That requires a 6. 4 decline we are just around that level at the moment the s p is on pace for its worst week since november 2008 the nasdaq since january 2016. You know what, the dow especially, comparing it to 2008, the drop we had was Something Like 17 yes, its the worst since then, but were still nowhere near where it was 18 . Was it 18 thank you. The key level is 23,885 if we go below that at the close. It is the worst week since 2008. But nowhere near as bad as that week. Exactly well check the action as we look to close out this week. What a week its been. Bertha coombs is at the nasdaq watching the movement there. Bob pisani on the floor of the nyse bob, lets start with you on the session today. Im a little encouraged today for the first time all this week because were starting to see a little bit of buyer interest let me show you an intraday chart of the trading activity. Ive circled the key point almost every day this week, we have seen rallies on lighter volume and the declines on heavier volume you see those first four circles . Every time we drop, the volume picked up. In is an intraday chart of the s p 500. Now, though, for the first time really this week, you see that last circle there . All of a sudden in the middle of the day, we picked up a little and suddenly, boom, the volume picked up. Buyers came in thats a very good sign. So, lets call this searching for a bottom weve had no letup in the intraday volume or the volatility the sudden volume surges have been indicative of the deleveraging process, people lightening up on their positions all week rallies on lighter volume, declines on heavier volume we will nowhere reach a bottom when this kind of activity stops and well get buyers coming in again, i dont know if it will be positive or negative but i see encouraging signs. As for sec stores, we mentioned buy yields have been moving down theres a flight to quality. Utilities have been outperforming. Reits have been outperforming. Industrials, utilities, finally we just want to remind everyone, this is a global decline it is remarkable the entire world is down 11 . Shanghai, spain, hong kong shshgs japan, germany, the United States, everything is down 11 to 12 . You rarely get that kind of decline. Part of that global de lleveragg process. Any idea what sparked that pickup i did not see any headlines we talked all this week about inflation risks that are out there. Somewhat higher, i think, on concerns particularly about the new budget deal. We do see, of course, the overall value of the market, the multiple dropping a little bit, so stocks are a little cheaper weve talked about that. If you want a headline that said this would have turned the market around, no. We havent seen that all week, wilf theres been nothing in the middle of the day where we see big volume spikes, big drops that are headlinedriven. Thank you weve been fluctuating between gains and losses on the dow here the worst session lows we were down 500 points, 1 40 and then up 100. It was a quick turnaround from the highs to the lows the nasdaq is up. The nasdaq has given back two months of gains and on pace for the worst week since may 2012. We have some that have moved higher as we see this up nvidia is top gainers after strong earnings. One of the few big cap tech stocks that is not only up for the week and the year but also hasnt broken its uptrend we talk about the nasdaq 100 and the nasdaq being down 10 in corrections. Half of the nasdaq 100 stocks are over the moving average, they have broken their trend line 40 is below their 50 those below that, apple, facebook, are below you get those big caps moving back, thats pulling us lower. When you look at week to date, some of the biggest losers, expedia after those disappointing numbers, down 18 for the week some are starting to be a little positive for the week with this pick up. Take a look at tesla that one has been one of the big momentum stocks and those are being punished the most. Back to you. Bertha, thank you for that. I want to mention those moving day averages we talked about a lot already. Clearly seen as a spark for more selling. If we look at the last week, international markets, hong kong, japan, france, germany fell below their 200day average. We saw buying off the back its usually a selling signal and it wasnt this week. Its been almost exactly two years since weve experienced this level of volatility last time it was attributed to an unlikely savior, albeit im not sure he would like to be described as a savior, dominic chu. You have to go back to may 2015 may 20, 2015 to february 11th, 2016 mark. Thats when there were a lot of concerns about china and Global Growth and driving stocks lower. Between then record highs and the bottom, large cap s p 500 fell by 15 from peak to trough. Thats bigger than the pullback were seeing now, to keep that in mind and for perspective. A lot of factors went into the market bottoming out from that time one of the market calls came not from a market technician, it came from the ceo of jpmorgan chase, jamie dimon in a regulatory filing we found out he bought half million shares of his own companys stock. At the time it amounted to a 27 million bet in this trade. Shares of jpmorgan hit a high of 117 bucks, back on january 29th of this year more than doubling his invested capital in just that one trade just like you said, two days away from the twoyear anniversary of that big market call on this latest downdraft, a big question will be, will a big company ceo step up and make the same kind or similar valuation call that jamie dimon did on their own stock . It could arguably be a big psychological boost for those worried about valuations or whether its too late to get in on the bull market run one thing to watch in the coming days and weeks, depending on how the market plays out between now and then, is if theres any notable insider buyer coming in. Were, by the way, still in earning season so there may not be the ability for executives to make big moves out of sort in their own stock. Will we look back at some point and see if we end up calling a hypothetical bottoming process the name of another bigtime ceo. Kelly, wilf, back to you. Maybe some are thinking, i wouldnt mind having that glow around me. Stepping up. Then they get the label of unlikely savior. That still works. Dom, thanks for that. I do think this is fascinating when we compare it to what people are talking about now, which is Company Buybacks cle if a company is doing buybacks its because they have too much capital. Companies havent shown theyre price sensitive about buybacks at all. Where this is a powerful signal, if we get it. Yes joining us with the dow down 62 points to talk about these markets and what ceo could be the next to buy their stock, victor jones from Td Ameritrade and david joy from ameriprise financial. Vick store, what are you looking to in terms of how we close up this week in terms of how healthy the market is . If history has shown us anything, when we see these spikes in volatility, it doesnt spike. We saw is it on monday, we saw is it back on august 8th of 2011 and then february 27th of 2007 in the former two cases, we saw elevated levels of volatility remain in the marketplace for two to three weeks after that initial event. While the underlying fundamentals of the economy hasnt changed much in the last seven days, the psychology of the marketplace certainly has. While that failed rally on tuesday, a lot of people may have looked at that and said, some of the bulls may sit on their hands in terms of buying dips the energy were seeing in the marketplace today is fairly encouraging. The last hour of trading here today may prove to be pivotal in terms of setting market psychology headed into next week david, we mentioned 2016s bottom in terms of some similarities potentially if you look back at history, are there any other moments you think kind of compare quite closely to what were seeing at the moment well, without sounding alarmist, in my experience this reminds me an awful lot of 1987. We had a very good economic backdrop, just as we do now. We didnt have a recession for another three years. But we had another a similar situation to the extent that inflation was starting to rise under the leadership of a new chairman at the fed. And he started raising rates early in the spring. That caused bond yields to rise. Stock market corrected a little bit. Stabilized then bond yields started to rise much more sharply in the summer. And, of course, we know what happened in october with the stock market crash so, this reminds me of that backdrop in a lot of ways. So, i suspect this psh weullba were seeing is going to exhaust itself fairly soon and then well see a period of stability. I do believe bond yields remain the critical factor as to what happens next. Theres the tenyear. Its moved a little lower this afternoon. Victor, from what you can tell, who is doing the bulk of the buying and the selling here . From our clients perspectives are on three key things i dont want to speculate on whos doing the buying but valuations are top of mind for our client exposure in beta exposure we had a positive reading in imx, it measures our overall client exposure. Through january our clients used it as an opportunity to pull back a little bit into that market strength. Then beta, lets talk about beta for just a moment because i think when you see these rising rates, when you see us get up to 2. 8 and 2. 9 , those lower beta names are going to start to become a little attractive relative to high beta story stocks we talked about with higher multiples i think our investors our traders in particular are very aware of that here at these levels. David, any stocks in particular that stand out to you, these valuations . Well, i think the tech sector broadly speaking is much more attractive than it was a couple weeks ago. I did a little buying in the tech sector myself this morning. I had a little bit of buyers remorse for the next couple of hours, but i do think were getting close to the bottom and with the pullback in that sector, in particular, i think is maybe a Good Opportunity to get back in. Guys, thank you very much for your time. Victor jones and david joy about 45 minutes to go, a little more than that the dow is back down 108 points. Weve already been on 158point swing so you can add this on top of it. There was a bit of calm before that interview. Its turned south. We wont blame them. As its done all week during this hour. I thought it was down to you and bill but its just this hour. Be careful if you tread here. Anything could happen. The s p is down 5, nasdaq down 11, russell down a couple. A lot more still to come here on closing bell. Announcer ahead, the pros who read the charts are making out of all this market craziness. Plus, more advice for you and your money as these markets rip gh arolower. The closing bell is back in two minutes. And highdividend strategies. Sure, these are investments. But theyre not what people really invest in. What people really invest in, is what they hope to get out of life. But helping them get there takes a pure focus. Because when you invest their money without distraction, hidden agenda or competing interests, Something Wonderful can happen. 