another. somebody is right at somebody is wrong but they need to get their act together and i suspect that the negative side of the equation looks like it is the right side of the equations because that is what the markets tell us. liz: it is great to see both of you indeed is hydrators one of
them saying yes. we love can be. one of the traders did say to me no one wants to trade in this environment because there doesn't appear any y m or reason. you have a definite reasons right now. we thought let's bring in muhammed, the old saying used to be when you don't know what to do you can run the other way, go down the rabbit hole or you can call in the smart money. great to have you on the show today. and members of the senate today. and and any spasms in the european bank sector, to cause contagion. >> this is not a lehman moment, what the payment system is under pressure and that makes 2008 so
scary not just for the markets but the economy. this is weak pricing of banking around the world and for good reason. earnings are going to come down because of the compression of the net interest market, credit quality is coming down and investors know that their backs are no longer covered by the officials sector so this is a massive rephrasing of the banking system and banks that are vulnerable in europe will be hit particularly hard. liz: will love and be forced if not to go negative, at least for now take back that quarter point rate hike it instituted in december. when you see these markets, not the best or strongest economic data it does make you wonder. >> that is what the markets want and the reason we are getting this violent reaction is we have been addicted to the fed and normally the fed comes in quickly when this type of volatility, it is not this time around and for good reason. they want to get out of this
business so we have to understand this. we are coming to the end of the road where we could rely on central banks to bail out and repress financial volatility. i don't think the fed is going to want to go to negative rates. i think they will manage the expectations and say forget about the hikes' address a few weeks ago. >> what has the fed proven by being given a test and checking off every single answer box? yes? no? may be? not sure? it does hurt the confidence right now and i am not surprised we are seeing the gyrations and neck twisting we have seen here at the new york stock exchange and trading floor. >> this is part of a bigger issue and i wrote a book on this i feel so strongly. we are embarked on what the english, tee junction, the road we are on, this one here of central banks repressing financial volatility and we
being able to get away with low but stable growth is ending. we will no longer be able to continue on this road but what comes afterwards is still open and what you see markets do is the reality we have bar and financial returns from the future, borrow the growth from the future and we have to decide are we able to produce it now? liz: there is evidence that people, certainly in europe, not putting words into your mouth about the banking situation but bring back these lehman like gyrations at least in europe, people reporting cash on the ground in europe. are you seeing any of that type of behavior? when you look at gold today this is a big jump in gold, up $53 which at one point we were up $60. we blew through all kinds of resistance levels in a single day. i you seeing that orting behavior and could that lead to any kind of as i say systemic
crisis like 2008. >> the bold move turns to what gold used to play in this a haven. we went along period where gold was unloved. gold is returning to its historical role. second, not just gold has moved to. let's see what happened to the yen, thus yen a euro process crossed today and many people -- the one we just pointed out, so far all the volatility contained in the financial sector. it is the glee that contained the financial sector. if it spills over to the real economy, if it makes people more risk averse and people spend less, what is of financial problem becomes an economic problem that feeds into financials. your question is critical and we have to keep a close eye on whether we get spillover and still back. liz: psychology is a funny
thing. people can talk themselves into things that are not there. do you foresee a recession? people could blame the media, and say you are making too big deal of this but i'm just pointing out certain things, certain problems that i see. do you see a recession dipping into the u.s.? >> the probability of a recession in 2017 at 30%, and lowered this year, 30% is significant because we don't have much ammunition in terms of policies to respond to that. it is not the baseline list, the economy is pretty strong, it is not great but still pretty strong. keep an eye on any spillover effect. liz: do you foresee a bailout of any of these industries? people told me i was absolutely crazy but the world bank is starting to look at stern nations that are invested in oil.
