Closing Bell - Closing Bell Overtime: Trading the Turmoil 9/23/22

Episode Date: September 23, 2022

Stocks hitting new lows … so where is the market really heading from here? MBF Clearing’s Mark Fisher gives his expert market view. Plus, EMJ’s Eric Jackson breaks down how to trade the tech wreck. And, Joe Terranova and Mike Santoli give their Last Word on a wild week.

In just a little bit, I'll speak exclusively to legendary trader Mark Fisher. He might be known for his prowess in the commodities market. However, he's got thoughts about your money across every market today and how he thinks the Fed can really kill inflation once and for all without destroying the economy at the same time. We begin, though, with our talk of the tape. New lows and beyond. Where stocks are really heading from here after taking out those levels from June,

at least on the Dow. Joe Terranova, we'll ask him. CNBC contributor and Virtus Investment Partners chief market strategist right here with us at Post 9. It's good to see you. Thanks for coming down here. We talked to you on the halftime report today as we were sort of in the game. Now we're, you know, here on the sidelines taking stock, if you will, in what just happened. As I said, a new closing low for the Dow. Where do we go from here? Well, I think you have to take a little bit of a good feeling about the way that we ended the day. This clearly had the feel of a liquidation type of an event.

Trading volumes were very heavy. Volume was nearly 40% above the 30-day average. We haven't seen that in a while. Certainly you saw in treasury yields, a spike, almost a parabolic spike, move higher to levels that we haven't seen in many, many years. So I think that's indicative of a little bit of a liquidation feel. I think you could take heart in that, but by no means does that mean this is the all clear, because ultimately, the big question is going to be earnings.

You know, John Spallanzani, who sends a lot of information through to us throughout the day, said you got seven million SPY puts that were bought today. That only happens once in a while, is what he said. It sort of gives you an idea of where sentiment is right now and where, you know, a good number of traders think we may be going from here a bearishness is at levels that we haven't witnessed since 2008 and again I think today a lot of the liquidation in certain positions I think is indicative that the moves that we saw in the currency market for both the sterling and the euro the euro at its lowest

level since oh two yeah ster, I think, 37 years. We haven't seen that type of low. So that type of behavior in the currency market, in the commodity markets, where you saw the free fall, not just for oil and natural gas, but even for safe havens like gold. You saw it in the fixed income market. You saw it universally. And then a lot of the recent favorites, a lot of the areas of the equity market where you felt as though there was this potential opportunity, this relative outperformance, let're talking about decades long from the last time we've seen

anything remotely close to that. I look at the VIX as I try and pull that up. You know, the VIX is at 30. It's not like the VIX was like ripping with a lot of these other things. Is there any message in any of that? As long as the dollar remains as strong as it is and rates are where they are, how can stocks get out of the way of that? Well, I think they can't. And I think the contagion spreads globally because really what happens is that the inflation from the U.S. is exported to the rest of the world. And that's what's being represented in the currency move. So there's been a lot of conversation this week about 60-40 portfolios and the value that's been restored, certainly for the 40% allocation. In bonds, you're talking about in bonds. In bonds, clear and fixed income and taxable fixed income, as well as government bonds. And

I agree with that. That's where the value opportunity is right now. There's such compelling and competing yields at the same time for equity investors. And knowing that you're seeing now the inflation being exported via the currency vehicle around the world, that's a problem for domestic and global equities. Let's acknowledge, though, the fact that we did close well off the lows. We didn't close at some cataclysmic blow off on a Friday afternoon like, frankly, we've done multiple times since I've been doing this program. Multiple 900 plus down days in the Dow. Not that long ago, a 1000 plus point decline in the Dow. Does that tell you that we're at any sort of oversold level where we could get some sort of bounce, whether it's lasting or not? I think people will take a meaningful bounce from

here now that we've hit some of these pivotal levels. I think there's been a lot of debate on the network this week and some degree of frustration when we use the term long-term investor, right? People say in an environment like this, how could you be a long-term investor? How could you talk about the future so saliently? Scott, I'll tell you this. To me, the market is incredibly oversold if you are a long-term investor. Would I sell my equities here at $36.93 for the S&P?

No, I wouldn't. I know, but you sold Uber and you sold Lululemon. But those are trades. But what's the difference? You still took some profits or got out of stocks that you loved. So the difference is when you think about long-term investing, you think about wealth creation. You think about establishing a series of goals and outcomes for your portfolio. You think about the long term.

