Transcripts For CNBC Closing Bell 20151211

Of these winners that we now affectionately refer to as the fang stocks . Two Money Managers go head to head, one still likes and the other one says maybe time to look elsewhere. Two emerging market currencies that could have major implications for the boarder market. Why everybody should be watching them, ahead on closing bell. Lets start with this friday selloff, bob pisani on the floor here at the exchange. The bottoline is we are not getting any bounce at all. We opened we gapped down more than 20 points on the s p 500 and essentially we have been sitting at the lows all day. There have been really no significant attempts to rally and every time we have hit a lower low weve seen a little spike in volume. Five to one, seven to one, somewhere around there declining to advancing stocks, notably weak of course oil and oil stocks under new lows here, right across the board, apache, big company down 6 , here is exxon, the majors arent down nearly as much, down about 1 . Defensive names are generally doing a little bit better but some of the cyclical names are having a tough time of it. For example, Retail Stocks are down again today, 2 , sometimes 3 . Here is a good example, nordstrom down 2. 3 . Now, this is the time of the year when the markets should begin picking at the beaten up stocks that have been around all throughout the year. We are not seeing that yet, but there is a couple of intriguing moves here. Csx, the railroads one of the worst performing sectors on the year, csx is up about 4 . Most of the railroads have been on the upside recently. Another Interesting Group are utilities, they are the beaten up group that there should be some picking at at this point. Here is pg and e cooperation up fractionally. Sitting at 52week lows but the fact that a down market like this you have stocks that are relatively stable, thats at least encouraging. Lets take a look at the three things that are moving the markets and bothering them the most, number one is oil weakness. I think of equal importance is the Risk Reduction that we are seeing ahead of the fed as we take down the bigger sectors, the sectors that are more cyclical in nature like materials and Energy Stocks. Finally the credit concerns that are out there, the credit concerns in the bond market particularly in the high yield market. Bottom line is the Federal Reserve a bit of a mill stone around the markets neck and weve got to get back that big event next week. Back to you. Bob, i dont mean to call you old but you have seen tightening cycles before. Yes, i have. From the Federal Reserve. I will call you old. Thank you. Does this feel like normal volatility going into such an uncertain Federal Reserve move, the first hike in a decade . Yeah, i would say i would say yes except that it has been the amount of money that they have pumped in this system is so extraordinary and the bond market has there is so much strange distortion that its very difficult to say for sure where were going to go next week. Literally as i talked to people about my look ahead for the year the Trading Community is confused. Im getting very little direction and strong feelings because no one is quite sure whats going on. So the confusion level is much, much higher than it was even, say, ten years ago during prior tightening cycles. We will see if anything gets cleared up next week, im not so sure. Maybe. Well see after wednesday. Thanks, bob. The credit concerns, big junk bond story we first hit on this show last night. Third avenue management essentially lick which dating its junk bond fund. Carl icon weighing in on the dangers of high yield earlier on the halftime report. Here is what he said. I think the average person that goes into this should basically be warned and understand the danger that youre starting to see it manifest itself now, the sec, i call them the stager. More with our cnbc senior markets commentator mike santoli. Youve been hitting on this today, the fear is this is the beginning of some trend of some kind but youre pointing out third avenue bought the junkestiest of thor young anyway. Its more of a symptom of whats been happening for a long time and it isnt because of anything going on today. Junk bond market peaked in mid 2014 so for almost a year and a half youve essentially had a more finicky junk bond market, demanding more compensation for the risk and today those dice yer sections of the high yield market, the stuff that third avenue focused credit owned basically you cant sell it for a price that you need to give your investors the money back. By the way, the etfs that carl icahn dislikes so much are not the because of the weakness in credit. People are concerned about a default cycle coming about, Energy Prices not finding a floor. In fact, if anything today they are shorting the junk etfs as a hedge. So its not as if the etfs are the epi center, they are the way that you sell what you can when you cant sell the stuff that might go bad. Did you see that big gross that janlt tweeted out. Who will get in if you cant get out, risk off. Theres some fear about the desperation of the move and what that says about the liquidity in the market. I think the desperation of this particular move if this is all it is, thats not a big deal. If it becomes this Chain Reaction where people say, hold on a second, if the junk bond market is that worried in general why are stocks only 5 from their highs . Why is the s p 500 held up so much better than the high yield sector. Maybe its been ignoring it until now. Exactly. Thats been the complaint, people have said why are stocks looking on the bright side . I would point out the kinds of stocks that have been holding up the s p 500 are not related to credit concerns, they are big Growth Stocks who never need to borrow money in the foreseeable future. Usually the stock market comes around if in fact this is a sustainable problem. Let me put one more i think this. When carla kahn first pounded his warning in september that was an opportunity for buying high yield. Basically high yield rallied hard for a month after that. In the aggregate this has been a perfect storm against high yield with banks leaving that market. Exactly. They cant make a market in it so there goes your liquidity even as people because of the cheap money were reaching for yields. This is the point you cant quantify how much of it is yearend, free if he had, lick which is id in this market, the Market Makers dont want to hold any of this right now. We have to assume to some degree, thats exactly right and yes you are right about this stretching for yield, you can never get more yield without taking more risk. Absolutely. Just a question on how it spilled over into equities. Is there any fear it could come under further selling pressure if these funds need to meet redemptions because the equity market is very liquid. Presumably somebody owns both equities. By the way, the vix move today, the volatility index which is based on the price of put options a lot of people are saying hi yield investors put be hedging in the equity put market so that is your effect on stocks. The vix as we saw up 22 right now, it was up even more than that earlier. Thanks, mike. See you next hour. Joining our Closing Bell Exchange for this friday joe durra durrant, Jonathan Corpina and we have Rick Santelli in chicago as well. John, you know, weve been talking all people about tremendous volatility and is this in the context of leading up to the fed or is Something Else going on do you think . I think bob pisani hit it right on the lead in before, he talked about those three factors that are there. Its credit, fed, oil, i will throw i will throw the yen in there also. All those factors mean Different Things to different people and its hitting everybody across the board. What is that doing . Its adding that fear, adding that confusion to investors that are out there. Theyre pulling away from the market and theyre continuing to fit in this holding pattern, this waiting pattern to see whats going to happen with the fed and how all these different factors are going to get affected from whats going to happen with the fed. I dont think that come wednesday were going to get a major reaction in our market, just remember after wednesday we only have ten more trading sessions left in the year, investors have all the reason to sit back and watch what happens wednesday and then watch the aftermath soon after that. So, joe, weve been talking about high yields, energy and the price of oil falling below 36 a barrel, concerns about emerging markets. What has you worried and how do you explain the now 200 point sell off. We were down 310 but still a pretty ugly day for the markets. I think what you have is a very unusual market in that you have an incredibly diverse set of results depending on how you invest. The further you are away from just indexing your worse your performance is. Even europe is down triple what the s p and the markets are in general over the last few months. So what youre seeing is that if youre away from the big names you have underperformed, small caps doesnt poorly, internationals done poorly and youre seeing it in these emerging and high yield. What youre seeing is a big spread now increasing pause one area of the market is pricing for the Energy Stocks and thats affecting the rest of the market. What we suggest for everyone is dont do anything hasty because a lot of these snap backs were having really what were doing is hugging the flat line for the entire year and it feels very emotional, its like a twister that comes through, but nothing has really changed. What were seeing is basically still being in Large Companies that are safe with dividends, youre wildly better off than trying to get exotic. Hey, rick, while theyre selling stocks theyre buying treasuries, dramatic decline in long yields today, up to two month lows for a couple of them there. Are they heading to the hills because of this young bond fear or is Something Else going on . Well, listen, you know, you have to put the money somewhere and i think treasuries are the recipients of this in the long end and it makes perfect sense. If you take a step back and consider that, you