Volatility continues to rise. Investors rush to buy up Government Debt. That sends yields higher about i want to tell you again, i cant stress this enough, the economy is stronger than weve seen in years. The fundamentals are rock solid. You have earnings continuing to beat expectations across the board. So i remind he have up with, take a deep breath. Do not panic. Things will get better. If they go a little worse, hey, you have a heck of a buying opportunity. We have all stay lineup to break everything down on wall street. The government pass as brief funding bill to avoid a government shutdown. It leaving a whole lot of republicans pretty unhappy and some democrats about our ballonning national debt. I will speak with the white house director of legislative Affairs Mark Short coming up. First, get down to the nyse. Were in recovery mode, only down 156. Hey, nicole. Trish you hit it on the head. Some things are in flux. Inflation risings, a budget deal, and a market run up 8,000 points since election day. A lot of traders expected this pullback. But the volatility were seeing, dow is down 150 ins, loss of half of 1 . At our low we were down 500. At the high up 350. Today is no different over the last week or so since last friday. Trish, traders dont anticipate it will end. Looking for technical levels. Some people are trying to take profits. It has been a tough run. This is 10 , correction territory, 10 off the recent january 26 highs. For the week, exxon, 3m, travelers, cocacola down 10 to 12 roughly. The dow is down 8 , give or take. It is a fast moving market. Anything can happen here in these last two hours, trish. Trish dont go anywhere, nicole. Stay with me. We want you on the floor as we talk to bellpointe chief strategist david nelson and jeff taylor. I like the sound of your title there, jeff, digital risk, how much of this in fact digitallymotivated or motivated by computer algorithms because, gosh i want to point out were down only 88 points right now. Wild, wild swings. What is your take . You are right. It has some wild, wild swings. A lot is the Technical Trading but i think you nailed it at the top of the segment. Fundamentals of the economy are strong across all sectors. Im looking for buying opportunities in this market. Looking at a couple stocks, home improvement, home equities at a high for last 30 years. Lowes, home depot great buys right here. Financial sectors, big banks, post tax reform they have selffunding mechanisms to go ahead to get into consumer lending. Use technology for mortgages, credit cards, auto loans. Neil just went positive on the dow. Were back down 20. But we just briefly moved into the positive territory. There we go. Back and forth here, straddling the flat line, but, wow, what a compac after having been down significantly a short moment ago. Of course being up as we started this session. Green the red, green, the red on the screen. David nelson, what do you think of this volatility right now . I think jeff hit it an important point. What were dealing with right now is time compression. That is new for a lot of investors. 10 years ago, events over the last week would have happened over weeks, if not months. Today it happens in days, certainly hours. That is a new dynamic investors deal with. Time for the digital aspect of this. Algorithmic trading. It is not cause of the problem but certainly accelerates it. What were seeing right now in the market what we saw at the open, that is great. Lets see what we got trish see what we get at the close, right . It could get really crazy from here on out. Were only down 45. We crossed in positive territory. Nicole petallides, how much of this is basically traders saying, okay, my model was for very low inflation for this foreseeable future, and now things to what we saw last friday with the jobs report, 2. 9 growth in wages, also the atlanta fed thing, could get a five handle on gdp the first three months of the year, how much is this, whoa, i actually have to change my model now and factor in inflation . I think youre absolutely right. Whether looking at the atlanta fed that is certainly an aggressive gdp print but inflation directly correlates to Interest Rates. As rates rise that correlates across the board. I think people are getting out of equity as little bit. Taking some great profits they have seen. That is number one. Number two, people are looking for support levels. Then there are margin calls. People are leveraged in some of these platforms now they have been caught on the wrong side of the trade. What are they doing . Sell equities. Some people running to Government Debt like you mentioned. Trish Jon Hilsenrath was talking about that yesterday. A lot of people were betting against volatility. Turns out the bet didnt go so well, not at least for last few days. They have had to sell positions in order to cover themselves. That begets more selling. Youre looking at the vix right there, which is really measurement of fear. It is continuing to move higher at oneweek chart as you move there, off some of the highs we saw on tuesday, but still, trading at 35, thats big. I mean, i like it when the vix is down around 10, although this is certainly an exciting, an exciting market to watch. Dave nelson, what are you telling people right now . You know, there is a lot of people that very nervous because retirements are on the line and do they get out . We havent had enough calls or people concerned yet and that is usually the kind of capitulation you see at the bottom. Coming into the correction, were seeing flaws in the system, leverage we didnt understand was there, certainly some of Exchange Traded funds. Some are toxic. You can bet on almost anything right now. You have large Brokerage Firms selling tail Risk Insurance or black swan insurance to hedge funds out there. Some is being unwound. That is showing up in the system. That is creating volatility we havent had for such a long time. Trish wow. Well keep watching it as we watch a market off just 27 points. Thank you, nicole, dont go too far. We bring in moodys john lonski. Good day to have you here. Economy is good, right . Yes it is. Earnings are great, growing 18 to 20 this year. Trish so are people overreacting . Im saying to myself, the market is, looking at these wild fluctuations. Down thousands of points, just in the last week 1 2. And yet, were looking at strong economic growth. Looking at strong wage growth. Were looking at people fet jobs. How do you explain that . Earnings will be there. Were looking at stronger corporate balance sheets. We see the bankruptcy rate, default rate going down throughout this year. Theyre worried about inflation. My god, a 2. 