You don't think about market timing. You think about time long term. You don't think about market timing. You think about time in the market. There are other individuals who everyone plays golf, but there are some who play golf really well like Tiger Woods and Rory McIlwain, professional golfers. And I think the same thing could be said for trading. And I believe that trading is something that select people can do if they're focused properly on what risk is and trades in Uber, trades in Lululemon, those are trades. And quite candidly, Scott, they were profitable trades in a significant

downtrend overall for the market. So I think that's where you can make the distinction. I know this is a trading opportunity and an investment opportunity. I know they were profitable trades, but the mere fact that you're leaving behind stocks that you liked in this environment says that you still think we're in a very uncertain world. The common denominator on both is what? They're consumer-facing businesses. And from what I heard from Chairman Powell the other day, when he talked about pain, when he talked about, as Steve Leisman brilliantly said, out hawking the hawks, right? In that environment, the thesis previously has been the consumer will be resilient and corporate profit

margins will be resilient as well. I don't know if that thesis is as strong today as it was when, you know, before hearing those words on Wednesday afternoon. I mentioned we have a very special guest with us today on this Friday. He is the legendary trader Mark Fisher of MBF Clearing Corp. He joins us now in an exclusive interview. And, Fish, it's so good to have you with us. I sort of mentioned at the top is your prowess is known for what you do in the commodities market, and that's how we generally speaking talk to you. I don't want to do that yet.

I want to save our conversation in commodities and energy and what is really your wheelhouse and just talk to you generally about what you're seeing in the market right now. You've seen a lot of markets. I mentioned earlier today you were a student of Professor Siegel at the Wharton School. Just give me your idea of where you think we are, where we may be going, and then I'll move on and talk about what Professor Siegel told me today, which I want you to react to also. But just first, your view on what's going on. Okay, well, Scott, what's going on is that we need to manage the supply crisis. The only way inflation comes down in the long run is if we go ahead and create more energy, better food, more housing, and lower health insurance costs, right?

Because take someone that has blood pressure problems you go ahead and the fed can go ahead and control paper assets via you know via the interest rates and via you know selling off selling bonds and everything and what does it do it's sort of like blood pressure medication you take blood pressure medication and your blood pressure goes down but the minute the fed lightens up and stops raising rates or becomes more friendly to the market, right, what's going to happen? Just like when you take blood pressure medication. When you stop taking it, your blood pressure goes straight up. On the other hand, if you lose 25 pounds, your blood pressure doesn't go back up.

The market needs to go to the mode of losing 25 pounds. And the way you do that is by stimulating supply, supply of food, supply of energy, supply of housing, and lowering health care costs. And if you say that's impossible to do because this country can't agree on anything, think about 18 months ago in Europe. If I would have told you 18 months ago, Scott, I want to build an LNG plant or a small nuke plant, you know, you would have laughed at me. I mean, there was probably a better chance of me winning Miss Universe pageant, right? It would have taken eight to 10 years to do it.

Now, they're building LNG plants in 18 months. Why? Because the market reached that tipping point where everyone says, we need to do something, and they're doing it. The question is, is this country ready to go ahead and to address the supply issues once and for all and get past all the politics

whether you're a Democrat or Republican and realize that we have to stop beating up the middle class? Because think about this, Scott. Did the middle class really cause inflation? No. But if you raise unemployment, really suffers the middle class. Right. The answer is we need to go ahead and increase. And incentivize the supply side of the equation and I can show you it's pretty it's it's not that hard but it

means we actually have to all get on the same page or relatively awesome. So there's a few different things in there number one- I think we can both agree that. One of the issues with all of this is that the Fed cannot impact the supply side of economics. So that's problem number one, right?

Its toolbox isn't fixed with the tools that can deal with that. And number two, to your analogy of the blood pressure, you're talking about real structural changes, none of which are able to happen overnight. Maybe we can speed up the process. Maybe we can speed up the process, to your point about what's happening in Europe. But even in that scenario, we're talking about a many, many months long process. And we've got the here and now of inflation that we don't seem to know exactly how to get it down fast enough, even though some would suggest it's coming down and maybe quite substantially in certain areas. And therein lies the problem. But it is coming down temporarily, right? I mean, obviously, Professor, he goes right. Everything, you know, crude oil from 110 to, you know,

70 something, right? It's all come down. down the question is how do you keep it down. And again I don't really think you need to have the solution tomorrow but it could people need to get the same page and. If it if the marketplace perceives that there's gonna be a supply chain answer. And it actually that takes a while to happen but they really think that's gonna happen the market's gonna correct itself to it and inflation expectations will come down in general. But if you think about it, look what happened in the U.K. today. They just tried to stimulate demand, and look what happened, like you guys said, look what happened to that bond and currency market, destroyed.

