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CHARLES: WELCOME BACK.
A WILD RIDE FOR THE MARKETS
RIGHT NOW.
STOCKS REVERSING COURSE AFTER
SELLING OFF ABOUT 200 POINTS, SO
WHAT SHOULD YOU BE DOING WITH
YOUR MONEY?
HOW DO YOU WANT TO LOOK AHEAD?
ADVICE ON BUYING THE BOUNCE AND
INCLUDING STOCKS NOT IN THE
MAINSTREAM, NOT BIG MOMENTUM
NAMES YOU'RE USED TO.
EUROPEAN LEADERS ARE QUICK TO
KEEP DOLING OUT FREE MONEY, HOW
DO YOU SPUR AUTHENTIC ECONOMIC
ACTIVITY?
MORE ON THE EUROPEAN PARADOX
LATER IN THE SHOW.
FIRST MY TAKE ON THIS MARKET.
THE STOCK MARKET TAKES INVESTORS
ON A RIDE, HARD TO MATCH ANY
AMUSEMENT PARK OR ANY
SUSPENSEFUL MOVIE.
IF IT WERE A MOVIE IT WOULD BE
ONE OF THOSE OLD SPA GET AT THIS
WESTERN THAT MADE CLINT EASTWOOD
FAMOUS.
I THINK YESTERDAY WAS GOOD
EXAMPLE OF THE "THE GOOD, THE
BAD AND THE UGLY".
SAW THE DOW REVERSE 500 POINTS
INTO THE CLOSE.
KEY SECTORS CONTINUE TO FLASHING
IN RED.
THINK ABOUT THIS.
ALL SEVEN MONEY CENTER BANKS
TRADED DOWN.
ALL FOUR REGIONAL BANKS FINISHED
LOWER.
ALL SIX INSURANCE COMPANIES,
THEIR STOCKS FINISHED LOWER.
NEVERTHELESS ALL OIL AND GAS
NAMES WERE LOWER.
11 OF 13 INDEPENDENT GAS
COMPANIES WERE LOWERED.
ALL THE REFINERS GOT HAMMERED
YESTERDAY.
THERE WAS TRANSPORTATION, FEDEX,
UPS.
THEY GOT HIT REAL HARD.
THE TRANSPORTATION INDEX WENT
DOWN FOR THE RIDE WITH THEM.
NOW THERE IS SOME EXTENUATING
CIRCUMSTANCES WITH ALL OF THESE
EXAMPLES.
IT IS EASY TO SEE THE MARKET IS
AT JUSTING FOR A SLOWER ECONOMY.
THAT PRESENTS A SERIOUS
CHALLENGE AND I THINK
OPPORTUNITIES.
IN FACT I THINK MOMENTUM NAMES
WILL BE THE ONES THAT ROAR BACK
QUICKLY INTO THE END OF YEAR.
NEXT YEAR IF THE SLOWDOWN IS NOT
AS BRUTAL AS THE STOCK MARKET IS
TELEGRAPHING RIGHT NOW, BY THE
WAY I DON'T THINK IT IS GOING TO
BE AS BRUTAL, A LOT OF MONEY TO
BE MADE AWAY FROM THE MOMENTUM
NAMES.
UNTIL THEN MARKET DIRECTION WILL
BE EVERY WHICH WAY BUT LOOSE.
FRB CHIEF GLOBAL STRATEGIST,
MARK WREN.
>> CHARLES.
CHARLES: MARK, THE MESSAGE OF
THE MARKET, HOW ARE YOU DOING,
THE MESSAGE OF THE MARKET, WHAT
DO YOU MAKE OF IT?
>> MESSAGE OF THE MARKET, WE
HAVE A NUMBER OF SIGNIFICANT
HEADWINDS.
FIRST IS CHINA.
I THINK PEOPLE AREN'T LOOKING AT
THIS CORRECTLY.
IT ISN'T A TRADE WAR.
WHAT WE HAVE HERE IS A "GAME OF
THRONES," 70 YEARS SINCE
WORLD WAR II AMERICA HAS BEEN
THE DOMINANT COUNTRY IN THE
WORLD.
JAPAN TRIED TO DETHRONE US WHICH
SOME OF YOUR YOUNGER VIEWERS MAY
NOT RECALL.
THE EUROPEAN UNION TRIED TO
CHALLENGE US.
AND NOW CHINA A VARIETY OF WAYS,
SOME OF WHICH I FIND ACCEPTABLE
AND SOME UNACCEPTABLE, ARE
TRYING TO CHALLENGE US.
AND IT IS CREATING A LOT OF
DIFFICULTIES IN THE MARKET.
AND THEN OF COURSE YOU'VE GOT
THE DEMOCRATS ABOUT TO TAKE
CONTROL OF THE HOUSE.
YOU DON'T KNOW HOW MUCH WE'RE
GOING TO SEE OF LEGISLATION.
I'M SURE WE'RE GOING TO SEE AT
LEAST SOME, IF NOT A SIGNIFICANT
AMOUNT OF INVESTIGATION.
AND WE HAVE A LOT OF STUFF OUT
THERE, ALONG WITH ITALY, ALONG
WITH WHAT IS HAPPENING IN FRANCE
THAT ARE CAUSING DISLOCATIONS
AND MAKING THESE MARKETS BOTH,
BY THE WAY, BOTH THE DEBT MARKET
AS WELL AS EQUITY MARKET VERY
VOLATILE AT THIS TIME.
CHARLES: HAVING SAID THAT, MARK,
WHAT I'M SEEING IS THAT ALMOST
WORST-CASE SCENARIO, IT IS
STARTING TO BE PRICED INTO THE
MARKET.
IF WE START TO DO THE MATH,
200 BILLION, TIMES 10%,
20 BILLION, HECK, WE PROBABLY
HAVE SEEN CONSUMERS BENEFIT BY
100 BILLION FROM CHEAPER GAS.
SO THE NUMBERS IN AND OF
THEMSELVES SEEM TO BE OVERBLOWN
WITH RESPECT TO HOW MUCH THIS
MARKET HAS LOST.
>> CHARLES, I DON'T EXACTLY
AGREE WITH YOU.
I THINK THAT THE WORRY,
PROJECTION OF WHAT THE RISKS IS
GOING TO BE.
POLITICIANS GLOBALLY, OUR
POLITICIANS, CHINA'S
POLITICIANS, YOU KNOW, THE
ECONOMICS ISN'T ON THE TOP OF
THEIR MIND.
THEY'RE INTERESTED IN CONTROL,
RE-ELECTION AND STAYING IN
POWER.
AND SO CONSEQUENCELY FROM
DAY-TO-DAY, YOU CAN'T TELL, FOR
INSTANCE WITH CHINA WHAT THESE
PEOPLE WILL DO OR NOT DO.
THEY THROW THIS STUFF OUT ON THE
TABLE.
THEN THEY TAKE IT AWAY.
THEN THEY THROW MORE STUFF.
AND THEN THEY TAKE IT AWAY.
I THINK THE ISSUE, CHARLES IS
RISK.
THERE IS PLENTY OF RISK ON THE
TABLE RIGHT NOW.
AND I THINK THAT IS WHAT IS
CAUSING DISLOCATION AS I SAID,
IN BOTH THE EQUITY AND THE DEBT
MARKETS.
CHARLES: MARK, WE HAVE TO LEAVE
IT THERE.
WE HAD A LOT OF BREAKING NEWS.
I APPRECIATE YOUR THOUGHTS.
HOPE WE COME BACK TO FINISH YOUR