know, the fed the pingpong ball that gets thrown in a room that has thousands of mousetraps fully loaded and things are starting to pop. So what do you do . You could put your money in a mattress, a lot of speculation getting in front going in treasuries, weve been conditioned when equities move lower the only hedge is treasuries. The long end especially, low, is important. Youre right, were closing at a yield in the long bond under the ten year note under 214 which means were now comping to october 28th when we sublet 210. The long end gives you a twofer, you can benefit from this type of activity leading up to that pingpong ball thats been thrown into the mouse trap room. No matter what happens after wednesday the 16th you can pretty much rest assured the Global Economy still going to be weak, not necessarily weaker, not necessarily stronger, but the price cap really isnt going to change because the fed is normal liesing. What the fed is doing is changing the ground under the feet of an established downward path of the Global Economy and there ist a persona life who has firsthand experience how this is going to turn out, a, and pretty much 90 of the street is too young to have ever seen bear markets in treasury worth stocks. I wonder what will be cleared up next week even if we do get a fed Interest Rate hike as people are expecting, the whole market is going to be focused and obsessed with the path of rates from there and its going to be tricky for the fed to communicate anything definitive on that point because they have to watch the data. Right. The shock factor of whatever is going to happen wednesday has come and gone, i think weve read the review for this movie and already know the punch line of whats going to happen. I think a lot of people are turning the page to the next meeting, whats going to be said after that, whats going to happen in january and february, whats going to be the after effect and when is that next move the fed is going to make. We have already jumped way ahead of wednesday from this point out on. You said dont do anything hasty, but yesterday we saw people buying oil stocks even as oil prices continued lower, perhaps feeling that maybe they had been beaten up enough. Are you willing to stuff into that troubled sector right now . Yeah, i think bob pointed out we have still got the tax loss selling that is still occurring right now. With high yields i would not simply because the pricing is very difficult in these assets and typically those declines dont turn on a dime. I think in energy weve seen the worst, weve seen a real decline in spending and end investor in the last couple of months and thats going to have an impact on supply. So it is early, there will be volatility, but i think were very close to a bottom and that a year from now very likely we are above 45 a share, 45 a barrel. One thing i will suggest for everybody right now, rebalance your portfolios because when youre going to have parts of your portfolio down a lot youre going to be underinvested in the areas which have declined the most. If you have a diversified portfolio make sure you that rebalance because youre going into a new year, you might be underweight, emerging markets, international or Energy Simply because of whats happened in such an unusual year. That is for sure. And its finishing on an unusual note, too. Thank you all. Everybody have a great weekend. Heading to the close we have 45 minutes left in the trading day. Anything can happen now. We are back to the lows of the session with the dow down 300 points, you saw oil there down 3 to 35 a barrel. The nasdaq down 2 . Coming up. On that topic is time to sell this years winners. Two leading wall street strategists will debate whether facebook, amazon, netflix and google strong stock runs are over. The mega merger officially announced today. We have the highlights from david fabers first on cnbc interview with the ceos of dow chemical and dupont soon to be dow dupont. Youre watching cnbc. We need to be ready for whatever weather may come our way. My names Scott Strenfel and im a meteorologist at pg e. We make sure that our crews as well as our customers are prepared to how weather may impact their energy. So every single day were monitoring the weather, and when storm events arise our forecast get crews out ahead of the storm to minimize any outages. During storm season we want our customers to be ready and stay safe. Learn how you can be prepared at pge. Com beprepared. Together, were building a better california. Welcome back. If youre just checking in for the day, big selloff today, in fact, were hitting lows for the session right now, dow down 319 points, nasdaq being the hardest hit down over 2 . Here is the ten sectors inside the s p 500 index, Energy Sectors being hardest hit after being one of the leaders yesterday, the up side, utilities the least of the worst today. Yeah, but energy down there, down 3 , that is because crude oil fell below 36 a barrel, First Time Since february 2009. Jackie dee ang nis has been following this. What was interesting to see was that oil stayed under pressure even though that rig count came out which would suggest that oil prices should go up. It did. 35. 62 was where we settled a more than 3 loss on the day, more than 10 loss for wti on the week. The first thing that happened this morning was the iea report which indicated this glut of oil, its going to last through 2016 and not only that but they scaled back their demand projections. When we get back to that fundamental story we still know the world is awash in oil and that is going to be for some time. 21 oil rigs did come off line last week but lots of rigs have come off line, in the report last week we saw we are still well over 9 Million Barrels a day. Thats a problem when it comes back to the supply story. In the rest of the complex that the gas hitting a three year low today dipping under 2, 1. 99. Temperatures are very mild right now, in new york city were looking at 66 this weekend, some people havent used any heat at all. So that certainly is going to save them on their bills because these prices are coming down and they will probably be using less if the temperatures comply. Along the same lines heating oil lost more than 14 this week. One of the guards here at New York Stock Exchange told me yesterday he paid a few years ago for heating oil 4 a gallon and yesterday for the pay before he paid 1. 50. Wow. Its very staggering. But do remember that more people are using that the gas than heating oil. Thats a small part of the population at this point. Thats for sure. We can only imagine whats happening in the gasoline market down the road. 2. 01 still. I checked for you. We are not there yet. I said we are having a party when it hits 1. 99. Thank you, jackie d. We have a news alert on the fed. Lets send it over to seema mody. The market may be expecting a fed rate hike next week but jeffrey done lock doesnt think its going to happened. If the Federal Reserve met today they would not raise rates amid market turmoil the bond investor says there is never just one cockroach in any kind of credit market and investors have been on credit overload, he said the best trade to investors sell the s p 500 index and buy close end credit funds. For now back to you, bill. Is that from the new bond king on wall street. He has been saying the fed should not race Interest Rates, he has been warning about the problems in the junk bond market, even though the odds of a fed rate increase have gone up he says not to do it. Tell you about the big deal, dow chemical and dupont formally announcing their merger this morning. The all stock deal spawning a 1307 billion company organized into three businesses, agriculture, materials and specialty products. The ceo of both companies spoke with david faber earlier today about the key drivers of this deal. This deal youve got to understand is the most tax efficient way to put the pieces together properly. There is no tax. This deal was always to be had. This deal was always there and every investor including activist investors who we settled with and their two directors by the way, great day of the accident directors, fiduciary duty, doing the right thing, this is a unanimous approval to get this deal done. The merged company will go by the name dow dupont, will be owned 50 50 by current shareholders of both companies. The dow ceo will become executive chairman and take the lead in the materials division, ed breen will head up the ag and especialliy units. They are going to eventually break this company up into three different parts. Two become one becomes three. Becomes three. We cant understate the historical relevance of this deal, most of these companies trace their roots back to the 19th century, dupont started in 1802. These are pioneers of american history, combined 83 billion in revenues. They say that this deal is going to be 3 billion in cost synergies, which is a euphemism for a lot of layoffs ahead which is something that faber asked them about as well. It also continues the trend of mega mergers we have been seeing. This tl may be some more and maybe before the end of the year as the fed gets ready to raise Interest Rates and make money a little less cheap and the fax implications. Pfizer allergan the biggest, 160 billion. It has been a year of big deals. Heading to the close, 35 minutes left in the trading session here and we continue lower, to the lows of the session with the dow down now 341 points, a decline of almost 2 , but the s p and especially the nasdaq are down more than 2 right now. It is a strongly down day, a down week, worst week in a month for all three major indices. Up next, why you need to be pang attention to two global currencies hitting lows against the dollar. Is it perhaps time to sell the socalled fang stocks . That would be facebook, amazon, netflix and google which now is known as alphabet so i guess now its fa. Anyway, two wall street strategists will debate it coming up on the closing bell. The challenges of keeping everyone working together can quickly become the only thing you think about. Thats where at t can help. At t has the tools and the network you need, to make working as one easier than