Parts here today. Some are literal. The princess cruise ship is one. Theyre watching throughout the day as it makes its way to the port of oakland. It is supposed to dock around 3 00 this afternoon. Well talk about that, oil off the bat with our buddy phil flynn out in chicago, price futures group, senior strategist at cme. We talked about it last week, phil. You and i were going back and forth about russia and saudi arabia. Now we have the true price war breaking out that has consequences in places like texas and north dakota. Take us through what youre thinking about today . What im thinking about is were learning today, not always is a low price for oil good for everything. There is concerns for banks, oil producers, the general overall market. Having said that, there is some hope, you know, right now with the talks of stimulus. Maybe we can pull off the lows right now. There are old saying in the business low prices cure low prices but this breakup of opec and russia, this opec plus agreement is going to create more uncertainty in the market. You know the thing that i have to say about that is that what happened today by opec and russia getting into a little match against each other really threw the rest of the world under the bus. Already oil demand, connell, is the lowest level it has been since the great recession, since 2009, and now flooding the market with oil will put a lot of people in jeopardy of losing their jobs. They could create a ripple effect. Theyre supposed to stablize the global oil market, not terrorize it and i think in this case they terrorized the market and were seeing the fallout from that right now. Connell implications in west texas that rely on shale drillers f you look at shale oil producers, stock prices down 30, 50, 46 today, people will be worried if theyre not already about their job security. When you hear sweet spot, phil, people talk about that, they say, there is assumption made by some that Lower Oil Prices is good for all of us because were paying lower gas prices, understood. Right. Connell but what is, or do you have a sense what a sweet spot is, we afford to fill up our cars and not really hurting us, but the Energy Industry which is important to the country can do well, what is the price, do you know . I think it is above 50 a barrel for everybody to do well. Listen, i know producers can produce at 40 a barrel. Producers can make money at 25 but 50 seems to be that sweet spot where both producers and consumers can be. One thing i want to point out, when oil is at 50 and sustainable, it isnt always about the producing side, it is usually about the global economy. One of the things that sustain that price is a booming global economy. When you get into recession, you can give away oil because nobody is buying it because the economy slows down. That is what the market is fearful of. When they look at the yield curve earlier this morning, every part, long end, short end of the yield curve, below 1 . Connell right. When you look what is happening in the stock market youre pricing in recession and that is what the oil prices are pricing in. Sometimes a rebound in the oil prices can actually bring confidence to the whole market. Connell 34 oil, to your point were pricing in global recession. You would like at least get back over 40, give you a little confidences, maybe . I think so, absolutely. I think it will be very important to see how the Trump Administration stimulates the economy. They say theyre going to help out businesses. I dont know if they will help out the oil industry. That is not very politically popular to do. That might be something they can do, maybe help out some banks lending money to these guys. President trump did blame saudi arabia and russia for this big selloff in the market today and in the past they listened to donald trump. When donald trump, donald trump should pick up the phone, what are you guys trying to do right now . Youre supposed to be the Global Central Bank of oil. You let everybody down. You better get your act together. Connell what do you think theyre trying to do . Essentially put american shale drillers and companies out of business . I think that is how it started. I think the russians were saying listen, were tired of cutting production just to prop up the u. S. Producers. Were tired helping out the u. S. Making them look good. They were willing to extend production cuts but saudi arabia they were adamant. No we want to cut or were walking out of the room. Eventually, because the russians wouldnt go along the saudis immediately said this will be a day opec will regret. They started cut oil prices to the russian customers, got them on the phone, hey, whatever youre paying to the russians well give it to you six to 10 less than a barrel. If buying from the u. S. , well cut it to six to 10 a barrel. It became more after emotional thing than a business thing. Saudi arabia has a lot of political problems right now. The crown prescription arrested members of his family. I think theyre under a lot of pressure to keep the price up. This is probably one much his last gasps. Connell we may come back. Well see how the next couple hours go on the floor session. Off the lows for whats worth, crazy as it has been. Phil flynn on the floor in chicago. Lets get to the stock market. To watch the dow down 1300 points to think it has been worse today is something else. It was much worse. We were down over 2,000 earlier. There was a 15 minute time out in the market this morning. Liz claman made her way down to the New York Stock Exchange. She will host the claman countdown there this afternoon and she joins us now. Youve been talking about it, liz, even more than most, this kind of day was something we, you know, wanted to be careful of but it has been something to watch out, playing out in real time here. Liz january 22nd we first noticed it. I wasnt at work. I had to take the day off. They said you have to get on this number one, connell, i always felt, i made it very clear, that the