If that's not the sign that stimulating demand is not the answer here, I don't know what is. If we can't wake up in this country and realize that for the first time we have a inflation issue that's not going to go away. I mean, it's going to go away now with the Fed killing everything. But the minute the Fed lets up on the pedal, we'll be right back to where we were. We need to go ahead. It's pretty obvious. So you just said the words. These aren't my words. They're yours. The Fed killing everything. It's sort of a principal concern of what we did hear

from your former professor, Jeremy Siegel, of the Wharton School on the Halftime Report today. I want you to listen to a chunk of that because it's pretty provocative and we can react to it

on the other side. I am very upset. Yes, I am. I am. I I'm afraid it's like a pendulum. They were way too easy, as I've told you and many others through 2020, 2021. And now, oh, my God, you know, we're going to be real tough guys until we crush the economy. I mean, that that is just to me, absolutely.

Poor monetary policy would be an understatement. I mean, look, I'm watching Twitter. I know it's a it's only a small sample size. I'm watching Twitter. They're like, go, professor. You're right. Well, I mean, I think we're giving Powell. Yeah, honestly, we're giving him too much of a, you know, oh, good. He's standing against inflation. We're giving him too much. I mean, listen, the Fed has just, you know, executed the last two years, one of the biggest policy mistakes in the one hundred and ten year history of the Fed by staying so easy when everything was booming and pointing to, my God, inflation is going to be a terrible problem. And now,

oh, yeah, we did goof badly there, which he never really admitted. I mean, he still blames some things on Ukraine and, you know, Putin and the supplies, even though oil is way below that level, way beyond that. And now we're saying, oh, my God, he's the supplies, even though oil is way below that level, way beyond that. And now we're saying, oh, my God, he's the God that's going to stop inflation and he's going to crush the wages, which have not kept, which have fallen behind inflation by three, four or five percent. You can't have cost push inflation when you're lagging inflation. You can't blame wages for inflation when they're two, three, four, five percent behind inflation. I mean, why is he putting the burden

on these working people, on the employed people? That's, I mean, what is, and every other commodity price is going down. Powell and Fed are eventually going to see the light. I mean, they eventually, I mean, it took almost forever to see the light that inflation was not temporary. And then, you know, and then they made that change. They will eventually see how tight they are.

And just like none of their predictions of November 2021 came true, none of them, none of their forecast, none of their dot plots, none of their forecasts of Fed funds came at all true. I don't think anything that they're saying for 2023 is going to come true either. I think they're going to really be forced to lower the rate and more rapidly than much more rapidly than they think. All right, Fish, I mean, you've sat in this man's class, right? He's animated, and generally speaking, but he's worked up. The last time I saw Professor Siegel so animated was in 1980, when I was in his class, when we had a whole gold debacle. I don't want to get to that.

And by the way, Professor Siegel's class was one of the few classes where I wasn't the top student, but forget that. But in reality, to Joe's point, right, when I watched that have time show with the press single i covered a lot of my shorts custom that could've been a tradable bottom that's the sentiment that you want to see as a you know if you're a trader not an investor as joe talked about for as a trader

what what when when you have someone like Professor Siegels and his prowess go ahead and have a meltdown about the Fed, to me, that could have been it for a little bit, right? But that is a trader, not as an investor. But everything he said about the Fed, the Fed can't control supply. Congress has to control supply. We have to go ahead, and it's easy. You may have to put in, you have to incentivize housing by giving tax incentives, by giving people guaranteed rate of returns. Think about it, Scott. If you knew that in your area there was going to be 3,000 more units of rentable housing two or three years from now,

what happens to the price the minute the marketplace realizes it? It goes down today. If you go ahead and give farmers incentives and you give them price supports, like we used to do in cotton, so they can produce as much as they possibly can, what happens to the price of food today? Goes down. If you go ahead and finally allow pipelines throughout this country to connect for natural gas, right, what happens to the price of natural gas? Even though the pipelines take well, they go down. Think about this. In Texas, gas is trading $3 below the hub. The same is trading $3, $4. In the New England area, because there's no pipelines, it's trading in the 30s.