ever. Virtually anywhere. Leaving you free to focus on what matters most. It has been a down day for the Dow Jones Industrial average, currently trading at session lows, down 325 points. Bill, bouncing around, but here we go heading toward the bottom to close out what has been a down beat week on wall street. The s p and nasdaq down even more percentagewise today. Trading in shares of Hong Kong Companies owned by a chinese billionaire will resume trading monday after being suspended today. A bizarre story involving the disappearance of one of chinas richest men, seema mody has been following the latest developments. Its certainly a story that has captivated the attention of im investors, bill nare gua chang was seen missing. Its now understood he has been detained by police as he helps chinese authorities with an investigation. This comes as china has been trying to implement this anticorruption track down. Gau is not the First Executive in china to go missing is chairman of fo sung. Has investments in club med, one chase Manhattan Plaza in new york ands its a lack of clarity on whether investitors are investigating his businesses or using the billionaire to get information on other executives involved in mist on duct that has sparked fear Long Investment officials. Its also been seen as why investors have been pulling money out of chinese stocks. The chinese yuan continues to weaken, logging its biggest drop in a decade. Also not a good sign for china as it continues to deal with a slowing economy. A lot of people worried about that chart. If i would point to two charts of the week that have people worried in the currency market that reverb rate well below currencies we have to start with that dollar versus the chinese currency. Remember what happened back at the end of august when china all of a sudden abruptly moved to weaken its ens kree, its happening again. China is guiding its currency toward a four and a half year low against the dollar. Why now . How worried about they about the fed ral reserve and money coming out of emerging markets. Emerging market stocks are having their roughest week, they had their roughest week since back in september and this is a big concern about what happens when the fed moves. The other one i would point to, chart of the week, South African ran, it got creamed this week hitting a record low. There was some trigger with policy uncertainty as the president abruptly fired his finance minister who was deemed credible by the markets but you also have the commodity route telling the story. South africa is a big mining producer, platinum all getting crushed this week and this one has been trouble as well. You never want to see these crazy currency moves especially ahead of an uncertain fed meeting. Do you think the people you are talking to when the fed does raise rates if they do does the dollar rally continue or a sell on news. It depends on the message of the Federal Reserve. The first rate hike has already been dealt in, if they can issue some dovish message, were going to be super slow they probably will do that, right . Which is why youre seeing pressure on the dollar this week. Does it mean we dont hit parity against the euro. Were 110 on the euro. Draghi disappointed too, you have to weigh that factor. So many twists and turns. She loves this stuff. Time for a cnbc news update with sharon epperson. A car bomb explosion that was claimed by the taliban hit a Diplomatic Area of central kabul killing a Spanish Police officer and wounding seven civilians, an afghan official said the car bomb struck in an area with embassies and other diplomatic builds, two attackers were killed. Thousands attending a service for one of the victims of the San Bernardino shooting rampage, a memorial was held this morning for 58yearold damian meins in riverside, he was married with two children. The federal trade commission is asking for more information about walgreens 9. 4 billion plan to buy rite aid, a sign that regulators may have concerns about the deal. It said it expected the request. And the u. S. Pregnancy rate has hit an all time low. The data is from 2010, the most current year available, abortions also hit a record low but pregnancy rates in women over 40 increased. Thats the cnbc news update at this hour, back to you. Interesting. Im not ill let you two talk about it. I know a lot of pregnant women so i was surprised to hear it. Shanks, sharon. We have a news alert on exxonmobil. Morgan bren nn with that. Ex job mobile naming darren wood president of the company, he has also been elected to the board, both of those effective january 1st of 2016. Now, darren woods could be a potential successor to ceo recs tiller son, so he is a name to keep an eye on. Tiller son doesnt have to retire as ceo of exxonmobil until 2017. If there were to be a change in the c suite of that nature it would not k imminent and the second thing to keep in mind is woods has run downstream operations, refining and chemical operations for exxon, several analysts telling me if he were to be the successor to tillerson in coming years that this would be somewhat a break with tradition. Exxonmobil naming darren woods the president of the company and that taking effect on january 1st. Back over to you. Thank you, morgan brennan. Isnt it interesting how were this far into the 21st century and how the Victorian Era still with us, how we still at this timer a little bit when we mention pregnancy and women. I guess, yes. I think thats true. Just an observation there. Although i was willing to weigh in for the record. I gave you the opportunity. All right. Weve got a little less than half an hour to go before the close of trading, the dow is lower by more than 300 points, looks like 330 points, all 29 out of 30 dow stocks are lower, p g holding up just barrel. Heading into a critical time of the day here. A top trader will tell us what to watch in these final minutes of todays trading sneegs another executive leaves yahoo, we have the details and fallout for the stock all coming your way on closing bell. Weve got a broad market selloff with the dow down 300 points, s p 500 down 1. 5 . Lets check out widely held Exchange Traded funds, spider Home Builders under pressure, the ibb biotech also getting hit. Semiconductor etf, xlf, the Financial Sector spider hard to find green out there, bill. Yes, it is. Down here on the floor now with steve grasso, Stewart Frankel i know you frayeders love this kind of volatility. Sure. But in the aggregate which way are we going here, just moving sideways basically. This is a pretty substantial move down, bill. It caught a lot of guys off guard, youve obviously seen the market move sideways to lower but people hoping for that bounce or support going into yellen. Everyone was factored its a done deal, theyre going to raise. So if you feel that way and i think that yellen feels like she has to raise at this point its probably ultimately negative for the market i would say. Jeff gunlach said today he thinks if the fed were meeting today they wouldnt raise rates because of that market volatility here. I think jeff probably gives the fed a little too much credit. I dont know if they work that quickly, but ive been seeing for a while they cant raise, they are really boxed in here. Look at it this way, we usually have that gap, that spread between longterm and short term rates when they start raising. 350 basis points. They dont have that so they have at least 200 basis points. So if you start to get that inverted yield curve, we have already seen everything flattening except for high yields. If you can push that a little bit quicker what does that do . That pushes us sooner rather than later into an recession. So im not sure this argument of they need to raise them a quarter point so they can cut them a quarter point holds any water for me. Do you think well rally into the fed next week . Thats typically what happens. I think that theres a couple of things they can do and i think all of them are very shortterm bullish for the market so, yes, i agree we could probably rally into the fed and thereafter, but this market has a destiny with a lot lower and probably going to break that 1867 low unfortunately. Keep an eye on that. Thanks, steve. See you later. Sara. Bill, this years market leaders, the fang stocks are getting hit pretty hard today. Facebook down about 3 , amazon losing 4, netflix seeing a loss of 8 and alphabet or the Company Formerly known as google down 3 . Is this a sign that its time to get out of these high flying names . Ann maletti thinks so but david darby disagrees. Absolutely disagree. Yes, theyre pulling back in week but some of these names are up 70s, 80, 100 so far this year. They cant do that so far next year. Probably not. Here is the common thread. Ceo is the founder, very shareholder iven in the case of the three names that i and my colleagues own, amazon, facebook and google. Strong Free Cash Flow. Amazon going from 2 billion Free Cash Flow to 5 billion plus Free Cash Flow. Youre not saying anything that people dont already know and wouldnt have already baked in. But on a Free Cash Flow basis these are not expensive stocks and if youre simply looking at them on a price to earnings basis you are missing the longterm shareholder creation in these stocks that if you had fresh money to put to work today you would put it to work in three out of those four names i mentioned not netflix. What about what david is saying about their longterm prospects even as youre saying maybe its time to look elsewhere given the tremendous gains you have seen in these companies this year. Right. I mean, these are Great Companies with Good Business models. The price the fact is, though, there is a price to pay for every asset and were getting at prices that i think the risk reward potential shifts out of favor for the average investor and so i would not be putting new money to work. The market cap of these names has gone up 450 billion in a market thats flat to slightly down year to date. The price to fails ratios have gone up 50 . Were talking big jumps in valuations and these are big companies. Its hard to sustain growth at those levels. The other thing, bill, is i think investors are thinking about 