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Lets give this guy gig really . And these kids, and these guys, him, ah. Oh hello. That lady, these houses yes, yes and yes. And dont forget about them. Uh huh, sure. Still yes xfinity delivers gig speed to more homes than anyone. Now you can get it, too. Welcome to the party. Welcome back to the closing bell. We are higher again now by 33, 34 points or so, up about 13 basis points on the dow. Weve been up and down along that flat line in the last half an hour quite a few times. Were well off the lows of the day, which were 500 points lower at around about 1 30, 2 00 p. M weve improved but were still volatile around that flat line and speaking of volatile, the vix was over 40 earlier today. Its still under 35 right now. Le and hedge funds notably underperformed the market during the big runup in stocks over the last couple of years but could this renewed volatility be just what the doctor ordered leslie picker joins us with more. For most hedge funds, this is the perfect medicine for others, it can be a death sentence lets start with whos benefiting from the last week. So, whenever the market sells off and volatility spikes, short, biased funds and long, biased volatility funds should benef benefit. Short biased equity funds should benefit. Same is true with Higher Turnover fixed Income Strategies which tend to do better when volatility increases because they found those forced sellers where they can really buy securities on the cheap. Now, some hedge funds made come out from even all of this, specifically long short equity new data out from Credit Suisse showing popular longs declined about 7. 2 and shorts rose about 7. 1 its likely that these strategies are trading about flat monthtoday. This indicates the selloff in equities is more index based than hedge fund selling individual names now, the populars are most severe in shops that were short volatility one analyst described this to me as being akin to picking up dimes in front of a steamroller. Eventually you get crushed now, a Hedge Fund Called ljm partners employed that same strategy and had to send a memo to clients on tuesday saying they suffered significant losses its mutual fund collapsed by more than 80 in two days. And its unclear at this time what their future is, but its likely that theyre not the only ones suffering here, guys. Leslie, a more broad question in terms of that debate between active and passive management. I guess the fact the selloff has been so indiscriminate still isnt playing into ak active managers hands yet. It depends. If you dont look at the exposure, youll be down if you hadnt moved into a long equity manager flat its better not to lose money than to be down. That would be the hedge fund argument anyway. A lot of hedge funds are coming out and saying, yeah, this is why you need us. Its for moments like these. I think we just had a great january for hedge funds, too, actually well see if they keep it up leslie, thank you. You know who else this is good for, you always criticize me when i bring up the banks, but high vol, should be good for them. Steve foles was on the show yesterday and we asked him about that nobody wants the headline to be, im doing great, everybody good luck to you. To go back to 2009 was the year Goldman Sachs managed to deliver high profits. They were very popular back then 40 minutes to go dows up about 47 points small gains across the board here as you can see for all the other major averages. 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Welcome back the dow up 70 points at this hour lets sfler in on the weeks biggest mover. Exxon, 3m, travelers and cocacola some of the worst. Exxonmobil is down more than 12 , thats a 60 billion drop in market value since last thursday the id say the oil price hadnt fallen as much near as much as the likes of exxon and chevron until today and it crossed below 60 and around 59. Oil prices down about 9 for the week as well with a big fall today. The s p 500 crossed below its 200day moving average earlier today. Joining us to discuss more about the indexs voluntarily style move is todd gordon, founding of tradinganalysis. Com. Thank you for joining us before we get to your significant charts, is is it significant we fell below the 200day moving average when we fell below it, we bounced quite quickly as opposed to selling off more, as some people expected. I think its significant we held the 200day moving average but i think its more significant we broke uptrend support. I like to find the beautiful rally weve seen since 2016, unfortunately thats been broken it looks like in this shortcovering rally well come back and retest the resistance yes, its nice but i dont think were out of the woods yet. Lets get to your chart on the s p and talk us through it in terms of the key levels from here. Absolutely. What were looking at here is this is the monthly chart. This will define the qe era rally. You can see were still well contained in the subtrend channel. If we start to continue to break down through that 200day, the area that is going to really challenge this bull trend thats been in play for eight years is about 2300 so, we do have more room to go to the downside if overhead resistance we just formed holds. Unfortunately, we might be down to test that area. If we break below there, thats going to be a problem. Todd, talk to us about yields as well. Clearly, people factoring in yields is one of the sparks for this selloff. Absolutely. The bond charted, the 30year bonds also, which i think is a major catalyst for this volatility has brokena 38year uptrend were seeing a fourdecade rally in bonds, selloff in yields that is selling off ive asked the smartest minds here in cnbc, why are bonds selling off . Foreign banks selling . Are we selling reflationary outlook we dont know. Its bringing a lot of volatility if you can zoom the camera, you can see weve lost this beautiful uptrend support that goes back to 1982 if this continues to go, the pace of increase in Interest Rates is going to continue to drive this volatility. I think this is the most significant chart we have in the market todd, thank you very much for that of course, bond prices selling off, yields rising higher. A key factor weve been discussing the last couple of weeks. Still ahead, if history is any guide, it might not be tomorrow or the next day it could take months for the market to gain back what we just lost well take a look at some of the past drops and recovers and see how that could impact your Investment Decisions ut the prico give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. [ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Talk to one today and see why were bullish on the future. Directv has been rated 1 in Customer Satisfaction over cable for 17 years running. But some people still like cable. Just like some people like banging their head on a low ceiling. Drinking spoiled milk. Camping in poison ivy. Getting a papercut. And having their arm trapped in a vending machine. 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Utilizing pg es talent and expertise in that area trains our firefighters on the gas or electric aspect of a fire and when we have an emergency situation we are going to be much more skilled and prepared to mitigate that emergency for all concerned. The things we do every single day that puts ourselves in harms way, and to have a partner that is so skilled at what they do is indispensable, and i couldnt ask for a better partner. Welcome back just over half an hour left. Dow trying to hold onto gains. About half percent gains in major averages tesla going the other way again, dropping 2 and trading lower for the week by just about 10 the electric car company on pace for its worst week since july. Down 10 from its intraday alltime high it hit in september. Lets sent it over to meg. Were looking at express scripts and cvs health theyre lower on white House Counsel economic adviser drug pricing paper that came out and in part takes shots at that concentration saying it contributes to rising drug costs. Express scripts down 2. 5 . They take issue saying they dont rise drug prices they say its the opposite its a continuing argument. Its an overdue move. I dont know what analysts are saying about it but there seems to be pullback against an obvious thing to do. The questions are about how will they go about lowering drug costs . This focuses on drug prices in the u. S. Versus the rest of the world. Its fascinating to see how theyre treating this as a trade issue. Its something trump talks about a lot. This will play out over time but very interesting to read yeah, meg, thank you very much lets get to our Closing Bell Exchange and talk about these markets. James swanson, chief investment strategist from mfs investment strategist, keith bliss, Senior Vice President from catone and rick san stelly checking in from the cme in chicago keith, were up 101 now. Whats all the trading action telling you. Sloppy market, directionless, people are looking for a bid, a way to go. We have the markets vastly oversold we hit some oversold readings last week before we got to this real washout we witnessed this week i would say, listen, all the data i look at on a quantitative and technical level tells me we should be trading higher here. Theres a few problems that were facing today number one is that this selloff happened so quickly and so viciously, its the most profound correction in the postwar era, moving down 10 in just a few days as opposed to a few weeks. Thats scared a lot of people. Theyve taken a step back. Retail and institutional and gotten out of the market for a little bit and the second thing were really dealing with is a friday. Who wants to go home long after a week like this and subject yourself to possible headline risks, even though thats kind of waned in the last few months. You never know at this point in time whats interesting, even though the equity indexes are having a tough time finding direction here, is that the vix has barely moved. Maybe just a couple of cents that tells me theres still some fear in the market people are still guarded and it may take a few days for us to turn around and come back and work out these oversold conditions rick, the dollar is going to be higher this week, as it was last week. More pronounced this week as well, over a percent does that tell you the fundamentals of the u. S. Economy remain strong and we havent got anything too concerning to worry about other than valuations and momentum corrections in the equity market . Well, weve had plenty of strong fundamentals. Weve had a weak dollar for all of last year and most of this year you do have a point because if you look at where the dollar index is trading, lets say around 90. 