MARIA:
WELCOME BACK.
BETWEEN TENSIONS OVER TRADE WITH
CHINA, TECHNOLOGY STOCK
STRUGGLES AS WELL AS THE
GOVERNMENT SHUTDOWN FEARS, A
BOOMING U.S. ECONOMY AND A SHIFT
IN POWER IN CONGRESS, IT'S BEEN
A VOLATILE YEAR FOR BUSINESS.
SO WHAT WILL 2019 BRING FOR THE
ECONOMY, THE STOCK MARKET AND
YOUR MONEY?
TO MY ALL-STAR PANEL, HOST OF
FBN A.M. LAUREN SIMONETTI AND
THE HOST OF AFTER THE BELL,
CONNELL McSHANE.
LOVE TALKING TO MY COLLEAGUES.
WHAT DO YOU THINK ABOUT THE YEAR
AHEAD?
IT'S BEEN A GREAT YEAR IN TERMS
OF THE ECONOMY, BUT NOW THERE'S
ALL THESE WORRIES THAT THINGS
ARE GOING TO SLOW DOWN.
>> WE STARTED 2018 SO STRONG.
REMEMBER THE WORLD ECONOMIC
FORUM?
I THOUGHT THE BUZZWORD OF DAVOS
WAS SYNCHRONIZED GLOBAL GROWTH.
MARIA: YOU'RE RIGHT, EXACTLY
RIGHT.
>> AND THEN IT BECAME, WELL, THE
U.S. IS STRONGER THAN THE REST
OF THE WORLD, AND NOW IT'S A
SYNCHRONIZED GLOBAL SLOWDOWN,
AND I THINK THAT GOES INTO AT
LEAST THE FIRST HALF OF 2019,
BECAUSE WE HAVE BIG ISSUES THAT
DON'T HAVE RESULTS, AND WE'VE
GOT THREE NEW ISSUES HANDED ON
OUR PLATES THIS WEEK; THE
PULLOUT OF SYRIA, THE FED HIKING
INTEREST RATES, TWO MORE NEXT
YEAR, AND WHAT HAPPENS WITH
SPENDING AND THE GOVERNMENT
SHUTDOWN AND THE BORDER WALL.
MARIA: YOU'RE ABSOLUTELY RIGHT.
>> I THINK IT'S, IF YOU THINK
ABOUT THE DIFFERENCE BETWEEN
WHEN PRESIDENT TRUMP TOOK OFFICE
AND NOW JUST IN TERMS OF THE
OVERALL ENVIRONMENT, WHEN HE
CAME IN, ONE OF THE FIRST THINGS
HE DID -- A LOT OF MARKET
PARTICIPANTS WOULD SAY ONE OF
THE SMARTEST THINGS HE DID -- HE
CREATED THIS ENVIRONMENT THAT
BUSINESSES WERE HAPPY WITH, A
BUSINESS-FRIENDLY ENVIRONMENT BY
CUTTING TAXES AND REGULATIONS.
AND NOW I THINK FROM TALKING TO
PEOPLE WHO INVEST A LOT OF
MONEY, IF ANYTHING, THE
PRESIDENT AND HIS ADMINISTRATION
ARE CONTRIBUTING TO THE
UNCERTAINTY THAT'S OUT THIS FOR
MANY -- YOU KNOW, BECAUSE
THEY'RE SO INVOLVED IN MANY OF
THESE ISSUES THAT LAUREN JUST
MENTIONED.
CHINA TRADE, OBVIOUSLY, FIRST
AND FOREMOST, BUT EVEN THE
FEDERAL RESERVE WITH THE BACK
AND FORTH BETWEEN PRESIDENT
TRUMP AND JAY POWELL.
THE FED KIND OF HOVERS OVER
EVERYTHING, AND WHAT HAPPENS
WITH THOSE ISSUES THE FED,
HOPEFULLY, WILL REACT TO.
TO ME, NUMBER ONE, CHINA TRADE
IS THE BIG ISSUE.
IF IT DRAGS ON FOR A LONG TIME,
MAYBE THE FEDERAL RESERVE
DOESN'T HIKE AS AGGRESSIVELY IF
THE PRESIDENT -- AND I THINK
THIS IS PROBABLY THE LESS LIKELY
SCENARIO FINISH CUTS A DEAL IN
THE SHORTER TERM, THEN MAYBE THE
FED KEEPS HIKING INTEREST RATES.
BUT THEIR ALL KIND OF RELATED.
>> AND WHAT DO YOU OWN THAT'S
FED-PROOF, CHINA PROOF?
WHAT SECTOR IS THAT?
I DON'T KNOW.
MARIA: YEAH.
WELL, THE ISSUES FOR THE MARKET
HAVE BEEN SO WIDE AND DEEP THAT
WE'RE SEEING THESE WILD,
VOLATILE MOVES, DOWN 500, UP A
COUPLE HUNDRED, THEN DOWN 600
AGAIN.