2016, where they need to shift money to, Portfolio Managers are doing it, individual Money Managers. We have been in a very narrow market where only a few stocks in the s p have really driven until performance out of the market and i think its time for the market to broaden out. You dont own netflix. No. Even though thats run by its founder and is a category killer as well. A pe of 250 times earnings there is a price earnings ratio you will worry about. Why dont you apply that to an amazon . Because i think if you put them on a cash flow basis its not the same lofty valuations as netflix would be and if you just look over the longer term the shareholder creation, particularly with founders as the current ceo, that is a wonderful ingredient to longterm growth in stocks and im a pleefr that you buy and sell your portfolio, hold the sort of the chicken way out of it. If you have fresh money to put to work today we would be putting it to work in these stocks looking at it over a longer term cycle which is how i create shareholder value. Except for netflix. Except for netflix. And the counter argument to your point about valuations is that what weve learned is that the same rules dont apply to some of these Companies Like an amazon and certainly they are not applying in an environment of sluggish Economic Growth and very little earnings and Revenue Growth from the rest of the s p 500 where it does seem that investors will willing to pay up no matter what price for growth. Right. I mean, sara, investors tend to overshare in both directions, Momentum Works on the upside but also is painful on the down side. As the other guest alluded to we are up those stocks also have appreciated 40 in terms of price to cash flow. So even if you think they are inexpensive, 40 increase on cash flow is a flat market, these stocks are, i think, a little bit over done here. They need to rest, possibly go down. And theres other places in the market that look for attractive to us. I just really think that the risk reward is not in the investors favor. I think its important to point out, ann, you are not advocating selling these companies if you own it, youre just saying if you have new money you would put it to work elsewhere, correct . Absolutely, why he. And i think you buy and sell your portfolio every day, you dont hold fresh money should be put to work. I saw the pain in 99 when Growth Stocks were priced for saint hood, these are longer term Wealth Creators on a cash flow basis. Very good. Good conversation. Appreciate it. Ann maleni and saved sarby. How much the s p would be down without fang because theyre heavy weighting. That gets very complicated. Bill is going to crunch the numbers. 16 minutes left in the trading session here with the dow down 325 points, the s p down 2 , nasdaq still down 2. 3. We will take you live to the Nasdaq Market to see what is dragging it down hard. Plus later a top fixed income expert will tell us why he still likes high yield and believes the volatility is creating buying opportunities, coming up. Here at td ameritrade, they love innovating. And apparently, they also love stickers. Whats up with these things, victor . We decided to give ourselves stickers for each feature we release. We read about 10,000 suggestions a week to create features that as traders wed want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. Who reads all those . He does. For all the confidence you need. Td ameritrade. You got this. Markets still lower, down 315 points on the industrial average, s p down a little less than 2 now, the nasdaq down 2. 25 even as oil, wti went down 3 today with a 35 handle. Bucking that trend, though, is whole foods, itg says that it expects the high end supermarket chains earnings to beat analysts forecasts this quarter. The firm says its channel check show improving sales trends and look at that whole foods up 9 in todays trade. It still lost about a third of its value this year. The nasdaq on track to close below 5,000 for the First Time Since november 17th. Kate rogers has more on the movers there. Were down just over 2 and as you mentioned the nasdaq to close at one month lows snapping a three week winning streak. One of the only major averages thats up for the year about 5 year to date. One of the biggest losers in the tech heavy nasdaq 100 yahoo seeing more talent out the door. That stock down around 4. 5 . Another big loser of wynn after steve wynn announcing he is buy 100 shares on the open market for the company. The symptom up mother than 13 yesterday, down today around 5 . Staples another big loser in the 100 continuing to sink after the ftc filing a complaint to block its proposed acquisition of ofs depot. That stock down 4. 5 . Adobe after posting profit that beat for the ninth straight quarter on Strong Subscriber growth for its Creative Cloud including products like photo shop that is up by around 3. 5 . Back over to you guys. Kate rogers. Lets head out to dom chu. We have an update on the daily fantly sports situation. What we have is a report from reuters saying that the new york courts have allowed an interim stay while they appeal the ruling that we had from earlier today. In other words, daily fantly sports sites like draft kings and fanduel can continue to operate in new york state while an appeal iseing heard on whether or not they have to cease their operations. The new York Attorney Generals Office won a ruling in which they had to force them to cease their erations. The appeal is being considered by the courts. We are being led to be aware that these courts will left draft kings and fanduel continue their operations while this appeal takes place. Comcast Nbc Universal is an investor in fanduel one of these daily fantasy sites. Back over to you. All right. So the fight lives on, i guess, and so do the sites until they can get this worked out. Dom, thanks. About ten minutes to go before the closing bell right across the screen across the major indices here. We may have seen the effect already but art cashin walked by 400 million to buy, 400 million to buy as we head into the close. The dow still down more than 300 points. It will be interesting to see if this has an impact on this kind of a day. When we come back it is friday that could only mean were due for a visit from davis darst. Find out if he think you should be buying decembers dip after this. All right. Six minutes left here with the dow down 322 points. Joining us is our friend independent Investment Consultant david darst. Lots of volatility this week and of course we know how important next week is. What are you expect to go happen here . With the fed, bill, sara, weve talked for weeks and weeks about the six signals that would signal an impending bear market and they are is the fed tightening, they are beginning to tighten a little bit, having started in october of last year, 2014, with the ending of quantitative easing. So this would be phase two. Secondly, is a recession looming . People are worried about a recession looming. You have had most of the vibrance in the economy has been in housing and in cars which have been financed the cars with longterm loans, eight years to buy a car now on the loans. Number three is are the credit spreads widening and thats really all day today carl icahn, j j, all the different junk bonds. Okay. Number four, is investor euphoria present. No. As a matter of fact right now the internet media companies, you know, those advertising companies. Right. Fifth are the banks transport and small caps underperforming and they have slipped from outperforming to under performing. Thats not a good thing. And the corporate profit outlook, how is that looking and that also so you get yellow or red lights for five out of six and, therefore, isa was a great slave and put fables together. Facial 373 is the aunt and grasshopper and that is prepare for winter tomorrow today and that means have some cash and be very judicious putting that money to work. The headline from david darst, winter iscoming. Thats right. Thank you so much. Words to live by here. Appreciate it. Were coming back with the closing countdown in just a moment here. Stay tuned. When we cook together, we rise above our differences. The right amount of garlic reigns supreme, and what separates us is mostly whether were chopping or frying. Food is a language we all speak. When we cook together, we find harmony in the kitchen. We make more than a meal. Enjoy fresh ingredients and healthy recipes, delivered to your door each week. Subscribe today, at hellofresh. Com when youre not confident you have complete visibility into your business, it can quickly become the only thing you think about. Thats where at t can help. At ts Innovative Solutions connect machines and people. To keep your internet of things insync, in realtime. Leaving you free to focus on what matters most. All right. A minute left here. Ive got bob pisani with me. I had him ask build a chart for the week of the dow and oil market and i havent even seen this yet. Here is the dow for the week and you will see down 3. 3 . Lets do wti and see how it did. I imagine they are going to track pretty faithfully. Pretty much. Thats down more than 11 for the week, bob. That is quite a correlation there. S p is not doing any better down 3. 8 . Now we get the fed next week, do we rally into the fed meeting or not . It is so difficult because the volatility, the vix is really elevated right now at 24. I think reflecting both oil and feds anxiety and the contracts outside of the fed in december, january and february of the volatility is much, much lower so the market is anticipating a lot of volatility around this particular event and its playing havoc with trading patterns toward the end of the year. Stay right there. We go out with a more than 300 point decline for the Dow Jones Industrial average. Allegation army ringing the closing bell at the big board, at the nasdaq its our Parent Company comcast, the scifi network. Stay tuned for hour number two. Welcome to the closing bell. Im sara eisen in today for kelly evans. Bill griffeth will be rejoining us in just a moment. Here is how were finishing up a down day and down week on wall street. Off the lows but still the dow going out with a loss of 310 points, the s p 500 closing lower, just under 2 down 39 points and the nasdaq getting hit the worst of the bunch down 2. 