could it come to that as you see opec can't figure out what it is supposed to do? >> countries like venezuela, ecuador, nigeria, russia will have enormous difficulties. on the opec story be careful, opec may well come out, i don't think they will but they may well come out and say indeed we will cut production. it will be very difficult to impose this on countries with huge financial issues. we hole have cheaters so it is one thing for saudi arabia to cut production but others are going to produce as much as they can and make this agreement difficult to implement. let's not get carried away with this notion this is the old opec. liz: it looks like the old opec. wonderful to have the. everybody should read the book the only game in town, he feels passionately about it, no recession just yet, probably not negative interest rates but
there is a very good position, great to have you. we are 44 minutes away, dow jones industrials down 280 points, 411, the dow heat map as we call it is red. not entirely read but cisco systems bucking the trend up 10%, this after the network equipmentmaker was up better than expected when it came to earnings and increased demand for products, $13 billion share buyback program they instituted. cisco looking pretty healthy right now. up next the presidential campaign trail leads us all as we said yesterday, south carolina deeper and deeper into the south, are there any political winners? how do you capitalize on an ugly picture like that? dr. ben carson is live in south carolina right now speaking about all of what is trying to
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to take a look at the dow jones industrial level, 15,645, he says if we close below 15,666 which is well below that more, we may see a kick in to the dow theory sell-off. look out below once again bet holding down 277 points for the dow, the s&p down 25, if you look at where we were, the s&p had been down 41 points so we could cut that in half. this morning some good news, first-time jobless claims came in at their lowest level in seven weeks, report earlier this week that job openings numbers that we get actually in december was at a record high but the republican presidential front runners calling bologna on all those data points, donald trump talking about that with stuart varney.
>> if you add up all the people that have looked for jobs and cannot find them and now have given up looking, you're talking about 25%. liz: on the other side bernie sanders been moaning of the fact that a lot of people either don't have the jobs they want or any job at all. on both sides it becomes the polarizing issue. who wins in a questionable economy? make you whitman is democratic strategist for then senator joe biden and a columnist for the new york post in a fox news contributor. good to see you. gentlemen, on the surface we have positive data so that goes to the democrats, jobless picture looks better and the dow looks worrisome since 2009, we have come off of those lows so who wins? how do you play a questionable economy on the democratic side?
>> no question that the economy is in better shape than it was before barack obama took office. we had before george w. bush, george h. w. bush, bill clinton did better, barack obama did better than george w. and i assume the next democratic president will do better than the next republican president but let me say this. i love being on with a reporter from the new york post, my favorite newspaper. i disagree with almost everything that you write but i love the new york post. liz: talk to any ceo, the times, the journal, we reach -- your columns have been tough on barack obama. let me shed this year to john kasich who had a nice showing in new hampshire by making the economy a real cornerstone and it has worked for him. will it continue to work for him or does what donald trump says
which is what people feel is not a great job market, will not work better in south carolina. >> i would throw bernie sanders on to the republicans side of the ledger in the sense that he's criticizing the economy. he does not find real fruits from the obama economy. hillary clinton is the obama economy, one of her burdens. the idea that a democrat can profit from this economy is mistaken. neither one of them feel that way especially on days like today and i should say almost any event that happens from here until but election is likely to favor the republican candidates because whether it is terrorism or the economy or just the continual beating of the market down i think all of those make it difficult for a third consecutive term of one party. that has been the recent history. only george h. w. bush following reagan. normally you get a switch of parties after two terms.