The country needs to understand that if you win 70% of your argument, you've won the argument. You can't win if you expect that you're going to get 100% your way in any argument. I don't know whoever wins. And if this doesn't wake up our institutions, nothing's going to. And hopefully this is the wake-up call. Because the Fed cannot control long-term inflation by doing this. It can only go ahead and rehab it, like Professor Siegel said, in the short term. So in that light, do you think the Fed's done too much?

Do I think the Fed's done too much? I think they were late to the party one way, and I think they're reacting too late. Yeah, to some degree. But again, they're pigeonholed also. I mean, it's not, they're not to blame, right? We need everything with the fiscal stimulus that got done during covid throughout the world and and and taking our balance sheet from 1 trillion to 9 trillion you know that was kind of that was lunacy to begin with now you know everyone's backpedaling too fast but the real answer is just like i said increase supply even though it may not happen to you to

what you said scott immediately maybe it takes you know two years to build it out. To never put the market knows it's coming. The market will adjust prices accordingly. If you if the market doesn't think it's coming. Okay. It's not going to just. And that's it's it's black and white it's kind of simple. Let's do this let's take a quick break we'll come back. After this quick break. We'll come back after this quick break and we'll talk about the commodities markets. We'll talk about energy, the big sell off there, what's going on, how you can protect your money, perhaps make some money in that space. It's the worst performing sector in today's drop, by the way. Discuss all of it with Mark Fisher right after this break. And as we do head to the break, take a look at today's Twitter question. We want to know,

do you agree with Professor Jeremy Siegel that the Fed has done too much and should stop hiking? Or do you think it should keep going? Head to at CNBC Overtime on Twitter. Cast your vote. Simple question. Stop or keep going? We're back from the stock exchange right after this. We're back in overtime among the asset classes getting smoked today.

As I mentioned, commodities like oil as the dollar continues to rip higher and concerns of a global slowdown intensify. Legendary energy trader Mark Fisher, of course, is still with us. Joe Terranova is here, too. All right, Mark. So we've got energy. The worst today, the worst this week, the worst this month. I've got a seven handle on crude. What do you make of this? To me, I'm buying. We're going to start buying. I mean, we started a little bit, not really to buy out on the curve. Jan 24 natural gas, you know, is trading, you know, 570. Again, for natural gas purposes, what happens, Scott, now in October is a complete different animal to what happens in the winter.

And natural gas is a winter commodity. That's number one. Second of all, crude oil prices two years out are now $66. That's almost like I was biting at the lip to buy a lot of it today. I didn't. But at $66, again, risk-reward. What's my risk? If we don't solve this problem and the Fed keeps hammering out two years from now, can we go to $60? Maybe. But I think the risk-reward is lined up. If you can buy deferred

crude oil futures out on the board, like calendar 23, late calendar 24, you'll be fine. I think natural gas this winter, it's still going to be a winter commodity obviously natural gas also got pummeled because you know they were afraid of the hurricane you're hitting the production areas again october natural gas and jan natural gas are two different animals i think in terms of equities what do i know about equities yes joe but i still think that southwestern range, just to me because of the names we have, are still good value. But the marketplace in general, in terms of other equities, I'm not sure. But to me, the easiest things are the things that the Fed can't really manipulate and that

no one can manipulate. Natural gas, agricultural products, corn, soybeans, wheat. There's no OPEC of corn, soybeans, and wheat. Who's the government going to talk to to, you know, increase production? You can't do that. I mean, on the other hand, one last thing. On the other hand, in Russia, I mean, if you follow the playbook of what happened in Crimea, you could be set up for a pleasant surprise a couple weeks now, right?

Think about what, you know, it's been around the marketplace for this week. They annex some territory. Putin says, okay, they're now part of russia we're done and that'll be up to ukraine to see if they stop or not which you know could have a would be an interesting that kind of see if if ukraine would stop or if the world would make ukraine stop but that's always been that's that that's always been a great wild card of course is trying to game out how all of that in eastern europe is is going to end up. And we do have Joe Terranova, as I've mentioned. I'm glad we do, because how does what Mark says from the commodity standpoint

translate to the equity standpoint, both in energy equities and ags, which you have owned and may still own both across the space? Well, the first question that I would ask of Mark is, Mark, what you talk about the curve and long dated futures, talk a little bit about. No, hold on. I want to know what Mark said about what he just said about energy is the environment right now. He doesn't speak to the stocks so much. I want you to speak to the equities. No, no, no. I know. Absolutely. So without question. That's where I want to go.

