THEY’RE READY TO FILE FEDERAL
CHARGES.
>> Bill: THANK YOU, ALEXIS.
>> Dana: THE STOCK MARKET HAS
OPENED AFTER THE DOW’S WORSE
DAY IN TWO YEARS.
THE INDEX CLOSING DOWN 3.6%.
LET’S BRING IN MARIA BARTIROMO.
I UNDERSTAND FROM YOU IF YOU
LOOK FOR CALL FOR NUMBER ONE
DOWN 13.1% FROM JANUARY 1 FOR
THE DOW.
ALL THOSE TREND LINES ARE NOT
GOOD.
AND HOW DOES THIS AFFECT
EVERYDAY AMERICANS WHO MAYBE
THEY HAVE A LITTLE BIT OF MONEY
IN THE STOCK MARKET, 401K BUT
THE GAS PRICES, THE FOOD
PRICES, IS STARTING TO GET VERY
REAL FOR PEOPLE OUT THERE.
>> IT REALLY IS, DANA.
GOOD MORNING.
NOBODY WANTS TO SEE NUMBERS
LIKE THIS AND SO THERE IS AN
IMPACT ON SENTIMENT AND
SOMETIMES SENTIMENT DICTATES
THE WAY YOU BEHAVE WHETHER OR
NOT YOU ARE GOING TO SPEND
MONEY, WHETHER YOU FEEL LIKE
YOU ARE IN GOOD FINANCIAL SHAPE
OR NOT.
BUT YOU’RE RIGHT.
401Ks, PENSION FUNDS IS ANOTHER
OBVIOUS IMPACT.
A LOT OF PEOPLE ARE INVESTED IN
THE STOCK MARKET AND DON’T
REALIZE IT BECAUSE THEIR 401K
AND INVESTMENTS THEY DON’T LOOK
AT EVERY DAY ARE LOSING VALUE.
I THINK WHAT’S GOING ON HERE IS
A REALIZATION THAT THINGS ARE
SLOWING DOWN CONSIDERABLY AND
WE MAY VERY WELL BE IN A
RECESSION RIGHT NOW.
SO IF LAST YEAR WAS A YEAR OF
WORRYING ABOUT SUPPLY, THIS
YEAR IS THE YEAR OF WORRYING
ABOUT DEMAND.
WHAT WE’VE BEEN TALKING ABOUT
ON "MORNINGS WITH MARIA" ON FOX
BUSINESS IS DEMAND DESTRUCTION.
WHAT IS THAT?
IT’S WHEN YOU GO TO THE STORE
AND SAY I WANT TO BUY X, Y, Z
AND YOU GO AND GET STICKER
SHOCK AND SAY I DIDN’T KNOW IT
WAS THAT EXPENSIVE I’M NOT
BUYING THAT RIGHT NOW.
THAT’S WHAT’S GOING ON.
WHILE WE HAVE THE MONTHLY
CONSUMER PRICE INDEX NUMBER
EVERY MONTH SHOWING ABOVE 8%,
THE LAST READING WAS 8.3%
INFLATION RATE.
THAT’S AN AVERAGE, GUYS,
REMEMBER THAT.
THE STUFF WE’RE BUYING IS UP
MUCH MORE THAN THAT.
A LIST HERE.
WHEN YOU LOOK AT THINGS LIKE
FRESH FISH UP 13%, CHICKEN UP
16 1/2%, GROUND BEEF UP 15%.
THE PRICE OF AN AIRLINE TICKET
UP 33%.
SURE, THE CPI IS SHOWING AN
AVERAGE OF 8.3% BUT THE STUFF
THAT WE’RE ACTUALLY BUYING
EVERY DAY IS UP MUCH MORE THAN
THAT IN THE DOUBLE DIGITS AND
THAT’S WHAT IS CALLED DEMAND
DESTRUCTION.
YOU START LOOKING FOR
ALTERNATIVES.
>> Bill: WELL DONE, MARIA.
DIESEL ALL-TIME HIGH.
GASOLINE PRICE TODAY.
$4.58 A GALLON.
A YEAR AGO IT WAS $3.
A BIG DIFFERENCE.
AMERICANS SPENDING ON GAS, LAST
YEAR THE AVERAGE WAS $2100.
IN MAY THEY EXPECT AMERICANS TO
SPEND $5,000 ANNUALLY.
CALL FOR NUMBER 4.
$5,000 FOR AN AMERICAN FAMILY.
LOOK AT THOSE NUMBERS.
I THINK THERE WERE TWO THINGS
THAT STUCK OUT AT ME, MARIA,
TARGET ANNOUNCED THEIR EARNINGS
YESTERDAY AND THEY GOT HAMMERED.
THE GUIDANCE THEY GAVE FOR THE
NEXT THREE MONTHS WAS WE DON’T
SEE IT GETTING BETTER AND THAT
WAS NOT A GOOD SIGN AND THEN
JANET YELLEN DROPPED A BIG WORD.
SHE USED STAGFLATIONARY EFFECTS.
YOU PUT ALL THAT TOGETHER THAT
I JUST EXPLAINED, THAT IS NOT A
GOOD FORECAST.
>> NO, IT’S NOT.
TARGET GOT SMASHED ON WALL
STREET.
STOCK WAS DOWN 27%.
IMAGINE LOSING A THIRD OF YOUR
VALUE IN ONE DAY.
THAT’S WHAT HAPPENED WITH
TARGET.
THEY HAVE BEEN TRYING NOT TO
RAISE PRICES ALL THAT MUCH.
IT IS TRYING TO WATCH TO SEE
WHAT CONSUMERS WILL DO AND HOW
THEY WILL REACT.
GASOLINE PRICES ARE A BIG
PROBLEM AND CONTINUE TO BE A
PROBLEM.
WE HAVE NOT ENTERED THE PEAK
DRIVING SEASON MONTHS YET.
THIS MORNING J.P. MORGAN TELLS
CLIENTS THEY EXPECT A REGULAR
GALLON OF GASOLINE TO HIT $6 A
GALLON BY THE END OF THE SUMMER
IN AUGUST.
WE’RE IN FOR SOME MORE PAIN
WHEN IT COMES TO GASOLINE
PRICES AND THAT’S THE
UNDERLYING COMPONENT HERE
THAT’S LIFTING SO MANY OTHER
COMMODITIES BECAUSE YOU HAVE TO
DRIVE THE PRODUCT TO THE STORES
AND THE TRUCKERS ARE HAVING
ISSUES.
THERE AREN’T ENOUGH TRUCKERS
AND PAYING HIGH PRICES FOR
DIESEL AND SOMEBODY NEEDS TO
LEFT HOLDING THE BAG.
COMPANIES WILL EVENTUALLY PASS
IT ON TO CONSUMERS.
WE’RE LOOKING AT TOUGH TIMES.
STAGFLATION IS JUST HIGH-END
INFLATION AND LOW ECONOMIC
GROWTH.
WHERE WE ARE RIGHT NOW.
SOMETHING LARRY SUMMERS WAS
PREDICTING AND CRITICIZING THE
ADD MIN INIS TRAITION’S
POLICIES ABOUT.
>> Bill: A LONG TIME AGO.