that is what days like today make more like. liz: how do you account for that? >> michael makes a good point in that standards -- bernie sanders is not running on the obama legacy and hillary is running on that a little more. we are about to see a real divide between obama and hillary. between hillary and sanders, this gives hillary and opening she may not have had before if sanders is being critical of obama. on the republicans side have to tell you that john kasich is a the most general election candidate to win. it is donald trump pour ted cruz it is hard to see how they could be hillary in a general election. liz: yesterday carly fiorina, chris christie stepped aside, where is ben carson? in all of this discussion when michael, we have the black caucus endorsing hillary clinton and bernie sanders trying to curry favor with the black vote ben carson is an
african-american and is not even part of this conversation. >> the process is working. the idea of each state to we know down the field, republican -- 16 or 17, down to 5 or 6 main candidates still standing and i think ben carson is probably the next one to leave the race. after a while it gets frustrating and pointless and they don't have money and they run out of time, they run out of money because they don't have enough votes. i think we are down now in south carolina to a very different demographic in nevada as well for the next week to stages of both parties and they switched the war. i think this will be a further definition of the race on both sides and with bernie sanders, can he break out of the northeast, can he be a different candidate, can he be a national candidate? that is his test? donald trump we already see
strengthened in south carolina so i think the races are each proceeding as they should, winnowing -- >> i don't like agreeing to with you this much that you are right on this one. ben carson is the next to drop out but the republicans side as much as i think john kasich will get into the final three is going to be between ted cruz and donald trump and the republican party better get used to it, there's no establishment candidate. liz: everybody around here is a watch out for the guy with the most money, michael bloomberg, that will be a discussion for another day. we will bring you both back, long way to november, thank you very much. by the way, with 32 minutes before the closing bell we are down 262 points, be sure to keep it here, we are watching your money, how each of these candidates will handle the economy. fox business is going to be live on saturday february 22nd with south carolina primary and nevada caucus.
coverage starts at 6:00 p.m. eastern time. tell us where you stand on who is best for the economy when it comes to all these candidates and you can tweet me at liz claman, go to lizclaim and.com. "countdown to the closing bell" coming back. we are a little concerned about the dow, 16,072, stay tuned, you and your money covered.
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. liz: 27 minutes before the closing bell rings. folks, we're blowing out the commercial breaks at the new york stock exchange. why? there is a lot on tenterhooks at the moment. when you see the dow jones industrials down 250 points, we need to back up and tell you it had been down 411, then spiked higher. but still down. we were able to come up off
that floor. why? i'll tell you in just one second. we need to show you two travel sites, managing to buck the market sell-off at this very minute. this as oil plummets, at the time it was below $27 per barrel. we are above that right now, i can't see that at the moment. maybe somebody can confirm that for me about, oil? can somebody confirm that for me, please? $26.95. thanks. we have team coverage of all of today's big moves. ashley webster with me on the floor of the new york stock exchange, and jeff flock who's in the pits of the cme, looking at oil and all that's happening right now. ashley, to you first, you and i were right here at 28 minutes past 2:00 p.m. eastern time, suddenly, it was a little mayhem here on the floor. >> reporter: there was, it was interesting because the market dropped to 400 points or more down as you mentioned, liz, and perhaps uae was going to coordinate something, they were
open to production cuts. want to talk about the stocks that moved higher. pandora, trading up here, pandora up 10.5% in a tough market onews that it is looking to sell itself, and morgan stanley to help it perhaps find a potential buyer. struggled to attract new users, the number of members in 2014, the stock was halted for about five minutes midafternoon, while that news was put out there. that stock moving much higher. pandora says no guarantee we are going to find a buyer. tripadvisor, cisco, century link, expedia all doing well, up 8, 9 or 10%, on the other side of the fence, if you like, the financials, the sector that performed the worst so far this year and continues to struggle. maybe not as bad as european counterparts. we have goldman sachs up here down 4.25%, this hour. we have bank of america down
hitting 52-week lows, citigroup, wells fargo, morgan stanley. the financials especially in europe added to the anxiousness, liz, you talked about this with the concern of the bad loans on the books in particular in italy, not the same here for sure, exposure to energy companies here and probably won't be getting a rate hike in the near future means the banks won't be able to earn more money on the loans. financial sector feeling the jitters just like everyone else and a poor performing sector again today, liz? liz: ashley, come back more right now, at 15,692. now down 220, make that 219 points. we're going to watch this second by second. oil coming back on that too, oil minister saying we will cut outyou and the that brought up oil off the floor which is below $27 a barrel.