IT FEELS LIKE THAT'S GOING TO
CONTINUE INTO THE FIRST QUARTER.
WHAT DO YOU THINK?
>> A LOT OF PEOPLE SAY THAT'S
THE ALGORITHMS IN THE COMPUTER
TRADING.
MARIA: I'M NOT BUYING THAT.
>> OR IT'S CAPITULATION.
AN OVERSOLD MARKET BECOMES AN
OVERSOLD MARKET.
>> LET'S JUST SAY IT WAS THE
ALGORITHMS AND THE COMPUTER
TRADING.
WHAT ARE THEY REACTING TO, OR
WHY ARE KIND OF HUMANS TAKING A
STEP BACK AND ALLOWING THOSE
ALGORITHMS TO RUN THE MARKET?
IT'S BECAUSE OF THE UNCERTAINTY
THAT WE TALKED ABOUT.
SO IF YOU'RE ON THE WRONG SIDE
OF THE CHINA TRADE AND YOU HAD
IT WRONG FOREVER, AT SOME POINT
AT THE END OF 2018, YOU KIND OF
JUST STEP BACK FOR A LITTLE
WHILE AND SAY, WELL, I WAS
WRONGING I'VE GOT TO FIGURE OUT
WHAT'S NEXT.
I WOULD ADD THE POLITICAL
UNCERTAINTY WITH THE MUELLER
INVESTIGATION BECAUSE YOU DON'T
REALLY KNOW WHAT'S NEXT.
MAYBE YOU WERE CAUGHT OFF GUARD
BY SOME OF THIS STUFF, YOU DON'T
KNOW HOW MUCH THAT AFFECTS SOME
OF THESE COMPANIES EARN.
IN YOUR HEAD YOU SAY IT MIGHT
NOT, BUT MAYBE IT DOES BECAUSE I
WAS WRONG ABOUT OTHER THINGS.
SO I THINK THAT'S KIND OF THE
ENVIRONMENT.
ONE OTHER THING IN TERMS OF
SECTORS AND INDUSTRY GROUPS IS
TECHNOLOGY'S GOING TO BE
FASCINATING TO WATCH IN 2019
JUST BECAUSE OF BIG TECH BEING
IN THE CROSSHAIRS OF JUST ABOUT
EVERYBODY.
IT'S NOT JUST FACEBOOK, IT
STARTS THERE, BUT OTHER
COMPANIES, YOU'RE GOING TO HAVE
WASHINGTON AFTER THEM.
THOSE ARE THE GROUPS THAT DROVE
THE MARKET IN 2018.
>> YEAH.
MARIA: WE MIGHT SEE NEW
REGULATION FOR TECHNOLOGY --
>> I THINK WE ARE.
MARIA: -- BECAUSE OF THE PRIVACY
BREACHES.
>> ABSOLUTELY.
WHAT THAT LOOKS LIKE, NOBODY
KNOWS.
BUT I WAS COMPETED ABOUT,
BECAUSE OF THE SO-CALLED FANG
STOCK, THEY'VE FALLEN, ABOUT THE
NEW TECH LEADERSHIP THAT COULD
COME UP IN 2019 WITH SOME
IPOs.
UBER, LYFT, AIRBNB, POPULAR,
ARGUABLY NOT PROFITABLE YET,
COMPANIES.
BUT THIS COULD HAVE BEEN THE NEW
TECH LEADERSHIP.
BUT RENAISSANCE IPO SAID EARLIER
IN THE WEEK THAT THE IPO MARKET
FOR THE FIRST HALF OF 2019 IS,
QUOTE, CLOSED.
MARIA: YEAH.
>> SO WHAT DO YOU GET EXCITED
ABOUT?
MARIA: WELL, IT'S CLOSED
INITIALLY BECAUSE OF WHAT
HAPPENED AT THE END OF THE YEAR.
I MEAN, THE MARKETS REALLY
TURNED NEGATIVE.
I WAS REALLY SURPRISED THAT YOU
HAD SO MANY IPOs READY TO
LAUNCH EVEN IN THE FACE OF
TROUBLED MARKETS, BUT THEN AT
THE END OF THE YEAR SOME PEOPLE
CHANGED THEIR MINDS, SOME ARE
SITTING ON IT.
CERTAINLY, 2019 DOES LOOK LIKE A
GOOD YEAR FOR IPOs.
THERE ARE A LOT COMING OUT.
>> I HOPE I'M WRONG AND IT WILL
BE, AND I HOPE KATHY IS WRONG,
BUT A LOT OF THOSE COMPANIES
FORMED DURING THE RECESSION.
SO IT WAS GREAT TO, YOU KNOW,
THEY WERE THE DARLINGS, THE
UNICORNS, AND THIS WAS THEIR
TIME TO REALLY MAKE THEIR DEBUT,
AND THERE'S A QUESTION MARK
HANGING OVER IT NOW.
