DECISION AND OF COURSE WHAT WE
JUST HEARD FROM JEROME POWELL.
NOW TO THESE MARKETS, EVERYBODY.
I MEAN THIS HAS BEEN A WILD
RIDE.
YOU’RE PROBABLY USED TO IT IF
YOU WATCH THE SHOW EVERY DAY.
HERE’S THE ALERT FOR YOU RIGHT
NOW.
THE FEAR GAUGE IS SINKING.
THAT’S THE VOLATILITY INDEX, THE
VIX, WE TALK A LOT ABOUT IT.
THERE’S THE MARKETS RIGHT THERE.
I WILL GIVE YOU THAT.
THERE’S THE VIX.
THANKS, GUYS.
DOWN ALMOST 13%.
YOU KNOW, THE VIX IF YOU TRACK
IT EVERY DAY, AND I KNOW LIZ
DOES, IT’S HAD AN AVERAGE
BASICALLY SINCE 1990, THE VIX
HAS REACHED AN AVERAGE LEVEL OF
37 WHEN THE MARKET BOTTOMS, BUT
IT SPIKES USUALLY UP TO ABOUT 85
DURING -- ESPECIALLY WE SAW THIS
DURING 2020 WHEN YOU HAD THE BIG
MARCH 2020 SELL OFF, THAT’S WHEN
THE PANDEMIC STARTED, BUT
VOLATILITY NOW FALLING.
MAYBE THAT’S A GOOD THING
BECAUSE AGAIN, YOU ARE SEEING A
STRONG PERFORMANCE IN THE
MARKETS.
DOW UP 564.
AND THEN THE NASDAQ, THIS IS
INTERESTING.
IT IS THE LEADER RIGHT NOW.
IT GOT BATTERED.
DOWN 28% SO FAR THIS YEAR.
BUT RIGHT NO THE NASDAQ IS
ACTUALLY -- RIGHT NOW THE NASDAQ
IS ACTUALLY COMING BACK.
WHAT DOES THAT MEAN?
MAYBE SOME OF THESE BIG CAP TECH
STOCKS THAT HAVE GOTTEN REALLY
SLAUGHTERED THIS YEAR, MAYBE
THOSE GUYS ARE GOING TO BE OKAY.
MAYBE YOU START TO BUY THEM.
I WANT TO BRING IN FOR OUR FLOOR
SHOW, TEDDY WEISBERG JOINING ME
RIGHT NOW AS WELL AS DUTCH
MASTERS, AND TEDDY, TO YOU
FIRST, AND THEN DUTCH, I WILL
GET TO YOU.
TEDDY, YOUR INITIAL REACTION ON
WHAT YOU ARE SEEING RIGHT NOW?
>> WELL, I THINK OBVIOUSLY THE
MARKET LIKES WHAT THEY HEARD,
BUT I THINK -- I DON’T THINK
WE’RE OUT OF THE WOODS YET.
HE MENTIONED THIS TWO OR THREE
TIMES, THAT HE HAS NO CONTROL
OVER ENERGY AND TO A CERTAIN
DEGREE AGRICULTURE, AND QUITE
FRANKLY, I THINK THE BIGGER
PROBLEM FOR INFLATION -- THE
BIGGEST COMPONENT IS ENERGY, AND
ENERGY IS SOMETHING THAT
CLEARLY -- THAT THIS COUNTRY CAN
DEAL WITH IF WE REVERSE, YOU
KNOW, THE ENERGY POLICY THAT’S
BEEN IMPOSED SINCE BIDEN BECAME
PRESIDENT.
ENERGY IS A BIG PROBLEM.
AND THE FOOD IS A BIG PROBLEM,
THANKS, UNFORTUNATELY, TO WHAT’S
GOING ON IN THE UKRAINE.
SO YES, THE MARKET LIKES WHAT
THEY HEARD TODAY, BUT I’M
CLEARLY NOT A BELIEVER.
I THINK ANY RALLY IS PROBABLY
MORE OF A BETTER SELLING
OPPORTUNITY THAN A BUYING
OPPORTUNITY IN SPITE OF THE FACT
THAT STOCKS HAVE BEEN DOWN HARD
NOW FOR THE LAST TWO OR THREE
WEEKS.
WE’RE NOT OUT OF THE WOODS YET,
I DON’T THINK.
>> CHERYL: FAIR ENOUGH, TEDDY.
I THINK YOU ARE RIGHT.