the crash got people's attention, to close below 27 made people wonder how much longer can the opec nations hang in there, and looking at how it's like the steering wheel and the -- i don't know what this means, takes the steering wheel and drives stocks lower, but opec's news certainly is changing the picture. let me get on jeff flock at this minute and traders in the pits of the cme about the headline. >> well, here's what else they say that the saudi or i should say the uae oil minister said. in addition to saying, and again the latest rumor, we might be coming around to a potential production cut. he said non-opec members have already begun to cut production. that is to say begun to shut their production down and not sell into the terrible market, and so that also has boosted things. we're now over $27 in the after-hours. $27.04, as you said, we closed
$26.21, down 4.5%, six straight sessions to the downside, as you know in january, we got to $26.19 in the intra-day. it didn't close that low. this is the lowest since may 8 of 2003. all you need to do is get a rumor or talk about an opec cut and you see what happens, not only to oil prices but to stocks as well. wow. liz: yeah, jeff, thank you, the traders are saying you've got to watch these levels on oil because they are so unbelievably volatile and, yes, everybody wonders that age-old question, low crude prices mean low gasoline and isn't that great for the consumer? consumers will have more money that they aren't spending at the pumps and spend elsewhere but looking at the national average of gasoline per gallon, this is the average, we know some of you are paying a lot more and a lot less. a buck 70? that is unbelievable. and definitely below $2 in new
jersey, where they'll pump your gas because they have to, why not? let's bring in oppenheimer senior strategist, says the price of oil is unsustainable at current levels. is that what we saw today shortly after 2:30 p.m. eastern when the uae minister said they will cut production, do you believe opec will cut out rates? >> very difficult to think it's going to go through, it's more wishful thinking and wishful thinking is not a plan. rumors could move the market temporarily, we have heard this rumor before. the $64 question, who is willing to cut by how much and for how long? everybody expects saudi arabia to carry the big weight and cut its oil production unilaterally. that obviously did not fly at all, and saudi arabia is actually increasing its
production to force opec's hand. liz: hold on, hold on. you're saying that just as the uae oil minister is announcing to the world there's going to be coordinated cuts that saudi arabia of all countries is increasing output? >> absolutely. saudi arabia is actually increasing, has been oil production. it's a price war, they want to protect market share. every time saudi arabia in the past played the swing producer, when they come back to the market, the other opec member and non-opec member occupied their seat, took the market share. the big battle is between saudi arabia and russia in order to take the chinese market. saudi arabia is not going to let the russians get away with it, in my view, geopolitics is moving the oil markets more than supply and demand. saudi arabia is likely to
punish iran and russia because of their meddling in the middle east, this is paramount in terms of priority. so therefore, i don't expect any short-term solution. it has to be longer-term plan, and russia has to adhere to whatever agreement they arrive to. liz: we're coming back on the dow, i need to tell our viewers now, we're down 188 after having been lower by 411. janet yellen today, i don't know if you heard her say this, i couldn't believe it she said, we've been surprised by the slump in oil prices. this slump has been going on for a long time. can i just ask, could oil prices be impacted and how, perhaps could they be impacted if janet yellen decides either to take back the quarter-point rate hike in december that they put in. mohamed el-erian doesn't see that happening, or goes negatively? how will that impact oil
prices? faddel? >> yeah. >> janet yellen? >> this is going to be very minor factor. i do not believe that that is going to have a major impact. the only way that oil prices will recover is for at least 5% production cut, and to be for a long period of time, not for a week or two, but at least three to six months to take away the oversupply that we have right now, and i don't think that's going to happen in the near term. i really believe there is going to be sloppy market for at least six months. liz: fadel, great to have you, again, you've been watching these markets and been an intimate player in these, when you say even saudi arabia cannot figure out how to cut output, again, it's great for the consumer. how much lower does gasoline go? buck 70 a gallon is the national average?