2 . Worst week for stocks in a month bringing them to levels that we have not seen in a month. Oil decline a major factor in todays market drop, really a theme for the entire week. Lets get straight to Jackie Deangelis at the nymex for more. Oil saw more than 10 drop this week on the day today more than 3 . 35. 62 is where we finished. We did make an extra day low of 35. 35. The momentum on the floor, the sentiment that were going to continue to go lower. So if you are saying that oil is impacting whats happening in equities there could be more pain ahead. Right now we are awash in oil, no positive sentiment out there to show up that oil prices are going to start to rebound anytime soon. There is a lot of fear to get back into in trade. It wasnt just oil that declined today, that the gas going under 2, 1. 99 is where that the gas finished because of unseasonal mild temperatures and heating oil down 14 on the week. Sara. All right, jackie, thank you very much. All right. Joining our panel this hour we have our own mike santoli back with us here and we welcome our friday contributor evan newmark. Also with us for more on todays Market Action is fast money trader tim seymour. Tim, this volatility, you must be loving this. What do you make of it and what are we going to do next week do you think as we go into the fed meeting . Well, if youve been long volatility youre loving this. I think as we look at the vixer up almost 30 youre back at levels we saw at the end of september. What does it mean . I think theres a real cross current of Asset Classes right now, currencies, credit and emerging markets and obviously commodities. I think the market is very, very concerned about what happened overnight or whats going on in the currency market. Theres some belief that china is essentially reval ewing their Exchange Analysis of how theyre going to put the yuan against the basket of currencies and thats putting pressure on a lot of other currencies. I think as wedding into the fed theres very little reason for people to have powder in the game. People it as dry as possible. You hear about all those themes. I know you have been on high yield bond watch, mike santoli. Looking at the worst performing stocks on the week, energy not a surprise at the bottom of the list. Financials are the second worst. Are those two linked . They are. Well, the financials are starting to react to the idea of worsening credit quality. If you look at the bank loans, they had a big outflow from bank loan funds. So the idea here is that youre going to have to raise your reserves, take some losses on some of this Energy Credit and also just in general you have a flattening yield curve, a lot of stuff is working against financials right now. Used to be that financials big banks would trade much more closely to the Corporate Bond market, now that they are not big dealers anymore, they dont hold the inventories but it matters. Like tim mentioned raw nerves across a the love different Asset Classes you probably can trace it to the ecb surprise last thursday. Investors staying back on their heels. These currency moves are wild. What we see in a day, in a week because of Central Bank Surprises thats what has people really worried. What do you see going on . Im going to say its a world thats trying to make something out of not a lot going on. And what i mean by that is you have certain things that are going on, which is the saudis are driving market share gains and thats whats going on in the price of oil. I dont think that that is necessarily saying something about Global Growth, i think its a market share more than going on, i think credit is reacting very negatively to that and you have a lot of people with a lot of money trying to figure out how do i get a yield in the current market. And the reality is there is nowhere for them to go. Absolutely nothing for them to do. You basically have a lot of people trading stuff back and forth right now. There is not a lot going on in terms of the underlying economy thats driving all these changes. A bunch of financial players moving around pieces on the chess board. Some of those pieces that are moving, the dollar weakening, treasury yields moving lower, banks moving lower, not all of these things would you expect to see going into the first Interest Rate increase in a decade. No, in fact, the dixie a week ago we were at par 47 on the dexy, 233 intraday on the ten year and a week later were down to 9750 and, whatever, 210. We are at a place where that should have been positive for commodities, you should have seen commodities do pert. Ultimately the dollar weakening, the euro strengthening is not because europes economy is better, funding trades are being taken off. The yen should be appreciating, thats a market i dont think is responding yet. If you want to get short i think thats a market you can still play. But again these cross currents, cross asset class moves will because i think people are taking money off the table not putting it on. Do you want to go to bob . The dow not just today has seen a move 200 points in either direction on every day this week, bob pisani joining us more on the new found volatility, bop. S p down 3. 8 for the week, worst week since nid august. First issue oil weakness, thats the most important thing, second Risk Reduction ahead of the fed and the credit concerns. Thats clearly related to concerns about the fed but these are also about broader concerns about liquidity in the bond market. You can see these concerns reflected in the sectors for the week. Sara mentioned energy, theres oil, of course, impacting energy down of. 2 . Cyclical names, energy, financials, materials doing much worse than more defensive names like Consumer Staples and utilities. I think thats Risk Reduction going toward defensive names. Emerging markets, so you see we had a horrible week if you look at the eem down rather dramatically this week, down 3 , turkey, philippines, mexico, doesnt matter, everything was down 2 to 4 , raising rates, dollar goes up, weakens the local currency, and thats a big issue. The vix, the volatility index, that top line, thats the cash vix that we talk about all the time. The futures contracts are lower than the current cash contract. That is very unusual. Thats because this cash contract that we talk about encompasses the fed meeting next week. Those other ones, december, january and february they do not encompass the fed meeting. That elevated number is a sign the markets believe there is going to be volatility around that Federal Reserve event. They are right about that, bob pisani. Thank you very much. We will see you later. I think the thing for investors, if you just listen to the discussion last five minutes, its a lot of what i call technical stuff going on, its a lot of large institutions trying to kind of figure out how to close their books at the end of the year. Counter intuitively in some cases. Yes, but here is the thing, i think for investors, im not talking about traders, if you are an investor and have a longer term time horizon you should be looking out not trying to guess what oil is going to do in the next three weeks, not trying to figure out what the dollar is going to do ore the next its what is the economy globally going to look like over the next one to two years and where do i want to be positioned for that going forward. Dont look at whats going on day to day and start freaking out about the fed. The market wants to get you caught up in that, but thats the wrong thing to do. What does Global Growth look like in the next can you freak out about that . To me it comes down again and again to valuation. I would not be buying fang stocks right now because they did so well this year so they have to do well next year. I have liked oil, every time on these severe dips id rather be an owner of a share of exxon at this price than i would a share of facebook. That for me is the bottom line. If you were writing the saturday column what was it going to be about. Was this a panicky washout. Did today represent some welling up of fear that does represent too many people betting on further down side and you want to take the other side. I dont think its decisive. You had 90 of the volume today was in declining stock. The vix move i think that was a lot of people grabbing on something that they could hedge the credit markets with that was not credit. I do think that welling up of near term fear that bob mentioned in terms of the vix futures close versus far away thats often a good sign that people are a little too overexcited. On the other hand this is what we saw in august, a nasty friday, monday did not do well to say the least. Thats the point that art cashin just made on the floor to us. He said that going back several years when the s p closes down more than 1. 