SLIGHTLY OFF THE HIGHS OF THE
SESSION, UP 6% FOR TESLA.
I DON'T KNOW IF DENNIS GARTMAN
HAS A TESLA BUT WE WILL BRING
HIM IN.
DENNIS, WE SAW THIS.
THE BULLS MAY BE BREAKING OUT
THE CHAMPAGNE ON WALL STREET BUT
THERE'S THIS SURVEY, I DON'T
KNOW IF YOU SAW THIS, IT MAKES
ME WONDER, THERE ARE A RECORD
NUMBER OF FUND MANAGERS MAKING
THE PREDICTION THAT THE GLOBAL
ECONOMY IS ON ITS LAST LEGS.
COMES OUT OF BANK OF AMERICA
MERRILL LYNCH, MONTHLY SURVEY OF
INVESTMENT MANAGERS, FOLKS WHO
RUN ABOUT $684 BILLION WORTH OF
ASSETS.
MORE THAN A THIRD OF THEM ARE
EXPECTING A SLOWDOWN NEXT YEAR.
I BELIEVE THAT'S THE WORST
OUTLOOK SINCE THE FINANCIAL
CRISIS IN 2008.
COME IN RIGHT NOW WITH YOUR
THOUGHT, PLEASE.
IT'S TOO MUCH TO SAY FOR ME, TOO
BROAD TO SAY WE ARE IN THE LATER
STAGES OF THE GROWTH PSYC
STAGES OF THE GROWTH CYYC
STAGES OF THE GROWTH CYCLE.
CUT TO THE CHASE.
WHERE ARE WE, BULL, BEAR, ON THE
PRECIPICE OF A BEAR, REALLY
NARROW IT DOWN FOR US.
>> WE ARE IN THE VERY LATER
STAGES OF AN ECONOMIC UPTURN,
THERE'S NO QUESTION ABOUT IT.
THE FED IS GOING TO TIGHTEN
PROBABLY TOO MUCH, TAKE THE
YIELD CURVE TO AN INVERSION.
WE HEAR THAT TALK ALL THE TIME.
THAT'S WHAT THE FED INTENDS TO
DO OR WILL END UP DOING.
I THINK WE WILL BE IN A SLOWDOWN
OF SOME SORT BY SOME TIME LATE
NEXT YEAR, MAYBE A LITTLE BIT
EARLIER THAN THAT.
UNTIL THEN, THE ECONOMY IS STILL
VERY STRONG FOR NOW BUT IT SHALL
WEAKEN NEXT YEAR AND STOCK
MARKETS GO DOWN BEFORE ECONOMIES
TURN DOWN.
STOCK MARKETS GO UP BEFORE
ECONOMIES TURN UP.
I THINK WE HAVE SEEN THE HIGHS
IN STOCKS IN GLOBAL TERMS.
WE MAY BE SEEING THE HIGHS IN
STOCKS HERE IN THE UNITED STATES
AND I THINK IT'S WISE IF YOU ARE
AGGRESSIVELY LONG TO BE LESS
LONG.
I THINK IF YOU ARE NOT LONG, I
THINK IT'S TIME TO GO TO THE
SIDELINES.
I THINK WE HAVE STARTED A BEAR
MARKET GLOBALLY AND THE UNITED
STATES HAS BEEN ABLE TO OFFSET
THAT GLOBAL BEAR MARKET BY
MOVING HIGHER BUT I THINK THAT'S
OVER.
LIZ: OKAY.
SO I'M GOING TO PUSH YOU HERE.
AS YOU SAID, THE TWO BIFURCATE.
THE ECONOMY, STOCK MARKET, TWO
DIFFERENT THINGS.
THE S&P 500, 250 OF THE NAMES
ARE NOW DOWN AS OF YESTERDAY
20%.
ANOTHER HUNDRED OR SO ARE DOWN
SOMETHING LIKE 40%.
DOES THAT MEAN WE ARE IN A BEAR
MARKET AND NOBODY REALLY
REALIZES IT YET?
>> I THINK WE ARE IN A BEAR
MARKET, NOBODY REALLY REALIZES
IT YET.
LIZ: HOW CAN WE HAVE 484 POINTS
IN GAINS FOR THE DOW RIGHT NOW
AND BE IN A BEAR MARKET?
>> YOU LOST 2,000 DOW POINTS
LAST WEEK.
SO A BOUNCE OF 480 POINTS IS
REALLY NOT THAT TERRIBLY
CONSEQUENTIAL.
WHAT'S REALLY IMPORTANT, WHAT I
WILL PAY ATTENTION TO THIS
AFTERNOON, IS WHAT'S THE VOLUME
LIKE ON THE UPSIDE.
IF THE VOLUME --
LIZ: IT'S 9% BELOW THE ONE-MONTH
AVERAGE.
LAST WEEK IT WAS 30% TO 36%
ABOVE THE ONE-MONTH AVERAGE.