THE OTHER QUESTION, DUTCH,
THERE’S BEEN SO MUCH TALK ABOUT
A RECESSION, WILL THIS
TIGHTENING 75 BASIS POINTS, 50
BASIS POINTS, YOU KNOW, AS WE GO
THROUGHOUT THE YEAR, IS THAT
GOING TO, YOU KNOW, PUSH THE
ECONOMY INTO A RECESSION?
TO BE CLEAR, POWELL DEFENDED THE
ECONOMY ON SEVERAL OCCASIONS,
BUT THAT’S HIS JOB.
>> WELL, I THINK WE’RE ALREADY
PROBABLY IN A RECESSION HERE IN
THE BEGINNING OF ONE, HE SAID
OVER AND OVER AGAIN HE WANTED TO
SEE PROGRESS ON INFLATION.
HE’S NOT GOING TO SEE IT.
THE NEXT PRINT IS GOING TO BE
HOT AGAIN.
WE’RE GOING TO BE A CPI PRINT OF
LIKE 8.75, AND THEN WE’LL
PROBABLY HIT A 9 ON THE NEXT
ONE.
HE’S NOT GOING TO SEE PROGRESS
ON INFLATION.
HE’S USING A TOOL THAT WON’T
WORK FOR THE KIND OF INFLATION
THAT WE HAVE.
AND HE’S CRASHING MARKETS,
WHETHER THEY ARE STOCK, BOND,
CURRENCY MARKETS, EMERGING DEBT
MARKETS, HE’S CRASHING MARKETS
ALL OVER THE PLACE.
HE SAID HE’S WATCHING THE REAL
ESTATE MARKET.
WELL, HE’S GOING TO WATCH THAT
ONE CRASH TOO BECAUSE I KNOW
THAT ALL THE SPECULATORS IN THE
REAL ESTATE MARKET ARE GONE,
GONE, MAN.
SO THEY ARE GONE.
WHAT WE’RE ENTERING INTO HERE IS
A PERIOD OF STAGFLATION.
WE’RE GOING TO BE RANGE BOUND IN
THESE MARKETS.
I AGREE WITH TEDDY.
THIS IS NOT A BOTTOM.
WE’RE GOING TO BE RANGE BOUND
PROBABLY FOR THE NEXT THREE TO
FIVE YEARS.
PEOPLE WHO ARE DOING INDEX
INVESTING OR PASSIVE INVESTING
OR LONG-ONLY INVESTING ARE GOING
TO BE FACED WITH A SQUEEZE, AND
THAT SQUEEZE IS THAT THEIR
ACCOUNTS ARE GOING TO GO
NOWHERE, AND INFLATION IS GOING
TO BE RUNNING 4 TO 7 PERCENT FOR
A WHILE, AND THE FED JUST
ADMITTED THAT TODAY.
SO I THINK THE MARKET IN ITS 5
OR 600 POINT RISE TODAY ON THE
DOW HAS GOT THIS COMPLETELY
WRONG.
I WENT THE OTHER WAY.
I’M SHORTING MORE OF IT BECAUSE
I THINK WE’RE GOING TO GET --
WHEN THE GROWN-UPS COME BACK TO
THEIR DESKS TOMORROW AND SEE
THAT THE FED JUST ADMITTED THAT
INFLATION IS OUT OF CONTROL, AND
THEY ARE GOING TO SEE ANOTHER --
TWO 75 BASIS POINT HITS, THAT
THIS MARKET IS GOING TO ROLL
OVER AGAIN BEFORE WE GET TO A
BOTTOM.
PEOPLE ARE GOING TO HAVE TO
LEARN HOW TO USE INVERSE ETFs
AND TECHNICAL ANALYSIS TO TRADE
SUCCESSFULLY WITHIN A RANGE
BECAUSE INDEX INVESTING AND
PASSIVE INVESTING IS GOING TO BE
DONE.
IT WON’T WORK.
>> CHERYL: WHEN THE GROWN-UPS
COME BACK TO THE TRADING DESK
TOMORROW, I CAN’T EVEN ADD
ANYTHING ELSE TO THAT.
DUTCH MASTERS, WELL SAID.
I MEAN, YOU GOT TO HAVE -- YOU
GOT TO HAVE A SENSE OF HUMOR
WHEN YOU’VE GOT A MARKET THAT
LOOKS LIKE THIS TODAY.
TEDDY WEISBERG, THANKS, GUYS, WE
MAY NEED IT IF YOU’RE BOTH
RIGHT, THAT THIS IS NOT THE END