5 on a friday, then on monday the selling continues and, in fact, you will see lower lows. Now that weve closed the people the s p closing at the lowest level since october 14th, was it a washout as mike says . Is there more sell to come on monday . I think for sure. I think youre going to see at a minimum you have to see europe come in and trade it down. Then you have turn around tuesday if were going to try to put this in a nice little box but im not sure you can do that. One things thats different about today, i agree with mike, i dont think we got the washout but clearly the credit conversation, if Global Growth ultimately leads to credit fears and what people i think remember i think evan is rights to talk about a longterm horizon, i think, though, when people think about the context of credit and where weve been in the past and where the market is just off all time highs, if this is truly a credit moment, then i think people need to be very wary here. The third avenue news i dont think alone is enough, but people start to remember the bear stearns funds and start to think about 2008 when we started early to get some of these trickle news. But is it a news that will remind we have to be worried about lick which is id in the near term. No one can figure out liquidity is that much worse because were closing our books for yearend. If credit remains unsettled it just sort of sets the price of other Asset Classes. It doesnt mean the market has to keep going down but it means stock valuation sort of cap unless credit can firm up a little bit. I think it is a bit of an issue but a bit of a red herring issue. If third avenue went out tomorrow they could get rid of every piece of debt they wanted they just dont want the price they will get. Its liquidity at the price the seller wants because there is a lot of capital out there, there is a lot of capital that could go to work in some of these bad credits, if you will, its just they want the rice price and thats whats going on. Its a fight over price not liquidity. This idea thatheres so many trades that have been put on as a result of the zero rate, the leverage that has been put on during this historic period of low Interest Rates. What else is lurking when the fed moves and we could see unwind. I think what youre seeing is that exact sentiment of what else is lurking as opposed to identifying specific things where the fuse is already burning down. We just dont know that. Last word, tim. The problem is you cant sell something that theres no liquidity for. This is the big issue. I think a lot of people dont have any idea what could happen to liquidity if we start to see a run on credits, thats the reason why a fund has to put gates ton on their investors. If we look at the s p we traded between 1850 and 2100 for the last 18 months and probably will continue to trade in that range. The market loves uncertainty, doesnt it . Tim, thank you. Thanks, everybody. Be sure to catch more of tim and the fast money gang 5 00 p. M. Eastern time. We have just been talking about high yields, certainly means high risk. As investors hunted for returns they did return to junk bonds. Now there is a concern about the crisis on the horizon. We have a top fixed income expert who says he sees opportunity in in market. That should be also. Also yahoo shares falling on news of another executive leaving the company. Weve got kevin oleary who has a history with yahoo and that stock and he will give us his take coming up on the closing bell. Youre watching cnbc, first in business worldwide. Announcer right now at sleep train, get up to 48 months interestfree financing on tempurpedic, save 300 on beautyrest and posturepedic, or choose 300 in free gifts with stearns foster. The triple choice sale ends soon at sleep train. Welcome back. It wasnt all red today. Whole foods market a bright spot in the stock market selloff, that stock up more than 8 in todays trade channel checked by an analyst found maybe higher sales coming from that company. Meantime junk bond etfs have been getting hit in the wake of third avenue managements decision to slowly liquidate its junk bond fund. Rick santelli joins us now. That brings up so many questions about the market and conditions we are in right now. It does. Actually the notion of many guests have said this the notion that they are taking their time almost scares me more because my guess is there is a lot of people and a lot of investors and a lot of institutions with similar portfolios with the same mantra, which means we are all kind of inching closer to the portal and theres only so many people that are going to fit through it. I guess the easy way to look at this is were talking about normalization on wednesday, which means were coming from something a bit abnormal and the abnormal part was push everybody into something risky that was part of the plan. Well, what happens in a world by design that has a high degree of risk when you change the risk free Interest Rate . See, to me every sector is plugged into that grid. Whether its junk on nonenergy, junk on energy, its affected by everything. But i still think theres a Silver Lining here. We are all on a roller coaster ride, but it isnt the ride or the path and i think the path is going to get crazier leading up to wednesday, its where the market ultimately comes to rest and you get off the roller coaster. And i think on that score that the u. S. Is set up better than most, but i will say when you by design put all this risk in the world and decide to go the other way in rates and youve done it in a climate that is arguably iffy growth thats what happens. Rick, what about the timing of this third avenue move . Does it inspire a lot of confidence as coming right ahead of the Federal Reserve Interest Rate decision . I think that the m. O. Of market trading in the world of computers and zero Interest Rate policy, thats what it is. Theres not a sense of urgency until there needs to be a sense of urgency and i thought many months ago in many debates as does it really matter when they do t theyre going to do it. Yes, it really matters. And i think this is evidence of that. Nobody you know, its like alan green span, many fed chairmans saying they want to see what the landscape is but do they really have the nerve to take away the punch bowl . I think thats exactly what happened with third avenue and theres other third avenues out there. They dont want to get out until they really have to, they kind of like their position and some arent even sure that janet yellen is going to deliver. I think this wild ride continues. All right. Likes you said, maybe even more so ahead of the fed meeting which is next week. Thanks, rick. See you later. Meantime activist investor carl icahn weighed in on this topic of high yield bonds earlier today on the halftime report. High yield market is just like a keg of dynamite that sooner or later will blow up and i did say and i said it to larry and i got respect for larry, that black rock the etfs, black rock and these other companies is a very dangerous because there is no liquidity behind these etfs. Well, lets get reaction from greg peters, he is managing director at prudential fixed income. You actually see opportunity in this crisis, dont you . I do. I do indeed. Today was a classical reaction, a perfect storm, you had fears about china, you had fears around oil, you had imminent rate hike fears all coming to a head and then the third avenue news. I think there has been a lot made of the third avenue, but i dont think its really representative of high yield or fixed income. So, for example, they have 85 of their funds in distress. Thats only 12 of the market. So effectively theres seven times levered in a very small segment of the market, thats not how high yield works. Then to respond to carl icahns comments, he was talking about the other end of the spectrum, which are the etfs. Etfs are also very different than actively managed funds as you are essentially just buying bay at th beta pass tifl, you have a lot of tourists in and out and using it as hedges and its a very different Investment Opportunity than what we do at prudential. I have a question for you, greg. Its evan newmark. Are there buyers out there waiting around to pick up junk bonds at super distressed or credit crunch kind of prices . Im sitting personally on 40 cash, ive been sitting on cash all year waiting for opportunities to arise. Is the you know, the coming crunch that we will see in the junk bond market if things play out in this super negative way that carl icahn is predicting, whether that create an opportunity or will we never come to that point . I think its creating opportunity now. So you look at just the high yield market, its yielding 8. 5 . So youve seen the energy and commodity complex implode this year, but away from that theres some real value there and, in fact, were actually pretty enthusiastic about it. We feel like bonds will outperform stocks, i much prefer to own a high yield bond, higher in the capital structure than an equity at this point. I think there is a lot of value for the active managers in this market for sure. Greg, to what extent can we attribute a lot of the upset ld conditions in the world bond market to these yearend effects . Its not a loan in showing these dis for testify moves in terms of generally in the Capital Markets right now. So is it something that you can wait out and say that things should firm up as Balance Sheet start to regrow back in january lets say . The timing around the fed hike is suboptimal. We were worried about it all year long, actually preferred the hike to be in september or not at all, but it looks like december is the case, unless theres some radical change. So the yearend effect is in full play, the socalled santa claus rally that we typically see is probably not in store for us this year, but i think a little further down the road, lets say a month, two months, three months theres real value. Knowing full well theres going to be significant volatility over the next few months just because theres lack of conviction. No one really knows how to handicap the Market Reaction around and post the fed and the yearend effect and the china and the Energy Stories on top of it just exacerbate it. I think theres medium to longterm value, over the near term i think its difficult to predict, however. Thats for sure. All right, greg, thanks very much. Have a great weekend. Thank you. Greg peters of prudential joining us. The high yield discussion continues monday, peter fisher from black Rock Investment institute will join squawk box at 8 00 a. M. Eastern time right here on cnbc. Do not miss that, especially depending on what the market is going to do on monday morning. Its fed week. Going to be all about fed and the bond market and oil which slipped to a seven year low today. We have someone who says the oil collapse may not be the most worry some thing going on in the Energy Complex right now. That is coming up later. First the brain drain at yahoo, another executive out the door and that stock fell today. Shark tanks kevin oleary will give us his take on the move when we come back. Take a look at yahoo. This was an eventful week for yahoo, the stock down r5 today on the news that the ad product chief is the latest executive to leave. Lets get the reaction to the whole situation going on at yahoo, shark tanks kevin oleary. You have a long history with that stock i understand. Yes . Well, it taught me a very important levin, bill. This was one of the