>> THAT TELLS YOU ALL YOU REALLY
NEED TO KNOW.
VOLUME SHOULD FOLLOW THE TREND
AND IF VOLUME IS DOWN ON AN UP
DAY LIKE THIS, WHEN VOLUME
EXPANDED DRAMATICALLY LAST WEEK
ON THE DOWNSIDE, THAT HAS TO
TELL YOU BE VERY CAREFUL.
BE LESS INVOLVED, USE THE
STRENGTH TO BECOME LESS
INVOLVED, USE THE STRENGTH TO
SELL INTO.
I THINK THAT'S THE WISE CHOICE
OR WISE COURSE OF ACTION FOR THE
NEXT SEVERAL WEEKS AND CERTAINLY
THE NEXT SEVERAL DAYS.
>> CHARLIE GASPARINO HERE.
>> HEY, CHARLIE.
>> HOW ARE YOU?
SAY HELLO TO YOUR DAUGHTER FOR
ME.
GOOD KID.
>> I SHALL.
>> THE BULL CASE FOR THE MARKET
IS THAT THE TAX CUTS, MASSIVE
CORPORATE TAX CUTS, AREN'T FULLY
FACTORED INTO THE ECONOMY AT
LEAST, MAYBE THE MARKET, BUT THE
ECONOMY, THAT THE GROWTH
PROSPECT OF COMPANIES WILL
EXPAND EVEN GREATER IN THE NEXT
YEAR BECAUSE OF THOSE TAX CUTS,
THE SUPPLY SIDE IMPACT HASN'T
YET KICKED IN.
HOW DO YOU ADDRESS THAT?
BECAUSE SUPPLY SIDE IMPACT
USUALLY TAKES SIX MONTHS, A YEAR
TO FULLY FACTOR INTO THE
ECONOMY.
>> CHARLIE, DON'T STOCK MARKETS
ANTICIPATE AND DISCOUNT THAT
SORT OF ACTIVITY.
EVERYBODY KNOWS THE TAX CUTS
HAVE GONE INTO EFFECT.
THERE'S NO NEW NEWS TO THAT
EFFECT.
WE MAY GET NEW TAX CUTS WHICH I
DOUBT.
WE WOULD NEED THAT TO KEEP THESE
THINGS GOING HIGHER.
TO ME WHAT'S MOST IMPORTANT OF
ALL IS THE FUEL FOR THE STOCK
MARKET.
THE ADJUSTED MONETARY BASE HAS
BEEN DECLINING NOW SINCE 2015.
THE FED HAD GONE OUT OF ITS WAY
TO SUPPLY FUEL TO THE SYSTEM.
NOW IT'S TAKING THAT FUEL AWAY.
>> YOU'RE SAYING THE REVERSE OF
QE, FORGET ABOUT FED FUNDS RATE.
>> EXACTLY.
>> ON THE LONG END, WHICH COULD
REALLY LEAD TO MUCH HIGHER
INTEREST RATES.
>> EXACTLY.
THAT'S WHAT I'M VERY CONCERNED
ABOUT.
WE NEED TO ROLL OFF THAT HUGE
INCREASE IN THE ADJUSTED BASE.
IT WENT FROM 800 BILLION -- GO
AHEAD.
I'M SORRY.
LIZ: CAN WE JUST END ON HOW DO
YOU INVEST?
SURELY THERE'S ALWAYS A TRADE,
IS THERE NOT?
SO IS YOUR PERSPECTIVE, HOW AND
WHERE DO YOU PUT THE MONEY?
>> I THINK YOU PUT IT IN --
THERE ARE A LOT OF BOND FUNDS
THAT ARE LISTED THAT HAVE GREAT
LIQUIDITY THAT PAY 6%, 7%, 8%.
THEY PAY DIVIDENDS ON A MONTHLY
BASIS.
THAT'S THE CLOSEST THING TO
CASH, THE BEST PLACE FOR PEOPLE
TO GO TO.
I THINK THAT'S WHERE YOU SHOULD
HIDE THE NEXT SEVERAL MONTHS.
LIZ: JUST GOT NEWS FROM CHARLIE
BRADY.
I WILL WHISPER THIS.
THAT VOLUME I SAID WAS 9% BELOW
THE ONE-MONTH AVERAGE IN THIS
LAST HALF HOUR, IT IS NOW 15%
BELOW THE ONE-MONTH AVERAGE.
>> NOT A GOOD TIME.
>> THE TRANSLATION IS NO
CONVICTION ON THE UPSIDE, YOU'RE
SAYING.
>> THAT'S EXACTLY, CHARLIE,
EXACTLY RIGHT.
THERE'S NO CONVICTION ON THE
UPSIDE.
THERE WAS CONVICTION LAST WEEK
ON THE DOWN SIDE.
YES, INDEED.
THE DOW IS UP 500 POINTS BUT IT
WAS DOWN 2,000 POINTS LAST WEEK