chinese were never being up front or honest about their numbers. When you start to hear hear numbers of affected individuals are coming way down, that is positive for china i would take that with a grain of salt. Let me just describe the scene here. Veryrd early. In fact as soon as the markets triggered that limit down and then all trading halted, everyone was prepared, everyone is still here and everybody from several traders that i spoke to were very calm and orderly. Now if we can just pull up some of the european markets maybe we get a window what our markets do. Theyre much closer to the close than we are. They are down about 6 . What youre not seeing here is the milan stock market. He was just checking that. The italy stock market is down 10 full percentage points. I see greece is down even more. Greece is to the tune of 13 1 2 . Spain is down 7 1 2 . The european markets are struggling in the final hours of trade. S p for us is down 138 points or down 4. 6 . It was much worse earlier. That would be where we once again see the curbs and triggers where we stop trading all, and it halts. It is on your screen right now, that would be a level two decline, 15 minutes. Level three which were nowhere near. A lot of these traders here are telling me they do not predict we would see a level 3, 20 decline we would step trading for remainder of the day. We are here, looking specifically. I know you mentioned some of the shale producers. I dont know if we can pull those up for the moment. Specific names im looking at, apache, pardon me, exactly at noon, apache was down 42 . You had Continental Resources down 40 . Conocophillips, these are huge names, down 23 . Then you have got the independents like diamondback, i know you showed that one earlier, that is down 44 . There is a Company Called parsley, lesser known, 2. 5 billion market cap, that one is down 36 . That is the problem here. One of the traders told me, liz, you have a weekend, were coming off a weekend, more people sick in america, now 496 cases. So it is not going to zero as the administration had said late february. We do have of course the opecrussia, huge story, huge is the way that the traders are describing it right now, they are using it as a they cant get their act together whether to cut production which in essence would put a pillow underneath the situation but switch it over to peak anxiety. Are we seeing peak anxiety with the cruise lines . They are getting hammered once again, whether norwegian, carnival cruise, royal caribbean, these names are struggling at the moment. Look at royal caribbean, down 21 . As we know these ships that is expected to arrive in oakland is very close at the moment. You probably know more about that than i. Well be live 3 00 p. M. Eastern. Traders are telling me, connell, i will finish with this, some may consider buying in the last half hour of trade. So it could be a rocking session. Well see you then. Connell especially the last ten minutes. Well see. When we always meet every day at 4 00. You never know sometimes the big changes, wouldnt be surprised, claman countdown live from the New York Stock Exchange. With he see that today, which direction anybodys guess at close. Well talk to you then, liz claman. Lets get into the issue of Energy Independence more. Weve been talking about the Energy Related stocks. These are big ones. Those other companies are related, any way involved in the Shale Oil Industry are getting hit even harder today as a price war has broken out between saudi arabia and russia over oil. That affects again, west texas, south dakota, north dakota and other places where the shale business is a big one. From heritage, we have Energy Economist nick loris with us right now. What is your take on this, nick . Get away from all the virus talk, even though interrelated at moment, talk about the American Economy and how much of an effect Lower Oil Prices can have in a negative, in a negative fashion if they stay there . Yeah. There is positives and some negatives. Certainly with oil and Gas Production in the sites being number one in the world, it has become such an integral part of the American Economy. But at the same time, we also need to look at some of the positives we get from Lower Oil Prices. Is that there is a lot of Energy Consumers who woe benefit from gas prices fall to 2 a gallon and as well as energy consuming businesses and what weve seen in the. Through American Energy production is that these industries are very resilient and very innovative. A lot of people said they couldnt compete economically when oil prices were 50 a barrel. They found ways to do so when weve seen instances with saudi arabia and russia before. So im more confident that these industries are nimble and resilient and continue to produce and supply American Families and businesses with after fordable power. Connell on consumer front, first, then well get back to the industry, but on the consumer front it is logical that Lower Oil Prices means lower gas prices. That is good for all of us filling up the car. I guess the problem is that you need the motivation to travel. If people are not going to places, not going to work as much in the coming weeks or not traveling leisurely as much as they like, doesnt matter what the price is, because you dont have incentive to go for the virus. That is the concern. What we see russia and saudi arabia increase the supply regardless of economics demand was there because we had a healthy economy. Right now there is so much uncertainty in the marketplace on the demand side because of coronavirus. You see conferences and travel plans being canceled and demand continues to fall which is having impact, even more so on price. But at some point that has got to rebound. At some point prices will get low enough people will have confidence, start buying things. That is for the market will determine. When that will be is anyones guess. Because we dont know how bad coronavirus will be, what the uncertainty looks like. Also uncertainty