I got you. Without question, you want to stay in the agriculture names, which I've talked about. Archer Daniels, Midland, John Deere, you want to stay in the futures market, the supply challenge that you're seeing is reflected in the shape of the curve, Scott, which we know is backwardation and contango. So the point is, if the signal to get out of agriculture, energy or energy equities was going to be lit from the commodities market, it would be that you would see the backwardation come out of the futures market on a big down day. And Mark, I don't think that's exactly what you saw today. You still have that strength of a backwardated curve, which is signaling supply challenges. That's why you

want to stay with these agriculture and energy equities. Joe, I think that backwardation can tangle for 80% of the people that are watching this. We might as well be talking, you know, they're not going to understand that. It's simple. $66 crude oil. If I told you you could buy crude oil two years from now at $66, are you a buyer or a seller? I'm a buyer. If I told you you could buy winter nat gas a year out from now at, you know, seven something, are you a buyer or a seller? I'm a buyer.

It's that simple. Explain to our audience about backward nation contango. Yes, that's what we really strive for. Do you agree the supply challenge is still there? Yes. It's not going away. The point that I take from all of this to connect the dots for our viewers is if you would buy oil, if I said you could buy oil today at 60, you'd be a buyer.

Some suggest that energy stocks right now are trading like oil is at 60, not at 78. And that's why they would suggest that they're good buys here at these particular levels. Joe, I throw that to you. I without question agree with that because of the capital allocation strategies. So they're not incentivizing the increase in supply with the incremental dollar of revenue that's generated. What are they doing? They're prioritizing dividends and buybacks. And as a shareholder of those companies, when I know I've got a tight supply environment, why wouldn't I want to own those companies, especially now when I see the spot price decline 25 percent since the beginning of July in the case of oil, in the case

of a lot of these agriculture names, double digits as well. There's a point that Brian Sullivan was making in the prior hour of closing Bell, what some are suggesting the way that some of these energy stocks are trading. The best oil play right now for you is what? And the best natural gas play for you right now is what from an equity standpoint? So Pioneer Natural is in the energy side, a name that I think certainly you want to have exposure to. You can even look at some of the refiners like Valero, ConocoPhillips, Chevron, ExxonMobil, a lot of multinationals. I don't think you're going to go wrong there. On the natural gas side, I've talked a lot about One Oak, which has underperformed a lot of the

other natural gas games so far year to date. Devon Energy, EOG, these are other names in natural gas that I think you can own. And I think Mark previously mentioned RRC and Southwestern Energy. Those are also a little bit of a more high beta play on natural gas. But those are names I think you could consider. Why of all the names in the universe, Mark, even as you say, what do you know about stocks? Obviously, you know something about it. Why is Range Resources the name that you lean on most and the one that you have been, because I can remember most of the last times that we've spoken over the last two handfuls of months, that name is the one that always comes up. Why? Range and Southwest, Scott, because, you know, some degree, to be honest, you can't teach an old dog new tricks. And I'm an old dog, right? So Range and Southwest have been comfortable trading stocks for me, and I'm not really a stock expert.

I mean, you want to be a stock expert? Ask Joe. I don't know if energy stocks are trading against a 60-handle, 50-handle. Ask Tepper. What do I know? All I can tell you is that in terms of the futures market, if you tell me, Mark, I can buy crude oil now at $66 two years out. I can buy NatGas for next winter at $570.

I'm a buyer. Not this winter, next winter. I'm a buyer. And pretty soon, I don't care what the Fed does, I'll be a buyer at those levels. What if I told you that the dollar was going to remain red hot? How would that change, if in any any way your perspective on where commodities prices in general are going. It's a good question Scott. Does it mean is a dollar at these levels or does the dollar appreciate another 15 percent against the pound. Does the ball stay here

against the euro or does the euro go to I don't know 85. If the obviously if it stays here it doesn't affect it doesn't affect what I'm saying. If the euro goes to 85, then anything denominator in dollars, whether it be crude oil, nat gas or anything, is going to go down because, you know, you just got-dollar became that much stronger. Think about it. The prices in Europe of natural gas and crude aren't down as much because you've got the currency depreciation.

