Trade. Heres a good example. 3m, down 4, 1. 6 . Thats almost 30 points in the dow. Another Big Industrial name. Excuse me, scott, lets move over here and showing you boeing down almost 4 thats another 30 points essentially off the dow, 1 . Another Big Industrial name. Then we get to some very specific stores, this Health Care Story weve been telling you about, the berkshire story and amazon story look what its done to United Health group this is the Biggest Health insurer in the United States dow component. 10 to the downside, thats about 70 points in the Dow Jones Industrial average another specific story mcdonalds down 6 mcdonalds had good earnings beat but they have that big 1 menu there are concerns that cheap menu might drag down growth. Thats another 40 points you put these four stocks together, thats about half the decline in the better than 300 points we saw . It the dow dow is priceweighted. Theres not much positive today, but the market is very defensive in tone. Theres some Telecom Stocks that are up the all stalwart, Procter Gamble, the only thing in the dow to the upside. Thank you bob pisani lets bring in Michael Santoli with an eye on the volatility index spiked above 16 today. Its at the highest level since august we all know last year, 2017 was one of the calmest years on record, depending on how you measure it it might have been the calmest in more than 60 years back to the mid50s what we know about this year when you have slow and steady events is theyre followed by a jumpy market not necessarily a down one the way to think about it is whether an airplane has kind of leveled off after the steepest part of its assent, it doesnt fall out of the sky but maybe you have a little more turbulence that seems to tb whats going on pentup selling because we went up in a Straight Line. You also have kindling Inflation Expectations and a little more doubt about what the fed reaction might be. Thats all playing into it, too. Also heavy inflows into stocks its a more emotional Higher Energy tape. I think that has to do with the upside and downside. Even when the market was going investigator skal in january, we were talking about how the vix was inching higher. When we consider how long this selloff pullback might last, does it matter how broad its been . All sectors of the s p 500, two lower and utilities and telcos are hardly moving. I wouldnt say that necessarily means its going to continue longer. Just for a little context, the s p 500 right now is back at the level it traded at last month. Youve essentially done last weeks tackon rally to the prior gains from january. Not to mention were down even 400 points, about a percent and a half im so used to thinking about the dow in ten thousand no, its not and the s p down even less. That, too still over a percent for all three of the big indices. Right its a definite change in tone from last year when all of these were contained we were talking yesterday about how we had the first decline of at least 0. 6 in 100 trading sessions yesterday. Exactly that was it broke the streak. Quite a remarkable rise and then the selloff today. Well see you next hour. Thank you. Lets get to our closing bell exchange, shall we joining us are caleb from whittier trust, Steven Sarge Guilfoyle and Rick Santelli from the cme. Welcome, everybody le sarge, what do you make of the selloff today . Look, it has been a while since weve seen the dow jump 400 points. It kind of makes sense to me. All the reasons mike and bob went over, they were all valid, but there is an enforced 20 billion outflow based on the Pension Funds that has to happen over this threeday period ending tomorrow. So, you want to know when this ends i would say thursday is a pretty good bet. Why Pension Funds theres almost a rebalancing. At the end of the month, end of the quarter based on how stocks and bonds have performed because stocks went basically parabolic at one point during the third i guess the third week of january, this exacerbated the usual outflow we would have to see out of equities and into bonds. Were not seeing that into bonds yet but the bond market is pretty huge. We might see what should be a 16 billion inflow into the bond market in one day. So, while i know this is a reason for everyone to get nervous and a lot of my people are emailing and they are pretty nervous, i dont see it yet. In fact, ive done more buying than selling today. Caleb, second big day of selling in a row are you nervous . I wouldnt say that were nervous. Its healthy to see a little correction we would be more nervous if the dow was up 500 points, unabated, upside with no consideration for risk theres clear reasons why the market is correcting a little bit today. I think the amazon news partnering with jpmorgan and berkshire haltthaway, that opens up a huge list competing with amazon and the market is adjusting accordingly. Would you draw a Straight Line between the Interest Rates and move or no i think its more a function of the new fed regime coming in, global rates outside the u. S. Finally moving high, bund yields surmounting 60 basis points. The time is come i think the equity market moving higher should have brought that reconnect months and months, thousands of points ago, but it didnt, so i think its getting to soup with regard to Interest Rates. Sarge, i completely agree with you. All my drexel equity guys still on the street, still working for about two weeks have been sending me unlimited amounts of emails on this januarys rebalancing being huge looks like they were right i thought maybe some of the buying would suck it up more but that along with the chinese new year, which is two weeks from friday, fed meeting, you know, Everybody Knows nothing majors going to happen tomorrow or shouldnt happen tomorrow, but it doesnt mean Janet Yellens tonight couldnt be more hawkish i dont think thats going to happen, but i have to tell you, many people do and i think when you put all that together with the president s speech, the notion of whats going on with the budget and immigration, i think that this is kind of the perfect storm for equities to do what theyre doing. As far as Interest Rates, you know, the hchltd yg for the firm all year is in negativity territory. Last year at 87. 