first stocks that i took a major short position in before it got added to the s p years ago. Watched it go up 1,000 , i started at 48 and watched it go to 280 and had to wait for it to blow up, took me two years to get my money back. The important levin to any investor is when youre short theres unlimited down side. Now, since then yahoo has not created any wealth for any shareholders, it has never distributed any distributions of capital and its been a pretty painful story. This week i think itidnt get better. Not because of the executive leading, but what i learned in listening to the ceo along with the chairman is that really theyre managing a structured product thats trading at a discount to its Net Asset Value and you dont know after that conversation what theyre going to do with it. I have no idea what this company is worth. So far there has been no creation of value of the old core yahoo. What did you make of the decision, surprise or not, to keep alibaba but to spin off the internet unit . I thought that was a difficult choice they had made because what i think now as an investor, lets say trying to find a reason to buy this stock. Here is what i know with certainty after that conversation. Over the last three years no value has been created in the core assets. Theyre trading at zero according to the market. If i want to buy alibaba why would i buy it at a discount inside yahoo, why wouldnt i just i would the stock . Im waiting to figure out what theyre going to do with these assets. Im agnostic to the management or board, is the biggest opportunity is to give this company to somebody else to chop up into pieces and realize the value thats greater than what its trading at right now. Youve got cash, yahoo japan, the old core value in alibaba and the theory is that if you chop them up and sell them youll get 20 or 30 more. At least thats the theory. Unless you tell me youre going to do that the chance im going to buy the stock is zero because there is no added value, no distributions no dividend, how do i get my money back . Isnt that whats really going on right now . If you went to any of the Senior Management or went to the board at yahoo they would go, oh, yeah, we have this great plan for creating value in the core business. I think theyre just trying to kind of optimize, if you will, the break up of the company. Isnt that what theyre thinking at the board meetings . I think what shareholders and what theyre so from u. S. Rated about and i am not long this stock, i have no position in it because i dont know why i would do that. At some point institutional shareholders are going to call the chairman and say, all right, weve had enough, weve watched for the last four years Senior Management and Senior Executives take over 300 million in compensation out of this company and create absolutely no value and when this current ceo gets whacked at the end of the First Quarter which is what i think the timeline is she will take 100 million, too. At what point do you get sick of it as a shareholder . You get nothing in return. The best course is to chop it up. I think the frustration factor is palatable, you can start to sense t there is a lot of angst out there and thats why these optionees, these employees are jumping ship. Theres a reason rats jump out a spin they feel its sinking. Kevin, First Quarter of the year they just came out together the board is fully supporting mara meyer, they did the interview together, she said shes going to be here, he has full confidence in here, that is a statement they came out together on this. Thats what you say when you are the chairman until the day you fire here and say shes looking for new opportunities. What else can you say . Well see. As a boss once said to me we love you until we dont. They were sitting very far apart i have to say on the table. Yes, thern. Had to fit the whole logo in there. Shark tank investor, kevin oleary. Time for a cnbc news update with sharon epperson. Here is whats happening at this hour. Secretary of state john kerry returning to the climate negotiations after staying late last night. He celebrated his 72nd birthday by holding immediatings with indias environmental minister and u. N. Chief ban kimoon. The talks have been extended until tomorrow. The family of a 17yearold shot to death by a chicago Police Officer speaking out for the First Time Since video of the shooting surfaced. Family members of the Laquan Mcdonald thanking those who marched in the city demanding justice. They called for change from the top down. A rare 1952 Mickey Mantle rookie card was sold at cause of action for a cool 500,000. It is viewed as one of the most valuable postwar baseball cards ever produced. And a couple from england are celebrating their 90th wedding anniversary. They are 110 and 103 years old. They tied the knot in india in 1925 when the country was still under british rule. They moved to england 40 years later. Their son says they never argue. Thats the cnbc news update at this hour. Back to you. I have to try that one, never argue. Can you imagine . Never argue. So she got married when she was 13, is that the math . That is the math. That is the math. It was india in 1920 or something. Migrate grandmother got married at 13. So you give them gold at 50, what do you give them at 90 . Green bananas . Theyre making the poor people live in bradford, thats bad enough. I think were done on that now. Thanks, sharon. The dow dropping 310 points today, volatility, very much back in the market ahead of next weeks fomc meeting, will todays selloff affect the feds decision on rates . Larry kudlow weighs in when we come back. We can help guide your investments through od times and bad. For over 75 years, our clients have relied on us to bring our best thinking to their investments so in a variety of market conditions. You can feel confident. In our experience. Call a t. Rowe price retirement specialist or your advisor. To see how we can help make the most of your retirement savings. T. Rowe price. Invest with confidence. Lets take a look at how we finished the day on wall street. It was an ugly one with the dow falling 309 points, the s p falling almost 2 , the nasdaq falling 2. 2 , oil was at the center of the Action Trading down more than 3. 9 there, breaking the low, that 36 a peril, worst week for the s p since the middle of august, worst week for the dow and nasdaq in a month, brings the s p to levels we havent seen since october, bill. And the volatility index up more than 22 today. Well above that 20 level with all this volatility. As we all know the fed is set to meet next week, many people feel a rate hike is lk baked into these markets but could the selloff affect the feds decision. Joining us to weigh in larry kudlow. Larry will it ever be a good time to raise rates . Yeah, it will be sometime, i suppose, i dont think now is the time. By the way, just to cut in, bill griffeth, the answer is never argue with your wife. There you are. Happy wife, happy life. Weve been weve been through this and thats the answer. All right. Now, to the other question which is not necessarily more important but its another question. Ive been arguing week after week there is more tee flags than inflation, oil is town, gold down, commodity indexes down, copper is down, Inflation Expectations in the treasury market a down. If this is a normal period and you saw oil crashing and all these other commodities youd probably ease not tighten. So if theyre going to do it i dont fight the tape on that i wish they wouldnt and when they do this they ought to just say, we will move at the pace of an injured snail. Id like them to put that in the directive. Which a lot of people expect them to say. The problem at this point with them not moving is they have signaled to the market that they have going to move. All the messages from key fed members are that theyre ready to go, the possibility in the bond market is more than 70 they will hike Interest Rates. Wouldnt that be shocking and alarming if they didnt go next week with all these expectations set in . You have a point there. I agree. Youve come up to the end of the land, the end of the cliff, there be the dragon. So the fed has got to to something having talked about it for the last couple of youre probably right. I wish they wouldnt but youre probably right. What id like to hear is, okay, were going to do it, we want to reclaim our manhood or woman hood in this case but thats it, no more so forecasts, no fed president , we dont know, we might not do another move in the Interest Rate until next summer. Id like them to say that. Larry. Larry, its devin, i have a question. Is the oil price for you is that a tell on Global Growth or is that just a product of saudi and opec policy . I think its both and dont forget the frackers are still fracking. America Still Producing 9. 2 Million Barrels a day, 9. 