50, the exact midpoint of the high close and low close for 2018 comes in around 90. 60 thats a level to watch. In terms of it doing a lot better, we could oversimplify. If you look at minus 50 basis points on a twoyear note yield in the eu, if they have 1. 5 to 2 inflation, they have real rate there to help their currency not the same for ours. When we look at the equity markets when i was inthe business you would have discretionary selling to do, you would wait for the bid to come back, hit it you wouldnt dump everything at once it seems to me like the derivative adjustment based on volatility rising is still under way just by the way the equity is trading quite simply on treasuries heres Something Interesting the twoyear closed down nine basis points on the week or it would if it closed here the fiveyear down nine basis points tens, minus two. 30s, up four we all talk about supply, but truly most of the new supply, a lot is in short maturities i think thats not reflected in those numbers. What i think is reflected, even though many people say it isnt true, is somehow the market is still hoping the fed saves the day. And if they believe inflations picking up, theyre not going to save the day the march meetings going to be super exciting james, do you guys have a view on whether this recent upset has been caused by maybe people thinking higher inflation or is it higher growth, which would maybe be a more favorable thing or Something Else entirely the growth is intact. I think this market reacted to two things wages were starting to move up in the United States were seeing several indications of that. And that begins to threaten earnings at the same time it gives you an alternative to stocks. I think thats what triggered it the shock and awe of this market was a year and a half, two years of complacent calm, upward moving markets long position in copper, long position in oil, long positioning in Growth Stocks very low cash positions. This is what we call an overextended market but the question investors need to ask, is this the signal of onset of coming recession and i would say, no. The credit spread markets have reacted but not violently and the des perispersion of value o is not wide. Normally those two things precede the onset of the cycle the fundamentals are still strong james, if you are looking, though, for protection, what exactly are you suggesting people buy gold prices, for example, in fact down this week, even though volatility has picked up and sold off is that an opportunity to pick up protection relatively cheaply at the moment . I dont think so. I think that youre getting into Asset Classes when you think about gold as really defensive when things blow up. We dont see that happening. Again, i think the fundamentals underneath the u. S. Have been given a boost by the tax cuts. But also remember, the bottom 80 of earners in the u. S. Are now seeing yearoveryear real increases. When you have strong fundamentals, i think you look at getting back into the equity market not today but gradually over the next couple of months and keep your eye on Free Cash Flow Free Cash Flow underpinned this quhoel cycle and the question is, where is is it going now right now its in good shape. Keith, what are you watching . Last friday, we closed at the lows and we talk about never bottoming on a friday. Whats important for you as we close up shop here and start to head into the weekend . Whats important is watching the russell 2000 a total reflection of the u. S. Economy. Nothing fundamentally has changed last week to this week other than the fact people got scared about that wage last friday russell is key we crossed through the longer term trend line, which is troubling. Were bouncing on the 200day average. If we can close positive or at least flat and get gains in the next few sessions, i think well work off the oversold conditions and move back to moving higher. Have a good weekend 25 minutes to go dows up 108 right now small about half percent gains for the major averages. Dow on pace for its worst week since october 2008. Up next, well speak to two Money Managers about what theyre tellinthg eir clients to do closing bell will be right back lets build a better world for investing. Lets hold ourselves to the highest standards of ethics. As Investment Management professionals, lets measure up. Cfa institute. Notheyre not investing iney commoditiesies. Or fixed income. What people are really putting their money into is what they hope to get out of life. But helping them get there requires a real refusal to settle for average. Because when you approach investing with a tireless desire to beat the status quo, Something Wonderful can happen. Those people might just get what they wanted out of life. Or maybe even more. At ally, we offer low rates on home loans. But if thats not enough, we offer our price match guarantee too. And if thats not enough. We should move. Our home team will help you every step of the way. Still not enough . Its smaller than id like. Well help you finance your dream home. Its perfect. Oh, was this built on an ancient Burial Ground . Okay. Then well have her cleanse your house of evil spirits. Well do anything, spiritual chatter seriously anything to help you get your home. Ally. Do it right. To help you get your home. Transparency. Expertise. These are the Building Blocks enduring relationships are built on. As Investment Management professionals, lets measure up. Cfa institute. Welcome back 20 minutes to go dow a moment ago up 220 points at the highs of the session, we were up 349. At the lows, we were down 500 and that was just two hours ago. Still some fluctuation here. Its largely been moving to the upside in the last hour or so. Theres the s p, nasdaq, same deal here are some of the components of that nasdaq in particular the tech stocks, facebook up 2 . Alphabet up 3 microsoft up 3 . Its amazon, the odd one out, with a decline of 1. 5 even if we close at these levels, up almost a percent, were still down 5. 5 for the week. Still makes it one of the worst in years despite volatility at extreme levels, vix was at 40 again today. Everyone is saying, dont panic but what should investors be doing . Joining, kyle brownly and jamie desmond. Good afternoon be to you both. Jamie, ill start with you, if i may. In terms of whether this is a broader buying opportunities, youre telling your clients to be doing that, and if so, which areas in particular . Well, earlier in the week we put out a piece, is this a brush fire or a forest fire . Not to know what to expect for the week, we still believe the fundamentals behind our piece is that the economy and market are strong, so we think this is a brush fire certainly an student for thoopp those investors with the risk. Exxon down 6 tesla down 10 what do you guys see here as good recommendations for people to buy well, were really focused in the large cap growth space thats been the predominant winner over the last year or two and some of the big, large tech names really carry that space. No reason to shy away from those now. Were seeing an Opportunity International where we havent been as favorable to go abroad weve been more focused on the u. S. As of recent. Kyle, your own view on those topics, is this an opportunity to buy if so, which sectors in the u. S. Thank you i absolutely think it is we have a check back to middecember values and fundamentals were really bullish on defense contractors and on Consumer Staples and Building Materials at this point. Its interesting you mention defense and Consumer Staples because those have been such highly valued parts of the market do you feel comfortable getting into those even after this little selloff you know, i really do i think with the administration and the white house and with the commitment, we saw a big contract at lockheed close last week, another one on the table this week, i think its an opportunity to buy at a pretty Good Discount window and certainly bullish on that part of the economy. Earnings continue to be strong, the economy continues to be strong. Is there a concern in the short term that we go back to that indiscriminate level of selling . You can be confident to go and move now yeah, i do think so i mean, if we im sorry, go ahead. Jamie, continue thats okay i think what we saw the high level of activity and the quick level of volatility was more driven by technical and algorithmic trading. I think some of these end of the day runs weve seen, we might see Retail Investors to come in but for the average investor, this is an opportunity, if theyve been sitting on the sideline, its time to get back in the game. Kyle, anywhere else you think looks attractive right now yeah, we really like an unusual stock called wpx energy. Its a small oil and gad company. They have done a great job of reducing their debt margins. Theyve also recently sold a large position in the San Juan Basin and reinvested that in the Delaware Basin i think it will be a stock youll be glad to own in 18 months. You mentioned you Like International stocks as we stand with the s p up now 1. 