with the future actions of russia and saudi arabia, there is just too much on the supply side and the demand side to know where prices will actually go. Connell thats the biggest problem here, right . We talked about it but that really needs to be emphasized is the amount of information we dont have and the kind of inability to have a reliable metric to make a forecast in so many of these markets. That is what leads people to just not know. Anybody that comes on, tells you it will be fine in a month or the opposite really doesnt know, right . Let me ask you on this final point, nick, ask but the industry. Phil flynn is at the top. Following oil as well. Sweet spot for him is about 50 bucks. You say the companies can survive and figure it out at a lower price . Do you have a different view what is quoteunquote, a sweet spot is for nymex oil . At same time few years ago people thought it was 70 per barrel was the sweet spot. Now it is 50 a barrel. It depends on the geography and deposit but there is uncertainty which parts, which companies will be profitable at which price point. I do think the 50 a barrel is a pretty good benchmark for the health of the u. S. Industry as a whole, at a time where it can keep gas prices relatively low too. I think that makes sense and i dont think this strategy from russia and saudi arabia is sustainable either, because it is going to cost them a lot of money to implement such a strategy. Weve seen saudi arabia try to break the backs of the u. S. Oil industry before and it wasnt successful. Connell interesting. Russias finance Ministry Said they could withstand 25 do 30dollar a barrel oil for six to 10 years. You dont buy that . I dont. That remains to be seen that would cost them a lot of money. If they were so hellbent on doing so they would have done that to break the backs of the u. S. Energy industry. The fact they havent done a strategy like this before, suggests that is all talk without a lot of substance behind it. Connell does the president have options here . Im not talking about virus. Im talking specifically about this oil movement, if so, what are they . I think it speaks with actions in a way that suggests that the u. S. Energy industry is healthy. It is going to continue to export and supply the world with affordable, reliable power. Weve seen what the market can do in the United States, in becoming the Worlds Largest oil and gas producer. Weve also seen the amount of exports increase to countries allies around the world to give people more choice. Theyre not dependent on oil nations or russian gas. We used our energy as a strong economic and geopolitical tool. We should continue to do regardless of strategies from nations that may be hostile to the interests of the American Economy. Connell nick loris, heritage. Terrific analysis. Thanks for coming on, really appreciate it. Thank you. Connell lets get back to the stock market for a moment. We were down more than 2,000 points at the low of the day for the Dow Jones Industrial average. Now you look at the board, two members of that average, walmart, verizon higher. Well take wins where we can get them. Deirdre bolton joins me. Only down 1307 points can we call that connell what a day. That was insane. 2046 points at the worst point for the dow. That was the biggest point drop ever. However it exceeded that limit this morning. Talking with your guest from the Heritage Foundation about oil. One trader i was messaging about this, this is a punch in the face. Nobody saw this move coming. You did last week. We were talking about it a little bit. Connell that wasnt any kind of prediction but the at end of last week we saw the developments and tension between russia and saudi arabia. No, going back a little further than that, nobody saw this piling on top of what were already dealing with which is the virus. A onetwo punch in the ring, a lot of analysts saying for our Energy Industry, below 40 a barrel is dangerous. It is not sustainable. What are we 32 . Connell with brent, right. Were already there. Connell weve come up oaf off the lows like we have in the stock market. Talking about dow, s p, down as much as it is, seeing oil down 34, down seven bucks, were come off the lows but still 34. What i hear on the screens with crude, this is diving the down draft in the stock market. Look at sector rotation, energy is the biggest declining, sort of biggest weight overall. Youre just seeing that between coronavirus and between these concerns about where Energy Prices go, what that does, i know everybody is saying oh, it is good, consumers will have more money in their pockets but at a certain point it starts to hurt the other parts of the economy. You see the fear. People from here and overseas buying u. S. Treasurys, saying i have no idea what else to do with my money . Connell 0. 31 earlier on the 10year. That yield is an alltime low. Were limiting some panic is dissipating a little bit. When you have Investor Sentiment that says i have no idea what else to do with my money, other than to bet on safety, sanctity of the u. S. Government, at those levels. I saw people talking about negative rates. That is unofficial. Me talking with traders. Do we get to where we are with germany. Essentially at this point you are paying for the right to loan your money to a government. Connell i dont know how that makes any sense. That is different story all together what is happening there. Not very far away from what might be happening here. Not out of the question anymore. There is a lot of people saying, futures are showing it for what the fed may do, meeting on the 17th, 18th of this month. Something like that 75 chance of at least a 50 basis point cut. Connell how much does that matter anymore, to people youre talking to . Honestly, at this point, theyre just saying it would help sentiment but as far as what it does,longer term, most people dont want it to happen but to your point not as effective as it once was. Connell we have the oil story but on the virus story the o