So do I think the dollar is going to go to eighty five in the euro I don't know bring in someone from. That's not my that's not my I can't. Analyze that because that's not my game. The best part about you though and I love the you're so honest about it is you know

what you know. And you admit what you don't know. And I know our viewers really appreciate that. Let's wrap it up. You enjoy the weekend. I appreciate you spending the last 30 minutes with us. These are precarious times in all sorts of different markets. We needed your perspective today. Thank you for it. Thanks, Scott. All right. That's Mark Fisher joining us. It's time for a CNBC News update with Shepard Smith. Hi, Shep. Hey, Scott. Thanks from the news on CNBC. Here's what's happening. A shocking report from the United Nations today on Russian atrocities in Ukraine.

Among the findings, the rape and torture of children by Russian soldiers and a large number of executions. The report follows several other allegations of war crimes from Ukraine, human rights groups and Western governments. Hurricane Fiona, now a Category 4 storm and taking aim at Nova Scotia. Forecast to hit there tomorrow afternoon. It brushed past Bermuda today as a Cat 3 storm, high winds, heavy rains. This is another storm now gathering in strength in the Caribbean. And it could become a major hurricane threatening Florida next week. Just minutes ago, the governor there, Ron DeSantis, declared a state of emergency for 24 Florida

counties. And another COVID scam. Labor Department's inspector general says today more than $45 billion in pandemic unemployment aid was stolen. The time frame, March of 2020, so right at the beginning until April of this year. More than half of that fraud coming from people who filed for benefits in multiple states. Tonight, more of the report of Russian war crimes in Ukraine, plus Mike Santoli on the markets and inside the most expensive apartment in America. On the news, 7 Eastern, CNBC. Scott, back to you. All right. Shep, thank you.

That's Shepard Smith. Up next, trading the turbulence. Stocks sinking to end the week. So where do investors go from here? We have an all-star panel of money managers standing by to help you navigate all of that. We're right back. We're back. Stocks selling off sharply today the dow dropping 486 points and taking out its june lows joining me now to break out down the action keith lerner from truest alicia levine from bny mellon wealth management it's good to see you both alicia to you first where do we go from here what

do you think well great to see you scott, on another turbulent Friday. Look, we have been in print with our clients for months now that our downward range was at 3,600. So we've well prepared our clients for what we thought the downside could be in this market if inflation did not resolve on its own and if the Fed had to come in and really go higher for longer. I think it's no stretch of the imagination to say that we could likely undercut that here simply because markets don't stop exactly where you think they are. And the momentum here is clearly to the downside. But I'd say this, to the extent that we are seeing evidence of inflation cooling in other parts of the economy, I think at some point we could have a relatively better end of the year than we have the end of

the third quarter. And I would just say that the fourth quarter is seasonally very strong, particularly in a midterm election year. So in the short term, likely we go lower. Not not too hard to say that. But I do think we do have a better fourth quarter. So, Keith, aside from ranting, I think we can went on a rant. Jeremy Siegel did today that the Fed's doing too much. Right. That was that was plain. that was his point of view the other side of it of course is as long as they're doing that as as long as they're so resolute to stay on the path they're talking about being on now stocks are gonna continue to go lower do you agree listen so first for great to be with you and

Alicia I'm kind of in the same mill camp with Alicia know we were with you and Alicia. I'm kind of in the same camp with Alicia. We were with you in August, and our view back then was to reduce equities as we were approaching 42 to 4,300. But our message today, and we just wrote this today, Scott, is that we don't think it's time to press a negative view after a 15 percent decline in just five weeks. I mean, today felt a little bit panicky. We're seeing, you know, one of the more oversold conditions similar to June. So we can certainly overshoot that. But I think at this point, a lot of the damage has been done at least short term. And, you know, I think we will get a rebound. I will say, you know, as we look at six to 12 months, we still think we have a very challenging backdrop because I do agree with Siegel insofar as I think the Fed has scar tissue. And what that means is not only will they keep rates higher for longer, is they likely to be less aggressive when