25 , down just over 5 for the week in the u. S. Hong kong, japan were down about 9 each. So, is that an area that, in fact, u. S. Investors should be looking at as well because the selloffs been even more pronounced. I think they have been pronounced but they havent had the run weve had. Not just looking at this week as a segment but the market overall. International provides an opportunity because they still have lower evaluations compared to historical averages i would say the u. S. Is expensive and theres an opportunity to take some chances overseas. What are you telling people about Interest Rates when theyre asking should they be spooked if theyre going higher Interest Rates are generally a good thing that means the economy is growing, were getting a little inflation. And so usually bonds move against stocks what were seeing, whats unusual this week is seeing them both down at the same time certainly investors are pooked but we think that for those that need yields, its a good thing for rates to be higher. Kyle, talk to me about Energy Stocks and oil prices. Oil has broken down, below 60, almost below 59 its 59. 07 on wti is that a concern that that sector might fall much further i would see a further correction in energy i think youve got to be very careful on the companies you select from a fundamental standpoint but ultimately a year from today, i suspect well be bullish on energy. You being you or you being the world . I think me being me, but i would bet on me that energy bullish from 12 months out is probably a good call all right well, people are counting on filling up a little more cheaply. Well see. Jamie desmond, kyle brownlee, thanks for joining us today. Were headed back up towards session highs. Were up 315 on the dow, i think 349 was the peak of trading earlier today before we sold off big time. We were down as much as 500 another massive set of intraday moves. Up next, well check the index etfs and how theyve been trading. Back in a couple minutes ones that make it fast and easy to analyze and take action . 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The global Investment Management businesses of prudential. Welcome back to the closing bell. A big rally in the last ten minutes or so. Were higher by 440 points at the highs of the day for the dow. Kelly, when we came on set, only one stock was lower, that was nike sorry, was higher. Now only three are lower procter gamble, walmart and united technologies. Nike is up 5. 2 . Massive swing. The lows of the day down 500 points now up 440. About 11 minutes to go. Heres a quick check on how the index etfs are trading today lets look at winners and losers the dia is the one tracking the dow. Some of the biggest gainers were amex and nike. Losers, merck and walmart. In the qqqs tracking the nasdaq, nvidia, strong earnings, up 7 dollar tree having a nice session as well. Expedia, after its disappointing results, down about 16 . Whole logic, also lower. The s p 500, nvidia is leading the way there, along with mattel expedia and chesapeake lagging in the s p today we have only got one sector of the s p in the red and that is energy. All the other sectors in the green for today. At coming into to today, all the sectors were lower for the week. Amazon is reportedly launching a new service, which could put some pressure on fedex and u. P. S. Cnbcs Morgan Brennan is here with more. So, this is according to the wall street journal. Amazons longrumored Delivery Service will initially roll out in los angeles a first step toward allowing amazons thirdparty sellers to ship via amazon directly and be a service offered to other companies as well. So, in response to this, amazon saying, quote, were always experiment for customers according to a source, the program is still in the planning stages, at least several months out. That said, u. P. S. And fedex shares falling today after this report even as i Industry Experts remain very skeptical on this. As for the companies, u. P. S. Saying it continues to support amazon and many other customers and it doesnt make comments about their Business Strategies or decisionsregarding their utilization of u. P. S. Services but fedex really did not mince words. They said the headline in todays wall street journal demonstrates a lack of basic understanding of the full scale of the Global Transportation industry fedex says no single customer makes up more than 3 of revenue for u. P. S. Its no more than 10 . And i think, guys, thats the point here amazon is building out its own network. It has trucks, trailers, expected to have 40 planes by years end fedex has more than 650 planes. U. P. S. , 581 planes both of these companies are putting billions of dollars every year toward expanding their network. It would take billions for amazon and a lot of time for them to have a network that is really, truly on scale the bigger point is bigger trends, that ecommerce continues to grow at a rate thats faster than all of these delivery networks, including amazons can handle. Dont move. Youre a good luck charm for the market dow is up 512 points thats a 1,000point swing from the lows art cashin stopped by a moment ago. Mentioned we have 1. 7 billion to buy on the bell. That could be part of why weve suddenly seen liftoff. Even transports are higher now. Theyve been the underperformer all day. You were just talking about meaning the pressure on fedex and the others now even seeing that come off the bubble a little bit, transports are up about 50. Fantastic rally as we approach the close just about eight minutes to go well be coming back with the closing countdown. After the bell, well take a look at the good, bad and ugly of the week. Put those numbers in historical and financial context. 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Wake up early, o. Slap on some cologne im 85 and i wanna go home just got a job as a lifeguard in savannah im 85 and i wanna go home dropping sick beats, they call me dj nana 85 and i wanna go dont get mad. Get e trade, kiddo. Welcome back to the closing bell. Four minutes to go to the bell extraordinary rally in the last half an hour or so it did get us up 500 points at one point. Were up 400 points, just off that level either way, the low of the day, as you can see from this intraday chart which came at 1 40 p. M. , we were down as much as 500 points. Its been a great afternoon rally. As bob pisani said, its come with more volume, which is rare on a friday point. Were off the high of 500 points higher we saw five or ten minutes ago. Lets have a look at weak charts because thats part of the story as well. Despite those gains that we see as we approach the close, now up about 1. 7 if we look at the s p chart, were down 4. 5, 5 for the week. The gains in the last trading session of the week, particularly in the last hour are still, of course, in perspective of whats been a dire week. It comes off a week last week when we lost 4 . Of course, were still down significantly. A quick look at the tenyear treasury yield for the week as well were at about 2. 85 in the midrange of where weve been for the week. Were just off a little at the moment of 2. 85, still elevated from where we were a week ago. Bob is joining me as we join bob, the dollar as we transition as because the dollar has moved higher this week two weeks in a row equities showing the most volatility. You brought up a great point. Youll notice the intraday moves on the tenyear have not been a major factor theres been a flight to quality there. We cant go complaining, oh, were at 3 on the tenyear. Thats been a flight to quality. Were searching for a bottom extraordinary intraday moves in volume and volatility. I was very encouraged today because for the first time this week we saw some significant up volume we saw some buying interest. All this week. The rallies have been feeble and based on light volume. Buyers were not enthusiasm we move down, the volume picked up the sellers were very enthusiastic toid today in the middle of the day, we dont know why, but the selling pressure dried up and buying pressure went up on heavy volume. Is it significant that its coming late on a friday. We just heard from keith bliss, who wants to be long the weekend . People clearly want to be long the market. That tells you, dont necessarily believe in old chestnuts. We had a year last year when all the old chestnuts were wrong here you had such an extraordinary selloff, such extraordinary volatility that i think the idea of whether youre not long or short over a weekend doesnt mean a lot at this point. Somebody, number one, selling seems to be exhausted. Number two, buyers seem to have noticed that and jumped in in an extraordinary week. One thing that isnt seeming to rally late in this friday session is oil prices. We talked about the worst performing sector on the s p has been energy. Exxon, chevron down about 10 , 12 . Oil prices, if we bring them up, clearly suffering. Is that a bearish signal for the economy . No. Overall the Dollar Strength has been an issue for oil and oil has topped out in the last several days couple of weeks its 65, 66. I think thats Dollar Strength and a little concern about the overall global supply. I dont think its a big issue we havent even focused much on fundamentals i think its a modest concern about higher inflation rates and i think inflation risk is higher than it was a week ago particularly with this deal we had on the budget and i think there are some concerns about deficit spending associated with that. Talk to me quickly about the fact that we did dip below th 200day moving average we will rallied off that, though is that significant . Last time we approached that was the brexit vote, in fact. When was that oh, that was a while ago. Did you cover that you dont know anything about that so, the important thing is when you dont know where youre going, those are convenient signposts to use the numbers were so extraordinary this week that they blew through the 50day so quickly that there was no resistance at all. I think what we have to try to figure out is the deleveraging thats been going on all week, is it finally over the people betting volatility would remain low and the stock market would keep getting up, would have to reverse that bet thats deleveraging. Whether its margin calls, whether youre going out and selling puts more, whatever youre doing, they tried to reverse it this week. As we round things off, were looking at 1. 3 gain at the close. Encourage finish, ringing the bell at the new york stock exchange, the Westminster Kennel Club thats it for a crazy week of trading. The second hour of the closing bell starts now with kelly. Welcome to the closing bell. Im kelly evans. Closing out a wild week on wall street were finishishing with the dow up 340 points. Down more than 500 at one point, and up more than 500 a few minutes ago. A gain of 1. 