9 yearly increase about average wage pales in comparison to the 199s. One time in the 90s we had average wage go up 2 to 4 but at same time core pce price index inflation fell from 3 to just under 2 . The correlation between wage growth and core inflation is proctor gambleally nonexistent. Trish youre telling me the fed may not have to move . They will try to normalize monetary policy. The market expect as fed funds rate something above 2 by end of the year. Big deal. Look at price of oil right now of late . Price of oil, now is under 59 per barrel. Not too long ago, it was 65 bucks per barrel. That is moving lower. If the price of oil is moving lower, it will be very hard to have much of a lasting acceleration by pce price index inflation. Trish see if we pull up a price of the dollar, yesterdays session, 24 hours ago was moving higher. Which you think was a logical move, right . The dollar should get stronger if fed is more proactive. In fact the economy is getting that much better. Where we had a problem 10year treasury yield got ahead of itself. 10year treasury yield came back down to 2. 6 , the market would steady, perhaps rise. Unfortunately looked at the jobs report. Looked at some industrial commodities, oh, my goodness, inflation is here. It will murder us. Well look at four rate hikes. Look at a fed funds rate hike, 3, 4 . I cant take this. Lets get out. Trish let me back up. You said we could have wage inflation. That is good for the economy. Doesnt necessarily translate into inflation for goods and services . Precisely. Trish lets fast forward then. Fed stays on course doing normal thing. Doesnt see a lot of inflation. Moves to get off of zero. Well, the market move higher. I can state confidence, if we do have the declining bankruptcy rate, if profits grow by 15 to 20 , if fed funds finishes year no higher than 2. 8 the equity market will be higher than it was previous year. Trish look at this, john. Someone is listening to you. Were up nearly 60 points on the dow, 75. It could keep on climbing here. How do you just algos dont listen though. Programs dont listen. That is one of the big problems. What is verying interesting going on now, you noted earlier the vix index is a measure of fear or risk in the equity market. Its longterm average is 16 points. It is now 35 points. On other hand if i go to Corporate Bond market, we have another measure of risk, junk bond yield spread. 500 points is longterm average. That spread is well under longterm average. It is below 400 points. Below average fear factor in Corporate Bond market. Well above average fear factor in the equity market this is crazy. I blame on algos. The Corporate Bond market is less i can are quid. They dont do Algorithmic Trading in the bond market. They do it in the equity market. Manicallified in this latest stress. Trish were blaming computers and robots. They pot us into a lot of trouble with subprime mortgages, the program or mathematical trish that is interesting not as active play in the Corporate Bond market. No. Trish good. Less liquid. Trish thank you so much. Were looking at a market that is up 40 points. So we are nicely moving into positive territory here. It is a rocky session to say the least. It could get even rockier. Dont forget it is a friday. Traders have to live with their positions over the weekend so what happens next . Do not go anywhere. Were live from the Financial Capital of the world here on the intelligence report. I will see you here in two. Think your Large Cap Equity Fund has exposure to Energy Infrastructure mlps . Think again. Its time to shake up your lineup. The alerian mlp etf can diversify your equity portfolio and add potential income. Bring amlp into the game. Before investing, consider the Funds Investment objectives, risks, charges, and expenses. Read the prospectus carefully at alpsfunds. Com amlp trish we are still in positive territory right now after a pretty rocky road up there 12 points on the dow. Next there on the dow 30, big board there, nike, american express, microsoft, all higher. A little bit in the red with merck and walmart. Home depot you see right there. Joining me with a look where were heading bullseye brief publisher, author, adam johnson, and peter tear. Good to see you. Havent seen you in a while. Good to see you too. Trish took us market craziness to get us back on set. What do you make of it. One thing i find really fascinating. We had all the information for the last year, markets still grind higher. All of sudden we have market capitulation trade. Now all of sudden or fed holding our hand. They have gone awol and quiet. Ive been very bullish, peter. You had been back and forth, round trips and played it pretty well i like what is happening in the fundamental economy. I think i agree on the fundamental economy. There is nothing wrong with the fundamental economy. If you look at markets, only back to where we were since thanksgiving this is not disaster for longterm investor. Anybody got behind the president since the election has done very well. I think were shaking out more complicated trades, volatility based strategies and complicated etf strategies. That is what is driving this. This is people getting stomped out and trading losses rather than anything wrong fundamentally. Trish that is good. We want a sound market. We want a market that is moving higher based on fundamentals. Not a sugar high from the fed. Not algorithmic trades on volatility or the fed. So would you get in right here, peter . Im Still Holding off. I would like to see more sense of stability. In this current rally were going is