>> well, i don't believe oil prices at the current level will be sustainable. they could stay for a week or two months or two, but not forever. having said that, gasoline prices will always mirror what happened in the oil pits. if oil prices go higher, gasoline prices go higher. we also in the demand part of the season, come spring, gasoline prices will probably move up higher because the demand is going to be stronger. liz: people still look at gasoline prices as a barometer of the health of the economy. they don't see it at the moment. great to have you, thank you so much. charlie gasparino is with us right now. charlie, as we look at market, down 179. you could argue this is definitely a comeback. >> definitely a comeback. liz: what a day. >> i think the most scary think about the market when i'm talki talking to hedge fund guys is the lack of conviction on
anything other than oil prices. i mean it's an odd market that traders, real sophisticated traders, they have a hard time grappling with it, and i will say this, if you listened, and one reason why you know. that listen to what janet yellen said. she didn't quite say we're going into a recession, but raised the issue of possibility of negative interest rates. what planet is janet yellen on if she says we're on negative interest rates? that means what she sees in the economy -- liz: she said it's on the table. >> why is it on the table. liz: put it on the table. that is a very prospect. >> liz, i'm going to tell you something, janet yellen, when you listen to her speak and cut through the fed mumbo jumbo is contradicted barack obama, president obama's reading of the economy. she comes out there and talks about massive headwinds and possible negative interest rates, i don't have the exact
verbiage, anybody can google it and find it out which is the opposite of what president obama said, employment is going down, great economy, everything is hunky-dory, the same thing with hillary clinton. there is a real disconnect between his appointed fed chairwoman. the person that is the most important person in his administration -- that he's appointed. not quite in his administration, the fed is a separate agency, but the most important person he appointed is singing the tune different from what he's saying. >> i don't know if you saw wilbur ross, and i want us to cue up what wilbur ross said yesterday, rather elegantly but quite bluntly about what janet yellen was saying yesterday, and that would be the d-word, dithering, listen to what wilbur ross said. >> to show tentative views about the economy is a bad thing for the federal reserve chair to do.
i think part of the reason that we have the market is they dithered and dithered and dithered about the first 25-basis-point hike, and so it became an event blown all out of proportion. liz: what do you think about that point? >> i agree with his assessment, his assessment of her policy, of her fiscal policy, i'm talking about something different, excuse me, her monetary policy. talking about something different. her assessment of the u.s. economy seems to contradict the assessment of her boss, and i think that's something scary, i should point out -- liz: she should argue she is independent, charlie. >> she was appointed as a dove, she was appointed by president obama. his hand appointed fed chairwoman is contradicting him, and that is a pretty big political story. i will say one other thing, for people out there wondering whether to get back into the market.
we have a 10-year chart of the market, pre-financial crisis, post-financial crisis. throw it up there, it will be nice, you will see you didn't gain that much over the past approximately ten years. that's it. liz: since 2009, definitely come back. >> that's not the chart. liz: you're saying encompass that. >> first off, that is not a chart of stocks, that's a chart of treasury yields, going down, we know that. give us the 10-year chart of the dow, approximately ten years, you returned, if you invested, it's about a 10% return. liz: let's bring in adam. you were looking at the fall in the ten-year yield, all treasury yields here in the united states. wow! >> a bit of a recovery now. the 10-year note is below previous yield close but back up to 1.64%. the 30-year, the longer term is up to 2.49. so there was earlier this
morning, earlier today, a lot of people buying treasuries because they were -- for lack of a better word, afraid, panicked, there seems to be ease off from that and starting to see yields not better than where they closed previously but still going up. >> liz, despite all the monetary easing we have. can we get the chart up there? the stocks have not done that great. i know we've got a financial crisis, there's issues, okay, thank you. was that the chart they wanted? yeah. up 12%. liz: that's the 10 year. >> not bad but not great, not great for all the stuff that we've thrown at this market, easing, quantitative easing, operation twist, 0% interest rates. about time the economy, i think the markets want to reflect the economy, and it looks like the economy is getting worse and they don't care about easing anymore. we're off our low highs again.