4 for the dow same for the s p 500, adding 38. The dows level is still over 24,000 24,194 on the close there. How about the nasdaq similar increase 1. 4 , up to 6874 russell 2000s lagging a bit but still in there 14 points to 1477 dom chu is here to wrap it up for us. I dont want to be cliche and call it a roller coaster but the way im going to describe it seems like it. As we started off last week, the friday close last time around, a week ago, we were down 660 points on that day we didnt end friday last time around very well we exacerbated things going down nearly 1600 points at the lows on monday only to rally back and close only down around 1100, 1200 points. At that point tuesday, we fell again. Down 567 at the open only to rally up by double that amount to actually close up 56790s day. Then all of a sudden we had a pause. A 19point day overall on the Dow Jones Industrial average flat on wednesday. Only to go down 1,000 points on thursday and lets pull up the intraday chart. At one point you heard wilfred say we had 1,000 points, pedometer for the markets gyrations over the course of the market melee if you add in the other moves today, up and down, all over the place, towards the end were talking about a day we did see not the big intraday reversal. By the time its said and done, were settling out i have to crunch the formal numbers but we will have walked, if you will, around 22,000 points by our counts here by the time this crazy, wild ride has been done for the dow. Back over to you guys. I want credit for it. Dom, thank you very much tenyear yield, by the way, 2. 85 . Weve seen some a little pressure come in higher yields have been fingered as one of the reasons weve had this extraordinary volatility this week. Bob pisani has more from the nyse. Im very encouraged by the action were searching for the bottom and searching for buyer interest, which we havent seen in quite a while all this week, see those circles, when we have seen moves to the downside, sellers were enthusiastic look at that one just before 2 00 p. M that circle there. For the first time we saw buyer interest we started seeing volume on the upside around 2 15, dramatic volume, and buyer interest was up. Dow movers were going for the cyclicals. The boeing and caterpillar did very well. United health, big price stock, also did well. What didnt do well is your consumer names generally your p gs, cocacola, were underperforming the market. I mentioned this searching for the bottom since friday a week ago, no letup in the intraday volume or volatility weve seen these sudden volume surges on nothing. This is the deleveraging process. People betting volatility would remain low, stocks would keep going up they reverse their positions they had to go long volatility lets see how we start on monday but a good sign. For the week, dom went through a lot of the movements s p 500 was high on monday, 2766, believe it or not. The low was today, 2532. We moved in a stunning range s p is ten times the dow we dont move ten times the dow, 230 points, in ages sometimes. And we moved the s p 500 this is going to go down in the history books and be part of my personal memoirs back to you. Our bob pisani. Lets move to the nasdaq with bertha coombs. You stole my line on bobs memoirs. The chip stocks have been what ive been watching all week. Today it looked like they were on pace for one of the worst weeks in an awful long time. We saw that big recovery here at the end of the week. And thats really helped us this afternoon. Still in correction. The nasdaq is just out of correction in fact, the nasdaq break even with this brig recovery. Had been down to a new low for the year had given back about two months of gains we recovered quite a lot in the big surge we saw at the end of the day. The interesting thing is the nasdaq is down two weeks in a row, despite we have apple, the biggest mover, the biggest component. Down now for a Third Straight week apple has given back about four months worth of gains. Apple is where the breakdown has happened technically its broken that uptrend and taken a lot of the big caps with it the f. A. N. G. Names that helped move things to the upside are in correction, finishing off here, at amazons Still Holding onto gains for a year though it finished down on the day. Holding up, ironically, are some chip stocks that have been under a lot of pressure. Nvidia moving much higher today after those strong earnings, and qualcomm those are among the 20 of stocks in the nasdaq 100 that are below still less than 10 below the alltime highs the nasdaq 100 closing up the week fractionally higher for the year wow turns out today made a big difference on that bertha, thank you. Bertha coombs. Joining us cnbc Senior Market commentator Michael Santoli and david katz from matrix asset advisers eager to talk about what played out this week. Topping the dow this week relatively speaking was dow Dupont Exxonmobil the biggest laggard with a 10 drop this week. Trip adviser led the week but global cboe dropped 10 . Thats a big drop. It goes back to how much were the volatility products in the middle of this and are people going to lighten up on them now. Its unclear how much was in the middle of it its clear it was very much in the middle of traders minds whether it was true it was really the driver, people were concerned about that kind of forced activity. I think a lot of the ingredients you look for when youre trying to match up the Market Action to the textbook bottoming action were met today you did see this spike in the vix. It came down off its highs. We went back up to 40 but you want to see it surge and creates a spike on the chart. Thats one ingredient. The intensity of the selling book yesterday afternoon and in the middle of the day today was, i think, the kind of could call climactic. You also did have this report making the rounds. Jpmorgan. They were saying that forced selling activity from the Commodity Trading advisers, leveraged hedge funds, other types of systematic traders looked like it was just about done im pretty persuaded that had a role in peoples buyness buying into the close. This is a weekly note, talking about the risk parity funds. If you have equities, bonds going down, thats a terrible recipe everything was going right and all of a sudden everything was going wrong. Sthat enough for them to say, we have to dramatically reposition ourselves. It took us a week to do that and now its done . Thats kind of how it is. Its like, lets bring our exposures down that wasnt the whole story. This has been a reset of the market in terms of sentiment from extremely extended levels in january even if this was the low in the last couple of days, it doesnt mean were back to the meltup market its still 10 in the s p to get to the old highs down 5 in a week. This is not a stable tape just yet but encouraging what happened today. If were not going back to that meltup territory, is that actually the healthiest development thisle market could have given you well, you know, i dont think were done with this yet, kelly. I think we have more of a bump on the downside. Theres some key factors it going on right now that we need to keep in our minds number one, were moving from a monetarydriven economy to a fiscal thats a bumpy road. The market is aid forwardlooking beast. Its incorporating that into this whole concept were also seeing higher inflation. Its creeping up a little bit. We also have seen unemployment develop tremendously over the last 45 years. So, thats also going to, you know, put us on the side of potentially some wage growth and were already starting to see that weve got all these factors kicking in and i think its going to take a few weeks, a couple months for things to settle in. Im very positive on the year. Thats exactly what i wanted to hear. Fine, we have some choppinessi the markets. Find some professionals and some strategies arent having a great week broadly speaking again, theres all the reason why we should have been worried about how fast we were moving higher in the market earlier this year. No one wants a stock market bubble we dont want a bubble going up. We dont want to deal with what happens after that thats why im asking if, in part, you think this could be a healthy correction. It is a healthy correction. A lot of clients are asking us currently right now is it time to buy we are very concerned we were going straight up. Its Healthy People are having a sigh a sigh of relief a little bit but i think we have more downside well see before things settle in. By the way, how long of a correction are we talking . David katz, what do you think, Peter Oppenheimer said no. Average bull correction is 13 over four months and it takes four months to recover david, if we had 13 in a week, does that mean we only need a week to recover . Generally, the quicker the correction if theyre not economicbased, the quicker the recovery we think at least twothirds of the correction is over we would be buying into this weakness a day like today when the markets off pretty sharply by midday, wed be aggressively buying into that in a day you might look stupid, or a week or a month, but a month from now we think the stocks will be higher. We dont think its going to take six, eight months we think you could be moving in a better direction one to three months out. You cant be afraid to looking stupid first they ignore you, then they laugh at you, then you win. I dont know if gandhi was a trader, but maybe it applies here as well he might have had a good discipline for it. Exactly to davids point, if this was the kind of a jolt, a volatility shock we got in the late 90s, those were the type of sharp corrections we got not associated with a recession. Yes, you did recover quickly i cant say youd want to lay a lot of money, thats exactly what were going to do because of how extended we were, but everything seems to be compressed down 5 in the week and walking out here thinking its a win who knows if that can be turned upside down on monday. Are you surprised david, go ahead with this correction, with the earnings growing nicely, the market is down to 16. 