great. Were down 400 and up 400. This happening very little. I like to see this start news making sense. That is it when i want to get back in fully. Were not necessarily cheap right now but were not that expensive either. Actually i reran the numbers. Im using 155 bucks for the s p 500 this year. Which by the way assumes trish for earnings. You get the gain from tax reform. That means were trading 16 1 2 times earnings. The markets fall that much since we spoke couple days ago. That is pretty cheap, 16 1 2 times earnings. What happened to google an hour ago before i came over here to join you on set, google went under 1000 bucks. It is growing earnings at 31 . Trading 24 times. That is too cheap. That is what happens you take the market leaders down you spot value. That is what im finding. Trish a lot of value is out there. Oh, yeah. Trish one would think once the tax cuts kick in, Companies Realize the benefits of those. Our economy realizes benefits. Not just companies, but individuals receiving onetime bonus, pay raises. Im optimistic well see nice you turn in Economic Data into the second quarter. We have to sort this through and get rid of kind of these bad trades causing problems. Trish what do you think about what john lonski said about the bond market . Corporate bond market, junk is pricing less risk than the equity market right now in part because the Corporate Bond market is far less liquid so youre not able to play the volatility, vix if you would or other instruments. Is he right . I think he is right. We looked at this like stone pebble and ripples come out. Equities are directly impacted even some fixed income etfs but as you move to real bonds theyre fine. A company came to market, celgene, we were involved in the bond deal. Bond selling same spread and tighter as they were in october. This isnt financial crisis. There is not a credit crisis. There is a lot of calm going on. This is bizarre traders market. Trish this is what ive been saying all along, trying to remind viewers, dont get too worried about this. Ive seen crazy markets in my career. Oh, yeah. Trish 2008 was craziest thing i had ever seen, i felt that one coming. You go back to 2004, i felt that one coming. I can remember, i can remember looking at a house in San Francisco with my husband and they had these brochures on the kitchen table. Oh, boy. Just get oneyear arm look, what your payment will be. I looked at him, fine for you and me. Were sophisticated investors. We understand Mortgage Rate is not necessarily going to stay there forever but think of all the americans getting into these products. It really hit me. I was very concerned for a number of years before we eventually got to 08. There is nothing there thank you. Trish this is nothing that concerns me right now. You see i think that is part of the thing that is going on here, trish. We still remember what happened in 08. It was so scary. We cant believe we got through it but we did. You get 7, 8, 10 correction in the market, wait a minutes it is happening all over again. It is not happening. We know what that was. That was a credit crisis. That was meltdown because housing prices had gone way too high. Trish there were way too many loans out there. Too much leverage in the system. The credit markets were kind of broken. Just an awful situation. Were not seeing that. People are much more cautious. They remember lessons back then. Banking systems, the banks were in trouble in 2007 and 2008. They have corrected themselves. Issued a lot of debt. They sorted themselves out. We dont have bigger systemic risk. This is trading thing we fight through and return to what adam was saying. Trish were up 140. By the way as we started the conversation we were flat. We gained 140 points. People are coming in. Theyre spotting value. Trish yes, they are. But definitely its a traders market. So buckle up like i said. Thank you, peter, adam, good to see you. Thankthank you for coming in. Were looking at pretty wild swings here but as we also have been telling you the fundamentals of our economy are very strong. Well get reactions from white house director of legislative affairs marc short. Thats next. Ncial strategy. You still thinking about opening your own shop . Every day. I think there are some ways to help keep you on track. And closer to home. Im all ears. How did edward jones grow to a trillion dollars in assets under care . Thanks. By thinking about your goals as much as you do. Trish markets are up 152 points right now. It has been a pretty crazy day. It has been crazy week. Look where the dow closed last five sessions. We were down, we were down big on monday, 1175. We were way up on tuesday. Down just a touch on wednesday. But a big loss again on thursday. Now just today, show you intraday chart. Weve been all over the mulberry bush. We were down up, down up. Right now im happy to say were up. A big part of all this is the uncertainty regarding the showdown on capitol hill over the spending bill which finally ended early this morning. For latest go to blake burman at the white house. Blake, i would caution yes, some of it is the spending bill, but a lot of it is concerns about inflation and what that does to various algorithms that people are trading off of. It causes them to change them. That is in part why there is volatility. Full us in on shutdown that is shortlived. You have opinions across the market what sick at thatting place and why it is taking place. Here in washington this was one of the rare bipartisan moments in the sense that you had republicans, democrats coming together to get the massive spending package across the finish line, funding government through march 23rd, and 300 billion in spending, but listing the debt ceiling, or spending rather, for the next 13 months. There is also republicans and democrats coming together that in sense many were not like this at all. In fact 84 democrats, 83 republicans on capitol hill who voted against it. You can separate it into three different buckets. On one hand, president , republican leadership, funds the military, gives them money they were asking for, that they need. However there are also