liz: yeah, and adam, you know, again, and i pulled this out a couple of times today, twice, janet yellen -- you could call her really honest, okay. we've been surprised by a slump in oil prices and we didn't anticipate the strength in the u.s. dollar. i don't expect people to have a crystal ball, but the slump in oil prices, how could that surprise you? that's a simple supply and demand issue. too much supply and not enough demand. how could you admit to being surprised by that? >> not that the federal reserve is paying much attention to the note that different analysts put out. wasn't it citi, an analyst said oil would hit $20 a barrel, everyone said no, it's not going to happen and everyone said it at goldman sachs. someone at citi said it over a year ago. there were predictions, i remember talking about this with the fox affiliates toward the end of last summer, there were predictions that we would
see gasoline because of falling price in oil go below $2 a gallon come christmas. we were talking about that in august. how the federal reserve missed that when we were talking about it and everyone else was talking about it is beyond understanding. liz: here's what is definitely understandable with all of the fear, the gold bugs are doing the macarena and the happy dance altogether. let's bring in frank holmes, watched gold and participated in booms and busts when it comes to what's going on in the gold world that u.s. global investors, why should i believe that the rally today which is significant is for real now? >> well, i've always said that it's always best to have a 10% weighting and rebalancing each year, going to show having the weighting in gold is helpful when you have the uncertainty in markets. and also on a seasonal basis, gold historically rallies up to the chinese new year. it will be important to see what takes place after that. last year out of the box, a
spectacular rally and rolled over. what is different this time, liz, is real interest rates are negative for most of the world, and even with the 25-basis-point hike, you're seeing ten year from the summertime, five year bonds, all trading lower. there is a real interesting development, and because the normal rates are next to nothing, it's hard for people to see what's happening underneath the hood. and since 2011, when gold hit 1900, the ten-year government had minus 3% real interest rate, and 2% and gold fell. liz: tell people the best, the best way to invest in gold with all that we know right now. because we're now above a key level. now we're at 12:44 at this very second for gold would you buy etf? physical?
would you stash the gold like my dad used to do? >> i would buy gold for the one i love before i buy i gold stock, if it goes down, i'm not going to get in trouble. if i was to look at the gold world, it's a wealthy company. liz: you own that? >> i own it and it's always done well. liz: interesting to see what's going on here at 12:44. do you think we hit that soon? >> look at south african gold stocks to date. harvey up 8%, currency is falling relative to gold, and price of oil is falling and energy costs has dropped. australian stocks are up 700%,
there are stocks in the arena but you have to -- >> i like the steve jobs turtleneck look. it's perfect on a day like this. john holmes, thank you very much. we have seven minutes to go with the dow down 196. what a comeback sam stovall, you're at s&p right now. you joined us about a week and a half ago, you got to be careful, places to go, i believe health care was the place you mentioned, still there? that was a rough ride today. >> we're in a correction mode right now. people are thinking bear mode. they have to realize there is no place to hide in the equity markets. the only place with a correlation to stocks is bonds, pushing down the yield on the 30-year, on the 10-year, et cetera, i say go after quality,
the companies that consistently raised earnings and dividends over ten years or with the idea of the dividend aristocrats over the last 25 years because those are safe havens within the stock market, they tend to lose less than the overall market. liz: can i bring in mike ryan the of ubs? along with gus fechet, gus to you, looking at the macropicture, jobless claims today, but the markets don't want to see or hear good news, they want to but they're not absorbing them at the moment. why is that? >> i think they're concentrating what's going on overseas. definite weakness there, concern about the yuan, about chinese growth. if you look at domestic fundamentals, they continue to look good. good job gain, low gasoline prices, good for consumers, i think we're in decent shape in the u.s. right now. liz: mike ryan, all the places
to invest, people are going into a bear cave, they are nervous, but a guy like buffett would say buy ugly and buy a lot of it. what is ugly and the best to you? >> one of the areas beaten down is the energy area. we've been talking about concerns of lower commodity prices and the impact it's had in terms of the commodity producing countries, certainly an impact on energy stocks in the u.s. we expect to see that even as oil prices maintain current levels or begin to stabilize, the earnings in the companies have tremendous upside to trading extremely distressed valuations, i think one of the areas that could be a surprise in 2016 could be the energy stocks that are beaten down.