5 times earning. In a low Interest Rate, low inflation environment, thats reasonable we think that sets the tones for better times earnings are doing well. And outlooks are positive. All is not lost. When you salo inflation, low Interest Rate environment, thats being debated we felt Interest Rates would be moving up 2. 8 , 3 is still very low based on longterm trends. We dont think that rerails the market we think inflation is drifting higher in certain respects thats okay but we dont think youll see a spike in inflation. We know the cpi, Consumer Price index, information Tuesday Morning will be important. Anything that tells us you could even look at the markets, you know, the breakevens to see what they think is happening it matters if its on inflation, its not so good. If its all growthy, thats a little better. All those things are going to matter because this whole process is about what is the market going to pay for fundamentals everyone already says theyre pretty good. We priced in a lot of good in january. Its not so much about, is is it bad . Its exactly what valuation you put on this level of earnings. Tax cuts working through the earnings forecast. Thats probably a given. In six or eight months well be looking at 2019 earnings that have to go up against those tough comparisons. The market isnt going to let you skate on tax cut effects indefinitely. Fair enough renee, to the point about where rates are going, what kind of strategies does that have you thinking, if they dont go down from here, does that change the mix of what youre telling people to invest in . This is where it is right now. Low inflation, low Interest Rates. The feds have already said, were looking for three to four hikes this year. Im positioning clients right now into investments or sectors that do well in this forthcoming environment. Commodity, were definitely taking a position in that. Financials, industrials and in fixed income we like to be in floating rate bonds. They will adjust as rates are moving up. It helps to preserve the capital and you also get the benefit of higher Interest Rates and higher income i think this is an inflexion point. Were going to look at this six to eight months down the road and say, yeah, commodities have moven up and we want to be in that first seat. David, do your recommendations have some of the same mix in there or are they different . We do like financials we do like industrials we like things that are less Interest Rate sensitive. We think health care is a better place to be. We like certain areas of technology is that the big cap look, youre getting what do we say about apple at a fourmonth low . Were actually pretty comfortable with apple we like microsoft, qualcomm, fighting off a takeover bid, we like cisco some less glamorous tech names theyre still a little glamorous themselves thank you for joining us today. Thank you david katz and renee talking about strategies in this market. A lot more ahead as we close out the week here on the closing bell. Stay with us a ton of options activity just poured into an activity where every american is invested see how low the options traders think this crucial part of the market is about to fall. Plus, another key part of the market that often serves as a canary in the coal mine keeps falling. Is that a sign todays comeback is a head fake and not a real move higher . And amazons shipping news weighing on fedex and u. P. S. How do you play it this is the closing bell with d keanlin s anmi sto o cnbc lets build a better world for investing. Lets create jobs, build bridges, insure prosperity. As Investment Management professionals, lets measure up. Cfa institute. Thwho hold themselveshe to a higher standard. They are called cfa charterholders. Demand the best. Demand a cfa charterholder. Cfa institute. Welcome back with Global Markets losing more than 5 trillion in market cap since january peak, investors are on the hunt for bargains joining us is mark from penn mutual asset and carrie firestone. Welcome to you both. Mark, as you take stock i mentioned a moment ago apple being at fourmonth lows is one example. Exxon was down 12 this week you can take your pick are you taking your picks . What are they after the week weve had . To me if a big fear in the markets is a return of inflation and higher Interest Rates, to me the fact that a lot of equity sectors have correlated closely in this selloff. To me, banks and financials, which are set to benefit from higher Interest Rates, higher inflation is what i would be focused on the equity side. Thats so its controversial whether you know, mark, some people tell you, well, they benefit from the twoyear or not the longer end well, they get hurt if rates go up too much. Youre confident just saying that broadly speaking, youre going with banks and financials . I think that is a relatively safe haven i think if were transitioning from investors deflation to now being inflation, again, we think thats generally favorable for banks and financials on the fixed income side, we would favor intermediate duration tips. Again, these assets correlate directly with higher inflation, so we think theyre a good place to be in the world of fixed income. Whats enter media, like three years, five years . Three to tenyear duration. All right what about you, what do you think is attractive after everythings happened . I dont think you can point to any single sector and say, this is what we would buy because its gone down the most. Theyve all gone down a similar amount this market has been ruthless. There are names we own already and were pretty invested already but were adding to names such as alphabet, google, its down 15 . Apple has had a tough run. Those companies have not changed anything about their model if you like apples 200 billion a few weeks ago, right now if Interest Rates are a little higher, you get more income, they can buy more of their own shares if they choose to make an acquisition, they can do more with it. We like amt, cell phone tower company, extremely strong business globally. Zoetis, Veterinary Health care company. Boston scientific we like here good guidance. On the financial side, schwab. There was an overreaction. Its not as if no ones going to trade stocks anymore we like that one here. That list, those stocks that you like and have held for a while, suggest that your orientation is toward big, organic growth winners is that take call on how you think the market is going to proceed from here or is that really a stylistic thing and you like to focus in those areas well, in part, im telling you the bigger names because i think the audience at cnbc likes those names more we own some smaller names, too but those but what about the cyclical versus organic growth type question correct thats a good question i would say our bias right now is growth because the economy is growing and these names continue to produce the good numbers. The market, as youknow, in the last few months has really favored the dow stocks so, there has been a component to the market that was quite lick li cyclical, caterpillar, boeing, 3m, names over time they need cyclicality, they need growth. Were less impressed with whats happened to those stocks recently to say theyre attractive circling back to what we were talking about with mark, what do you think is going to happen with Interest Rates . Is that something you even want or need to take a view on . I think its important because the correlation between stocks and Interest Rates are strong you know, the higher Interest Rate goes, theres competition for stocks lower Interest Rates, easier to borrow and better for multiples. I think at this level, 2. 8 , its just not that high. And the borrowing demand is not that great either. Theres so much cash out there companies have a lot of cash theres sovereign wealth funds with tons of cash. Theres liquidity all around the world. Its hard for us to see where the push above 2. Or 3. 3 is going to come from mark, last word to you. I think in a regime where we see Interest Rates rising modestly, we think it makes sense to invest in floating rate assets that will benefit from fed rate hikes we expect three rate hikes even in the midst of this market volatility we think stay short on floating rate assets. Even though she was just saying she doesnt necessarily see this thing punching well above 3, do you think it will, then i think 3. 25 is about where we project tenyear yields to end the year we see a modest increase from where we stand today. All right well see. Some ideas either way. Guys, thank you both. Thank you up next, well discuss whether the stock market will continue to be weighed down by onose higher rates or if good ecomic news can help a rebound. When we come daniel jacob for every hour that youre idling in your car, youre sending about half a gallon of gasoline up in the air. 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But if thats not enough, our app helps monitor your spending too. And if thats not enough to help you save, we could start a carpool. Look at this traffic. Dont worry. Ok, if thats not enough well start a trainpool. Oh i have a meeting in five minutes. And if thats still not enough. I got it. Well just create a shortcut. Well do anything, seriously anything to help you save. Ally. Do it right. Talking 4th quarter . Yes. The markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. Welcome back it was still a wild day of market swings. Dow closed up 330. Rates are a big part of all of this are they likely to go up the economy, how well is it doing . What lies ahead. Joining us now, larry kudlow, our cnbc senior contributor. Joe, chief economist at aris mus. Joe, let me start with you what do you think has changed in terms of what the market is thinking about inflation and growth right now youve got the end of easy money. Were ending one era and moving into another faster growth, rates are going to go up real Interest Rates are going to reset higher well test 3 very quickly and likely to end the year above that i think this is a natural outgrowth of longterm secular trends and we have yet to see the impact of a tax cut, which will start showing up in 60 to 90 days. Then well be talking about much faster rarity of growth. Greg, do you agree, this has been a significant inflexion point . Does it go back to the 2. 