they do pivot. And this is going to affect the market cycles and economic cycles for many years to come in our view, because they're not going to be on call like they've been for the past several years. But again, more direct to your question, Scott, we just now went down 15 percent in a straight line. We don't think this is time to press the bets on the negative side. Oh, I hear you. I mean, it's hard to be. It's can't really get negative now. If you're just getting negative now, you haven't been paying attention because there's been all sorts of reasons leading up to today why you may want to be negative. Most certainly don't fight the Fed. Right, Alicia? Now, that sounds great. That doesn't really help anybody, though. Sitting

at home was wondering, should I perhaps buy stocks now? What if I listen to Keith? I'm not inclined to get uber negative today, but should I start to get incrementally positive? So I think to the extent that there's fear and loathing in the market, that sentiment is rock bottom close to where it was during the global financial crisis. I think it's not actually a bad plan to start edging in. I'd say this. I do think that we have a ways we do have a couple of weeks here where we could go lower simply because it's not done yet there's the valuations have to come in earnings are going to start to crack a little bit but it is too late to get negative from here so we've already uh diversified our clients with alternatives short-term fixed income we pulled out of emerging markets and Europe to an extent earlier this year.

So, you know, we've already taken some risk off the table. And what we're looking for is a better entry point. So the question is, Alicia, what is the better entry point? And for us, this is about earnings and this is about what's realistic. And to the extent that we see earnings come down, we would be willing to buy here because, Scott, you know this, that the market stabilizes well before the real economy and well before the data do. So the Fed's in a tough space because they're stuck with having to make economic projections

with backward-looking data. So to go back to Jeremy Siegel for a second, that's the crux of the matter and the bind that they're in. It's not that they're making two mistakes. It's that this once they made the first mistake, they were stuck with this. Yeah, I hear you guys. Enjoy the weekend, if possible, after this turbulent week. We'll see you soon. I know that Keith and Alicia, thanks for joining us up next. The tech trade Nasdaq getting slammed in today's sell off. How can you position your portfolio amid all of that uncertainty? We'll find out. Eric Jackson is going to join us when we come back.

We're back in overtime. Take a look at the pain in the tech trade. New 52 week lows this week for big names like Microsoft, Alphabet, and Meta. But our next guest says we're close to a bottom in tech. Joining us now, Eric Jackson, EMJ Capital founder, president, and portfolio manager. I guess you think we must be, it's good to see you, by the way. I guess you think we must be near a top in rates. Well, last time I was on, I was expecting a soft CPI print. Obviously, I was wrong. And we've seen this huge pullback, especially in the last couple of days with the Powell rhetoric. But I think I previously said that I think the best analog to look to for a prediction of what's

going to happen is 1981-82, because that's the last time we were dealing with out-of-control inflation. And back then, if past was prologue, it did show that tech bottomed first. Tech bottomed about 10 months before the rest of the market. So you had individual names in September of 81 until August of 82, like IBM analog devices that went up 30 to 40 percent over that period when the S&P actually declined 14 percent was still the indices were still going down. And then finally, in August of 82, CPI dropped below 6 percent. The Fed kind of signaled that it was easing and then the stocks were off to the races in general and Nasdaq doubled over the next 10 months after that. So, you know, we still might be a few months away. It might even be early 23

before we see the markets really responding to lower inflation. But there are certain tech stocks that I think can still work from here. So I'm looking at a headline that was literally just tweeted out from Ari Levy of CNBC and CNBC.com. Tech stocks just had their worst two-week stretch since the start of the pandemic. Dropped consecutively, did the consecutive 5% declines in consecutive weeks for the Nasdaq. What if I throw it back to you and I say, okay, I get you with the first in, first out argument, but if I say that the tops in tech were fueled by free money and they're not going to get back to those levels

or anywhere close to it anytime soon because the free money days are done? Well, I'd say that those kinds of companies that benefited the most from the free money days are done? Well, I'd say that those kinds of companies that benefited the most from the free money are probably the ones that are down 95 percent since February of 2021. The market has meted out its pain to the players that deserved to be taken down and will never go back to those levels. I would agree with you there. And things are always changing. I would say, you know, what we've seen over these last few months is a new fang has emerged, which is basically just Apple and Tesla in tech. They have really outperformed. You know, it's interesting that Apple is still well above its May and June lows. So is Tesla, by the way. So things are changing. You've got to adjust to the to the environment that we're in now.