we had been down 400 points. sam, are i worried about the u.s. dipping into recession? >> i'm worried that the u.s. could be pulled into recession. i feel that we, the economies around the globe are not decoupled. mountain climbers tethered together. u.s. might be lead climber with solid footing and firm grip but if the other countries false they will bring us with them. liz: like the movie, vertical limit where they're all hanging by one rope. mike, you mentioned energy. is there anything you absolutely avoid right now? >> the area under the most pressure is financials. for good reasons. there is concerns about the credit quality. there is concerns about earnings. i think this is overdone. i still think there there will e volatility within the financial space until we get proof points, proof points we're not seeing more systemic set of concerns across the entire financial
sector and validation that banking can continue to make money even during a low rate environment. liz: gus, it may be overdone here, what we're seeing with financials in europe, italian banks look weak and sketchy. mohamed el-erian was here earlier. he didn't see lehman-like famine in europe. when you have hit limits down and soc-gen tanking 13%, have you worried about systemic spreading european banks coming like the mountain climbers talking about being tied together hurting our banks? >> i don't think so. i think u.s. banks are very well-capitalized. we had the stress tests here which is very good for banking system. stress tests in europe haven't been as rigorous. they haven't been exposed tota. i think we're largely walled off from problems in europe. i think overall the u.s. financial system looks pretty solid. david: well, let's end it on
that. i don't want to go any further. i need optimism here today. i want to thank all of you. sam, gus, mike ryan, franks holmes looking at oil at moment. review where we have been in this hour. we have been down and now we're down less, down 220 points for the dow jones industrials. we can cycle through intraday so you see what happened today. it all turned around about 2:32 p.m. eastern time. we're still down. i say turned around, coming up 200 points for the dow. united arab emirates foreign oil minister said there will be, grain of salt here, there will be coordinated cuts when it comes to oil out put. fadel gheit who is real expert says he does not believe that saudi arabia is pumping more and more each day. what is happening with oil? it is still down but not out like it was earlier today. gold is a big winner. no surprise if you're watching
peter schiff yesterday said buy gold. certainly in the money today. who knows if that has bottom legs. thanks for joining us with two minutes, make that one to bo, let me head it over to david around melissa back to headquarters in new york. melissa: liz, thank you so much for that. david: great coverage. melissa: wild ride on wall street as stocks try to stage a major comeback in trading after dropping more than 411 points today. david: it came back a lot but still pretty far down. what should you do with money during times like this? we got you covered. melissa: all this as the campaign trail continues in the deep south. take you live to south carolina with the candidates there. david: first get back to stocks. well off the lows after that huge drop of more than 400 points this afternoon. all kind of turned around when there was word out of opec maybe they will cut production after all. of course we heard that before, folks. so be wary. nevertheless the market is down a lot less significantly than it was. it is down now about 242 points on the dow.
[closing bell rings] make that 248. it is trading down as we end this session. nowhere near the 411 points it was down at one point but everything is down, look at that chart on gold. $50. at one point it was up $55 at 1250. this is huge jump in gold. we'll have that covered. melissa: all the expert analysis of the markets and what you need to know. first to ashley webster at the new york stock exchange. ashley, talk to us about what happened? reporter: interesting, i spoke to one trader said i have two trades, sell equities buy gold. someone else said to me, how said a statement is it that only thing can pump the market up is news opec may be cutting back on its production. opec is one bright spot when it comes to equities rising. no doubt about it, there is fear in the air. it is not 2008. certainly a sense things aren't so good. what is going on? we have a slew of things come