9 wage number and the jobs report last friday no, i dont think its an inflexion point. I agree the deflation period has largely dissipated look, you do not go from inflation being structurally too low to suddenly being a big problem overnight. Thats what the market seems to have thought the wage number is good news people are getting money to spend. We know from the last 25 years, that does not automatically translate into an inflation problem. I believe thats how the feds going to look at this. Yes,they do have more conviction around their current path on rates. But weve heard the chatter from fed officials this week. I dont hear anybody saying, yeah, we got to do four instead of three we have to go a lot faster in the long run i believe they believe the fed funds rate should be around 2. 25 and run that by me. This sounded like really good stuff coming from you. Youre basically saying more people working at higher wages, which they havent had in 20 years, will not cause inflation. In other words, the phillips curve is dead. I love this. I love this for you. When did you adopt this position because its so sound . I didnt say the phillips curve was dead i simply said it changed its address. Its dead dead. It means inflation doesnt appear until even lower levels of unemployment. Larry, you and i have talked about this the fed is not the tax cuts enemy. The fed wants to see higher sustained economic growth. They will let the data speak to them i think they have a deep level suspicion we have a serious inflation problem here that said, they do believe they need to move ahead of the news unemployment below 4 they think is probably unsustainable over the very long run but they dont believe the economy is building up a head of steam. I agree with that. Even as weve had this good news on fiscal front, theres going to be a tightening in financial conditions because bond yields have gone up and stock prices have gone down. That takes a little edge off the pressure for them to move faster on Interest Rates. Look, i want to go back to what joe said because weve talked about this for many, many weeks. Im a supporter of the tax cuts and so forth but better real growth, stronger real gdp, higher capital returns in the economy, people want higher, real returns in the investment markets this is a rate effect. If you look at the real tips people arent willing to accept real rates of return anymore. Thats correct. If they even got that financial Asset Classes have done pretty well. Look, since trump was elected, go there for stocks and everything else, real rates, the tips rate has gone up 65 basis points of which twothirds is real and onethird from the breakeven inflation expectation. So, look, i cant predict corrections and so forth i dont know if this is over or not. You knew there had to be an issue when real rates are rising and they didnt peak yet market rates go to 3. 5 . I think the real rates have to get to one percentage point or 3. 5, joe, real quickly that makes sense. Well run much higher annual operating deficits the natural Interest Rate has to move higher. I dont know if we talked enough about this, to be honest. I think they do i dont think so. I mean, were talking about look, growth is the antidote to budget deficits if we move it from 1. 9 to 3 or 4 , which i think is happening, thats going to chop the deficits down. Regardless of that, the deficit on Interest Rates is really low. I think one point thats being forgotten is key to the stock market, even if youre bullish on growth, even if you think your real rate picture hasnt changed that much, volatility was unnaturally low for a very long time partly because of the feds very careful pace of Interest Rates in forward guidance. The inflexi that ought to dictate lower stock market valuations going forward, even if youre still bullish on the economy i think thats an important takeaway from this week. But ill push back a little bit. John writing put out a paper after big spikes in volatility, markets go up. Every time in the past 30 years, whats happened in recent days, for example, whenever the correction is bottom is 30 years a big enough sample i dont know. Because they went down when the volatility went up. Thats right. And they bounced back. Particularly now because i think the economy is fundamentally sound and the outlooks for profits is solid. From current to future profits, thats gone up. Greg was saying he doesnt the fed thinks the rate might be 2 and 3 . I was actually saying the same thing larry was saying which is the discount rate has to go up because the world is riskier with a little volatility even if youre bullish on profits. Thats all im saying. Volatility has to keep increasing over the next couple of weeks because those trades arent unwound this morning on twitter i put up a Data Visualization this is going to take a bit of time to work through. Last word, larry. Youre at 75 basis points on the real tips. If my view is right, the supply side view of 3 to 4 growth for the next several years, that has to go higher it may go as high as 1. 5 to 2 percentage points. Market rates are going to follow suit that affects stocks. At some point theyll get equilibrium back i dont know when this correction ends. No one knows. Well book mark a new topic which is how much of this incremental growth will go to but the headline story here is but the headline story here is does he dessert the phillips curve . This is earthshattering information. Im proud of you. I did not abandon the phillips curve. Im just saying longer to deliver its messages. Thank you all, guys appreciate it. Something that wonky shouldnt have been that fun. Ads llelusheere fast money trerwi tl wth the transports are about to take off after the recent selloff welcome back we managed to finish this week positive it was still a broadly negative week, the worst in a couple week for major averages the dow is up 512 in the final hour of trade. It was a volatile session. 1. 5 gains for the major averages the nasdaq did eke into the green for the year with this close. What about the transports, down more than 5 this week they barely finished positive, i dont know weak on the no, they were down 23 on the bell. Just a slightly lower by a quarter of a percent 5 lower for the week and some traders worrying this could be a canary in the coal mine. This has fedex and u. P. S. Might face competition from amazon, looking to disrupt the sector with its own shipping offering, according to a report today in the wall street journal. What are the traders doing fast money participants david and steve. David, how important are the transports in terms of dow theory and all that . Im not a dow theorist, but theyre important for the overall market and i think theyre a buy. In particular id be loading up on the airlines. I love delta i love save, which is Spirit Airlines these companies, a lot of the companies that have reported in this space have already put up pretty solid Revenue Growth. You look at q1, its roughly midsingle Revenue Growth for companies that have reported, so i would say buy the dip on those. Buy the heck out of fedex. I think its a layup trade to be low on this amazon news. Super aggressive. What are you thinking, steve . If you look at the charts, theyve had some problems even before the market decided to sell off or have its risk parity flu session. I think they have a lot of headwinds, hurricanes they had to contend with, especially the airlines it remains to be seen how much of that business comes back online, how much of that caribbean travel comes back on line i would stay away from those, get back to the tech get back to the things that got you to the dance originally before the selloff took place. You think fedex, steve if its the best operator in the industry, and it really kind of tried to cast some doubt on whether this journal story with amazon was going to have any Material Impact, is this an opportunity . Its an opportunity because weve been talking about amazons impact on this part of the sector for a long, long time its going to take amazon a tremendous amount of spend in a tremendous amount of time. Were talking in terms of five to ten years to be able to catch up and have a serious impact, in my opinion, on earnings. Its all about the earnings outlook for them i dont think its nearterm Material Impact at all and i think thats why the story is inta intact. I agree with david on that. Its not a nearterm issue its a longer term issue but the problem with that is the market is a forwardlooking price mechanism machine. If they sniff out something thats going on with amazon, usually they shoot first, ask questions later. I dont think its going to be a Material Impact. I agree with david you could see some maybe headline weakness. Thats on top of the weakness weve already seen from the transports in a vacuum, i think that transports will probably most likely remain weak my two cents would be, i wonder what you think about this, if in fact we come out of this and the market as a whole recovers, i think you want to watch the transports to see what the character of this market is going to be. Did we just have a leadership change through this correction and maybe if the correction goes deeper, back towards more growthy market or can the market actually get a full comprehensive lift if transports arent there and, look, i cited the beginnings of q1 Revenue Growth for a lot of these players within the airline portion of the space. Look, ill tell you, its been solid. I think one thing you have to realize is is there has been a lot of positive expectations in general for the truckers, et cetera a lot of things were built in. In general, im bullish on the space. And i think you can see the airs, in particular, move higher at least over the near term. I think im sorry. Just to tie it up really quick i think if you see infrastructure plays coming down the pike, maybe that helps the whole industrial aspect of it and that, by proximate, helps the transports. You can toss to commercial, too, steve, if you want . I can what . You can toss to commercial, too, if you want. Right after this. Well be right back. Yeah. You can catch more of them at 5 00 p. M. Tonight beginning at in 17 minutes time. When we come back, the nasdaq was on its way to the worst in two years the latest rally skirted that level, possibly due to heavy options activity well take a look at what happened to that today ahead, well get a jump on s, c week with earnings from cboke, shake shack and much more stay with us whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley especially when inside another amazing machine. Your an amazing machine. The lexus es. With Standard Technology like lexus Safety System plus. The lexus es, and es hybrid. Experience amazing at your lexus dealer. [ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. When it might be time to buy or sell . With fidelitys realtime analytics, youll get clear, actionable alerts about potential Investment Opportunities in real time. Fidelity. Open an account today. Fidelity. I thyou never got the brakes looked at . L. Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. Snoou. If you were expecting after that of 666 point on friday to see a rebound this morning, you are going to be a little disappointed when you turn things on. Dow jones industrial average currently down just under 1600 points breaking news stocks around the globe dropping sharply once again i dont think this is puzzling at all. I mean, the market went up too far, too fast. People should be focused on the longterm investment america should focus on the stock market over the long term. I think the market has become a much more dangerous place. After the dows biggest oneday point drop in history, today the dow gaining back 569 on the bell. Buckle up, wall street. Looking to be in for another wild ride this morning futures pointing to a triple digit drop. The president tweeting about the market volatility. He said, in old days when good news is reported, stock market goes up. Dow is down by more than 600 points at this moment. Markets take the escalator up over the course of many years and the elevator down. Were down more than 1,000 points for the second time this week for the Dow Jones Industrial average. Stocks trying to find their footing again today. Everyone wondering the same thing, when will the correction end . The dow has traveled around 20,000 points this week. Closing out a wild week on wall street. Heres how were finishing up today with the dow up 334 points we were down more than 500 at one point, we were also up more than 500. As mentioned on that close, it looks like maybe the nasdaq turned back into positive territory for the year, which tells you a lot about how sharp the correction has been. Earlier on the halftime report, pete was talking about loading up on some qqq puts with options traders piling into the trade. Betting the etf that tracks the top 100 nasdaq stocks will fall. Some top holdings in this etf, apple, microsoft, amazon, facebook and alphabet. Joining us to discuss, cnbc contributor ed lee ed, its good to have you here because you can kind of remind us whats changed with these companies. Whats fundamental about these companies. Yeah. So, we were just told apple was at a fourmonth low, for example. Amazon going into this week was up 40 on the year so we just passed earning season for the big tech issues. I think apple had some disappointment, some softness in their iphone sales a lot was predicted. I thought a lot of that was priced into the market already i think amazon did the best in the quarter in terms of what they showed, what they demonstrated whats interesting about that company is you dont know when youll get a profit quarter to quarter. Thats not why you invest in that stock you invest for the top line, for the thing going up and up and up thats the thing if youre doing puts on this, you know, how far out . Maybe a few months out yes, theres going to be some pullback but longer term, six months out, even a year out, i think these guys are definitely going to be going up because they tend to surprise the upside theres more upside in terms of the business, in terms of advertising with facebook and google for amazon its almost like anything, theyll buy into anything at this point theyre a portfolio ompany. Before this skid got rolling there was one line about distinguishing between the big cap, specifically facebook, google, vertsz amazon, is that amazon is not considered part of a duopoly that might get crimped or shut down i dont know how much that narrative will take off again but it seems to pop up. I think the duopoly narrative is interesting most of the Online Advertising isnt the advertising you see on tv which they call direct response ads small mom and pop ads. Which is why its not quite as a cycle can go tv money is going to go towards facebook and google as they create more tvlike shows. Facebook is investing, google and apple for that matter. I think they have figured that game out i think thats where they see Growth Potential they want the marketing dollars. They dont want in addition to the long tail mom and pop ads they want the big splash ads mike, maybe this question is for you, how important are those components for the nasdaq . They are the biggest part. I was thinking about nvidia. Amazing earnings report. Done really well snap chat, twitter surprising to the upside but these are not big weights in terms of where the nasdaq itself is going. Nvidia is above 100 billion but its not in the same league as the others. All together the big five of the nasdaq is maybe 3 trillion in market value so thats it is a trevania percentage of the s p 500. It might be 40 . We dont talk much about microsoft bust but thats one of the big guys in this, too. There is lo that depends how they do. There is. I think thats a dang, too i think the market and generally the economies that leaned too much on tech issues to drive everything up. Of course thats their job, when that he look to these companies for but looking at the media sector is worth taking a closer look at they are also in the 1 hub they are going to have a harder time the affiliate fees, the rate hikes are getting blunted because of the fear of people buying into the pay tv that might be a sign of weakness yeah, i think that overall the more that tech starts to own the other industries you will see upside. They are swallowing it up yeah. You will talk more about this in your conference next week ed lee thank you for joining us. Oil crossed below a key level today, a 9. 5 drop in five sessions we will hit the energy trade after this. Tonight on fast money, a technician says the s p has reached a key vel lethat could be a bullish sign for stocks he will tell us what he sees at 5 00 what is the power of pacific . Its Life Insurance and Retirement Solutions to help you reach your goals. Its having the confidence to create the future thats most meaningful to you. Its protection for generations of families, and 150 years of strength and stability. And when youre able to harness all of that, thats the power of pacific. Ask a Financial Advisor about pacific life. Energy the worst performer on wall street today with crude oil and did wti below 60 a barrel Jackie Deangelis has the details. A drop off in Energy Prices today. Crude oil lower by more than 3 on the day almost 10 on the week well under the psychological mark of 60 a barrel how did crude go from trading over 65 two weeks ago to under 59 in the session today number one, the equity selloff one of the key themes for 2018, that bump, has been better demand now investors are worried if stocks sell off demand will drop number two, the dollar after a steep drop, now back over 9o. Remember commodities have an inverse relationship to the dollar index third, opec. They were Holding Production up. What else can they do to get the prices higher. And the fourth factor, supply. Investors who thought the rebalance was happening see u. S. Production at over 10 Million Barrels a day and have to wonder crude stocks were down as well xle and oih both down. Big oil, conoco phillips, bp all seeing red to the. Exxon one of the lone bright spots. If equities continue to decline most analyst say expect oil prices to go with them. Jackie, thank you Jackie Deangelis on a rough week for energy in particular. It might be a week that most traders would like to forget could next week be better . We have a slew of blue chips, coke, pepsi, marriott and many many more. After this tomorrow, its a day filled with promise and new beginnings, challenges and opportunities. At ameriprise financial, we cant predict what tomorrow will bring. But our comprehensive approach to Financial Planning can help make sure youre prepared for whats expected and even whats not. And that kind of Financial Confidence can help you sleep better at night. With the right Financial Advisor, life can be brilliant. At ally, we offer lowcost trades and highyield savings. But if thats not enough, we offer innovative investing tools to prepare you for the future. Looks like you hooked it. And if thats not enough, well help your kid prepare for the future. Dont hook it kid. And if thats still not enough, well help your kids kid prepare for the future. Looks like he hooked it. Well do anything. Takes after his grandad. Seriously anything, to help you invest for the future. Ally. Do it right. Today, a focus on innovation in the Southern Tier is helping build the new new york. Starting with advanced manufacturing that brings big ideas to life. And cuttingedge Transportation Development to connect those ideas to the world. Along with urban redevelopment projects worthy of the worlds top talent. All across new york state, were building the new new york. To grow your business with us in new york state visit esd. Ny. Gov. Despite all the volatility this week a lot of the individual movers were the earnings names we get more reporting next week, consumer names like restaurant brands, pepsi, shake shake, kraft heinz, cam belles i dont know if those are the kinds of names that can buck this market up. Its hard to know maybe they can create a bit if they are good in that group, the staples group. Cisco. Cisco is reporting as well. Not much of a bellwether. I think its going to be about has this market stabilized and since the stock market topped pond yields are up. Its about making our peace. We still have to have a settling out period. We might get more commentary about the impact of tax reform then retail earnings as we get further on. And the fed will be here in march, before you know it. Lets not get ahead of ourselves. Have a great weekend everyone that does it for the closing bell. Fast money begins right now. Fast money starts right now with breaking news on what has been incredible and historic week for the market. The dow in a number of daily wild swings traveling more than 20,000 points this week with two 1,000 point drops. At one point we were in correction territoryand at the lows today the dow swung in a thousand point range yet again and closed up. Is this a sign we are closer to the enof the