But I think that, you know, my belief and hypothesis still holds that it's going to be tech that's going to lead us out here. That doesn't mean in general Nasdaq could still be flat or slightly down over the next little while. But, you know, the winning stocks, especially their smaller, have dealt with the punishment and they'll probably be the first ones to bounce back. We're up against it today. I appreciate your understanding, Eric. I got to leave it there. We'll talk to you soon. That's Eric Jackson joining us today. Up next, we wrap up an ugly day on Wall Street. Christina Partsanovalos is standing by with our rapid recap. Christina. We have a lot to digest. Falling markets, rising yields, massive currency fluctuations. I'll break down the week that was after this short break.

We're back. We're wrapping up a volatile week for stocks. Christina Parks and Novelos here with our rapid recap. Christina. Oh, Scott, at least I can say we came off the lows for the day around 3 p.m. Eastern time. But all indices are over or were over one and a half percent lows for the day around 3 p.m. Eastern time, but all indices are over or were over 1.5% lower on the day. On the week, all 30 Dow names in the red. For the S&P 500, we only had 16 winners for week to date like Eli Lilly, D.R. Horton, and Twitter. The dollar, though, considered a safe asset in times of stress, jumped to its highest level since 2002, the British pound falling to a 37-year

low against the USD after the UK's new stimulus program was put in place or announced. And then you also had the euro that fell to a 20-year low, pushing Germany's two-year and 10-year bonds higher. Recall that prices move inversely with yields. Maybe it's time to take a vacation to Europe. The strong dollar, though, and fears of a global recession dragging on oil prices with West Texas closing below 80 bucks a barrel. This is a level we actually haven't seen since January. And then I'll just end with this, the fact that oil is down, the S&P energy sector, the worst performing sector, down 9% on the week, Scott. All right, Christina, thank you so much for that. Christina Partinello is up next. It's Santoli's last word. He is breaking down today's sell-off, getting you set up for a big trading week ahead. We're back right after this.

Santoli's here for his last word. I know your thoughts are on Aaron Judge for the weekend, to see if he can break the record as a big baseball fan. I know you are. Yeah, I'll turn to that in a couple hours. Are we going to keep swinging and missing in the market here? What does this mean? So many things coming to an interesting little decision point, right?

I mean, the two-year note yield goes out at 421, looking super stretched to the upside. Dollar index, same thing. So the question is, does something break or do they just pause and calm down and take the immediate pressure off of stocks? That happens, of course, as the market makes a little bit of a teasing break below the June low. So I think it makes sense where we're here. Wouldn't discount anything anyone is saying about how, you know, the Fed doesn't mind seeing the market down here. This is part of the plan. It's still tightening into a slowdown. Trust the process. Right. It's kind of that way. I do keep coming back to the fact, though,

that that will be the stated message up until the moment it stops being it. And it's just the way you have to deal with it. So the only question is, do we get to a short-term peak in Fed panic? I don't know. It could be. What about, Joe, the idea that Mark Fisher put forth, that is that peak negativity when you know, you've got Jeremy Siegel on our air as animated as you can remember him saying enough is enough is enough from the Fed. And that's maybe a moment where you get a bounce off that.

I think that this quarter has been arguably the most bearish extended quarter that I could remember going back to the great financial crisis. And we're coming up on the end of the quarter. And now think about the performance in the quarter. What are we down 2% on the quarter? I mean, it feels like we're down 25% in the quarter. So, you know, the bearishness is something that quite candidly, fundamentally is warranted. And I think it's going to stay with us for a little bit. Do you take any comfort, again, I always sort of lean on your market knowledge, your expertise in the years that you've been looking at this. The fact that we had

ample reason really to close horrifically today. And we didn't. Now, I know the Dow said a new low, but there was I wouldn't if we would have looked up and said Dow was down a thousand at the end, we wouldn't have been surprised. No, not at all. It rallied off of the lows, at least. Does it mean anything? To me, all it means is that nobody was so trapped, and there wasn't so much stress in the system where you had to basically continue liquidating into that close. That's all it really tells me.

The market has operated very mechanically. We did get back down to this 200-week average, whatever these numbers are, and below the lows. And it did bounce. There were 1,000 New York Stock Exchange stocks made a 52 week low today. That's a pretty decent cleanse in a short term basis. It's like, do you now want to start betting on further downside? That's the question I think.

I'm trying to look for any silver linings to leave people with as we head into the weekend, which we'll see on the other side of. You guys have a good one. All of you as well. Fast Money's now.