3, thats a big number, the World Economy is lousy, youre right, opec decided to go for market share instead of tightening production. Youve got all these things in the next im not sure thats going to change. I mean, have we hit bottom on oil . I dont know that we necessarily have and thats to me in the long run, i know not everybody agrees, in the long run Lower Oil Prices is terrific for all these economies, absolutely terrific. So i might be a seller now in the stocks but i would be a longterm buyer of stocks. Not only that not only that it damages all our enemies. Russia, iran, what a pity. Okay. So i dont know if youve seen this yet, this tweet from prince bintalal, the legendary saudi prince who is a terrific investor, huge position in citi group. Today he tweeted about donald trump and i want to get your thoughts on this. You can imagine whats coming. He wrote he tweeted, quote, you are a disgrace not only to the gop but to all america. Withdraw from the u. S. President ial race as you will never win. Your comment, larry . Well, okay, i will leave the political opinions to the prince. What i will say, bill, its a very serious issue and ive been thinking a lot about this. I believe right now in a time of war with whats happened in paris and california and there will be more, not on the basis of religion, this is where i disagree with mr. Trump, but i believe that the visas should not be waived. We should shut down the visas and do the best we can hit down immigration until jim comey, the fbi head, tells us that we have the information and the folders and we have a decent process. You know me, im an immigration reformer, im usually not an immigration restriction nis, but right now, right now, not on the basis of religion, everybody, everybody, shut it down. No more visas, no more immigration until we can figure this story out. We are at war and we just acknowledge that and act accordingly. Weve done this in the past we need to do this right now. Im sorry, mr. Trump went into religion, i am truly, but i think the bigger point is a correct point. We need to close down their waiver processes and the immigration process, maybe just a year, thats fine, but i would ke to see us do that. We are at war. All right. Thanks, larry. My pleasure. See you larry. My best to your wife. Who is very happy apparently. They are a wonderful couple. Oil falling today after the International Energy agency warned oversupply could worsen next year. Up next a top analyst will tell us what other commodities in the Energy Complex are seemingly in freefall right now. Why you should be paying attention. Youre watching cnbc first in business colder wide. Like a custom screener on your desktop, that updates to all your deworld wide. Wide. And you can share it with one click. Business worldwide. Easy. We combined every birthday and holiday into one celebration. different holidays being shouted back to work, guys i love this times of year. For all the confidence you need. Td ameritrade. You got this. Look at that, that decline, wti crude dipping to its lowest level since 2009, below 36 a barrel today, we are at 35. 27. Lets get to tom kloza. Your thoughts on what we saw in the Energy Market this week and today and what else youre worried about within the Energy Complex. Im not so much worried about it, i think it was a compelling week. It looks as though the technicians are in charge of crude and they are going to test those december 2008 financial crash lows. I have mentioned im not in the sub 30 camp but i may be wrong when it comes to that. The most interesting thing to me is a little bit off the radar but the middle of the barrel, diesel fuel, heating fuel, jeet fuel we are seeing the lowest prices since the Second Quarter of 2004. If you are a home that uses heating oil or if you are an airline or if you are a flee youre really going to be the beneficiaries of these 11year lows. Tom, you mentioned the that technicians seem to be in charge of this market right now. It seems to be the technicians are also telling you to get short because theyre Short Interest right now in crude looks pretty overwhelming, lopsided trading. I guess that would at least some point set you up for some kind of a bounce, but in general what are going to be the makings of this commodity carving out some kind of a sustainable floor . I think el nino has to sort of moderate a little bit and we have to get some Winter Weather across the Northern Hemisphere and that will help on the distillate side. Gasoline margins are pretty good for refiners right now, in fact, they are terrific for december. El nino has turned into e el cabong, but i think there will be a winner and we will have pretty good demand for refined products. The real problem comes in march and april when the refineries go into maintenance and turned around. Thats when we may see crude oil retest the lows that were established in month and we might see gasoline prices actually scream higher. Im curious, tom, as to when what were seeing in the u. S. , the adjustment to low oil prices is going to matter to the markets. For instance, u. S. Oil drillers cutting rigs for the 14th week in 15 this time by double digits last week, the fact that all these Major Energy Companies are cutting their Capital Expenditures for next year, production actually coming off line in the u. S. To adjust. We be does that matter . I think it matters towards the end of next year and i do think that the consensus few that Shale Oil Production is going to drop by 400,000, 500,000 barrels a day is appropriate. The wild card is growth, will we see growth of 1. 5 Million Barrels a day next year. There were products funded in 2010 and 11 when prices were much higher and that production is coming on in nonopec countries next year. Its a real bulia base any way you look at it. There are analysts who feel the airlines you mentioned the decline and benchmark for jet fuel that the airlines are young up as much benefit they will get from those low prices. I think jet fuel is going to move probably below 1 a gallon, which is a third of what they paid. Im happy to see that theyve added snacks back on united seats so i can pretend to be a banzai tree but snack on pretzels there. Suddenly they are worried about Customer Service right now. They are the beneficiaries, there is no question about it. Tom, good to see you, appreciate it. Take re, ys tomrowkloza. I look at these things tha comeiantsided trades. Everybody is so natenl. Record number of shorts. Unless opes somng e rn not to be. Right. You always have to wond, we have to take a break here ndeema mods the s oned d j reporting that hedge fund stone leapitals suspending redemptions in its oldest fund that focuses on distressed debt due to losses. The report also indicates that stone line Portfolio Fund received substantial redemption request. We believe they manage 1. 3 million focusing on distressed debt. Those are the headlines for right now. For now back to you. The news just keeps coming into there was something that made mike santoli go, hum. Its not a real big one, but if the distressed market is frozen this is whats going to happen. Exactly. This is what we were getting at last hour, is the third avenue of slow redemption the beginning of a new trend here . Its the beginning of something perhaps. Two times is a questions dense third time becomes a trend. Individual investors in that mutual fund the third avenue fund said give me my money back. What youre basically saying its been a stampede out ofs these funds for good or bad reasons and they cant meet the redumpings its not as if some Early Detection device said there might be trouble in junk bonds. Its not corporate credit, either, hedge funds have had a hard year over call. Oh, sure. Good thing we have you here. We will get thats why he is here. We will get you ready to navigate. Well get you ready for what could be another volatile week, he said, in the markets coming up. China stocks getting hit hard today. Key Economic Data came out today that could create more volatility on monday. Well talk about all of that next on closing bell. Stocks in asia had their biggest drop and seema moody has the details. Currencies are reacting as well. The yuan hitting a fourandahalf year louf. The concern is that beijing will continue to let their currency weaken. Retail Sales Numbers and retail production data due on saturday. They will help us understand if the worlds second largest economy will lead to a consumption lead model and if the measures put forward by the bank are going through. And the Broader Market to assess the impact of a potential fed rate rise, particular ri the economies that carry a lot of high denominated debt. Who releases key Economic Data on a saturday . We should talk about doing that here. I dont know if you want to work on saturday. Want kids to go to school all summer, too . They talked about a way theyre going to manage the chinese currency as a basket. One of the things that fascinated me today is how heavily correlated all of these markets are together. Years ago, people forget like 20 years ago, different economies had different dynamics. Now its like they rise and fall together. That is probably not a good thing, but. That is a final crisis fe n phenomenon, right . No the institutions, theyre linked, the economies are global and theyre all linked. Will we care as much about china on monday when were thinking about the fed . The more pain that china feels is worrisome on the brink of a Federal Reserve meeting when there is worry about outflows from emerging markets like china. You want to weaken in part in preparation for the fed. The fed statement, earnings, Economic Data, three major things that will weigh on the market. Well tell you what to be watching for when we come back. Y r companys data is secure, the possibility of a breach can quickly become the only thing you think about. Thats where at t can help. At at t we monitor our Network Traffic so we can see things others cant. Mitigating risks across your business. Leaving you free to focus on what matters most. Today, were seeing new technologies make healthcare more personal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. No question it was a rocky week on wall street. If youre bullish it could be ahead of a historic week ahead of a historic meeting. Before we preview the week, guys, i want to go back to this story of the dow jones reporting a 1. 3 billion hedge fund that is suspending because of redemption requests. Is this a preview . There will definitely be more. There is a lot of big money out there, who want to see absolutely, shareholders will want to redeem. They have to be far in advance, it is a process in place. You mentioned there is never a perfect time for the fed to raise rates. Does this become an evenless perfect time if we start to see this become a time next week. This would have happened even if they moved in september. But you cant tighten into a junk bond market that is collapsing. It is not collapsing, it is distressed debt and blood in the water. People want this to happen. And not to mention what is happening in their pockets is distressing too. Brian sullivan is back now with fast money. Live from the Nasdaq Market side overlooking times square. Im Brian Sullivan in for melissa tonight. Your traders, tim seymour, brian kelly, and guy adomi. Tonight, karl icon says the market is a keg of dynamite, and bank of america agrees. What one high yield analyst is saying the credit market is about to do and why the panic may get worse. From fang to dang. One of wall streets biggest