>> THE ONE THING THAT KIND OF
STRIKES ME, THIS IS NOT ANY KIND
OF BREAKING OBSERVATION, BUT
WHILE WE'RE ALL SPEAKING, THE
THICK THAT KIND OF HITS ME IS,
BOY, I WISH I WAS ABLE TO AVOID
BEING ON THIS SEGMENT, OR I WISH
WE WEREN'T TAPING THEM, BUT TO
YOU IMAGINE IF WE WENT BACK AND
LOOKED AT --
[LAUGHTER]
MARIA: WE CHECK ON IT.
>> WE REALLY HAVE NO IDEA.
AND I THINK THIS YEAR MORE THAN
MOST THAT'S KIND OF THE THEME.
THE UNCERTAINTY AT THE END OF
2018, WE REALLY HAVE NO IDEA
WHAT'S GOING TO HAPPEN CAN WITH
CHINA.
IT'S HARD TO MAKE AN INFORMED
GUESS ON SOME OF THESE THINGS
BECAUSE THERE'S BEEN SO MUCH
BACK AND FORT.
MARIA: THESE ARE BIG ISSUES,
THEY'VE BEEN STEALING IP AND
FORCING TECHNOLOGY TRF.
YOU HAVE TO ASK YOURSELF IS
THERE AN OPPORTUNITY TO ACTUALLY
BROADEN OUT THE PORTFOLIO AND
MAYBE PUT SOME MONEY INTO THE
SHORT END OF FIXED INCOME,
BECAUSE IF YOU'RE GOING TO GET
3% ON THE TEN-YEAR OR 3% EVEN ON
THE TWO-YEAR, MAYBE IT DOES MAKE
SENSE TO CARVE OUT SOME MONEY
OUT OF THE STOCK MARKET AND PUT
IT THERE.
I DON'T KNOW.
BUT AS RATES GO HIGHER, THAT
CREATES AN ALTERNATIVE TO
EQUITIES.
>> IT DEFINITELY DOES AND
SHOULD.
I THINK THE FED WILL ADD TO THAT
UNPREDICTABILITY A LITTLE BIT
TOO BECAUSE I KNOW EVERYBODY
AFTER JAY POWELL'S NEWS
CONFERENCE WAS FOCUSED ON KIND
OF THIS OUTLOOK THAT WASN'T AS
DOVISH AS THEY THINK.
BUT AT THE SAME TIME, IT DIDN'T
RESONATE, BUT HE DID SAY OVER
AND OVER HE TRIED TO SAY WE'RE
DATA-DEPENDENT.
SO AS QUICKLY AS THE FED PUT
THIS OUTLOOK OUT, TO ME, AT
LEAST, IT COULD FLIP BACK THE
OTHER WAY IF SOME OF THESE
ISSUES END UP GOING DIFFERENTLY.
MARIA: YEAH.
>> IF THERE IS A DEAL CUT WITH
THE CHINESE ON TRADE OR SOME OF
THE GLOBAL GROWTH PROJECTIONS
ARE DIFFERENT -- I THOUGHT THE
FED COULD FLIP IT AROUND.
I THINK THEY ARE MORE FLEXIBLE
THAN PEOPLE ARE GIVING THEM
CREDIT FOR.
AT LEAST THAT'S WHAT I THINK.
MORE MORE SO THE YEAR AHEAD,
WE'RE LOOKING TO CHINA, WHAT
ELSE IS IMPORTANT?
>> LEGALIZATION OF MARIJUANA
MIGHT ACTUALLY HAPPEN IN 2019.
>> IS THIS A HOPE OR A
PREDICTION?
>> IT'S ACTUALLY NOT A HOPE.
I HOPE IT DOES NOT HAPPEN,
THAT'S MY STANCE, BUT THERE'S
MONEY TO BE HAD.
THE INSIDE FOLKS HERE WITH SKIN
IN THE GAME, AND WE'VE SEEN ALL
THE WHO'S, WHAT COMPANY'S TRYING
TO GET INTO WHAT COMPANY, THEY
PREDICT IT'S GOING TO BE A $50
BILLION MARKET BY 2026, AND IT'S
ONLY GOING TO EXPAND BECAUSE IF
IT'S FEDERALLY LEGAL, YOU HAVE
ACCESS TO BANKING, CREDIT CARDS.
>> THAT'S A GOD ONE.
>> GOOD ONE?
[LAUGHTER]
MARIA: MAKING THIS BIG STAKE IN
VILE, THE E-CIGARETTE MAKER, AND
THEN GIVING THAT ENORMOUS BONUS
TO ALL OF THE JEWEL EMPLOYEES.
EACH EMPLOYEE LOOKING AT A
MILLION DOLLAR BONUS.
HOW GREAT IS THAT?
>> WHAT ABOUT THE --
[INAUDIBLE]
[LAUGHTER]
MARIA: EXACTLY.
IT'S GREAT TO SEE YOU BOTH.