26 were four points below that a few minutes ago when i checked all those things need to be paid attention to should the credit markets wake up more, especially in etfs or the barkley spreads . That transmission will definitely impact both fixed income and equities. Sarge, lets talk about the president s speech, the state of the union, that rick just mentioned. Are there any sectors off the back of that that could benefit you . You were having a look at defense stocks. Oh sure i think this selloff comes at a perfect time for someone looking to take advantage of the president s speech ive been increasing all my longs in the infrastructure space and defense. If you look at the earnings of lockheed and raytheon, missile control is hot theres a little stock ive given it in the past, a drone stock. They sell drones tothe army an navy thats reconnaissance and fire control. For me i want to be long going into the speech because if this pops in the morning, youll have something to put against your losses you suffered everywhere else. Caleb, any moves you recommend . I dont think the selloff is big enough to take advantage of yet. If you look back to the late 90s, 1999, you saw 16 market selloffs in excess of 2 this is our first one this year. We saw only two of last year i think its too early i think tonight you may see some rhetoric on infrastructure, but may not be enough to really move names tomorrow so, i would wait. Do you just compare this market to 1999, caleb . Is that your playbook . Yeah, were drawing a lot of parallels to the 90s. In is the second longest economic expansion in the postwar era, on pace to be the longest. Eclipsing 100 months at some point this year. We look at the 1990s from 1990, which was a real estate bust, you had nine, ten years of expansi expansion, led by Technology Shares at the end of it. Similar story here in 2008, you had a real estate bust, nine, ten years of expansion and then Technology Shares leading the market higher. You think about it that way, does that mean well end up in a bubble again, caleb . Is there any except except the dotcom, the last one was the housing bubble. There were 7600 stocks in our universe now 3600 we have a scarcity problem and that gooses valuations. Weve talked about that, too, the problem with getting companies to go public thank you for joining us today caleb, sarge, stephen guilfoyle. Were down over 1 for all three of the major indices the dow off 400 poipnts off the lows of the day. Much more cclosing bell after this. Announcer come up, market selloff. Were diving headfirst into todays plunging stocks from all angles and looking at where you can still put your money to work right now. Plus, the state of the union is just a few hours away. Well tell you what investors want to hear and debate whether president trumps speech can help get the rally back on track. Poan it here for the most poan it here for the most imrtt hour of directv has been rated 1 in Customer Satisfaction over cable for 17 years running. But some people still like cable. Just like some people like banging their head on a low ceiling. Drinking spoiled milk. Trad, camping in poison ivy. Getting a papercut. And having their arm trapped in a vending machine. But for everyone else, theres directv. For 1 rated Customer Satisfaction over cable, closing bell is back in a flash. Sno welcome back dow down 400 a bit, now down 358. The dow is the worst performer United Health, boeing weighing on that. Treasury yields ticking higher and holding above 2. 7 just as the fed meeting gets under way in chicago lets bring in Steve Liesman with more. Thanks very much. It is chair yellins last meeting and its time to grade the chair and grade the incoming chairman, jerome powell. We asked an extensive set to 40 spopd ents yellen a bplus in leadership, cplus for powell. Aminus for economic expertise just a c for powell when it comes to that category cplus and c for economic forecasting. Nobody thinks the fed does a good job on Monetary Policy a b versus bminus. Two areas our group thinks powell is better, regulatory expertise, bplus for powell and economic expertise communication, yellen does better and transparency yellen does better. Powell has four years to work at this hes not been at the helm. The overall grade here, take a look the next yeah, overall grade for yellen is a b, i believe yes, thats correct. For powell, a bminus. Not bad for an incoming chair. Take a look at the outlook for feds fund rate. 2. 2. Thats a bit higher than we previously forecast. The markets starting to build in that fourth rate hike. 3. 2 for the long run whats happening right now is very clear the market baking in better expectations for growth and along with that, better expectations for higher rates along with, perhaps, a little more inflation, wilfred. Yes, indeed thank you for that lets get reaction to that and todays market selloff chris wolf from First Republic private Wealth Management joins us chris, good afternoon to you thanks for joining us. As steve just said, the markets pricing in higher rates, whether thats the fed fund rate or the longer end of the curve. Do you think thats a key spot for the equity selloff weve seen in the last two days . Yeah, we do we think theres a couple things going on the higher rate story an interesting one. At the end of the day its sparked by realization were at peak liquidity, total 20 trillion over the last several years. Thats not likely to grow a lot from here. That realization is starting to dawn on markets coupled with the fact that i think you have some news items and the fact the market has become much more oriented towards momentumtype strategies meant that when you see corrections or see some of that news flow, we get shorter and sharper moves. Chris, whos angie . First of all, its a lovely name kimberly, thanks for that. A is alternatives. N is not, g good enough and y, yet. Angy we used to call it tina. There is no alternative in market so you bought stocks. Were starting to see the rise of an alternative. With bond yields at low levels and stock valuations at high levels, the alternative in some cases may be cash. You have to look at it after inflation. The real cash yooeld, if you take the fed funds rate or twoyear rate, for example, and some personal Consumption Expenditure is 50 basis points we have had a long period of negative real cash yields. Its now starting to be positive that could be april t tipping pt for investors looking at risk in this market. Do you think theres opportunities for people to be buying any of these dips if people havent got full exposure to equities . I think the answer is yes, as long as it meets longterm goals, you rick tolerance and those kind of things i think an interesting outcome is youll get a bit more opportunities, either as Market Segment or some stocks go down further than others or business dynamics, like in the Health Insurance industry, are starting to change. It will create those opportunities to be more selective and thoughtful in rebalancing your portfolios. That said if you own a lot of Hidden Equity risk, we risk market profiting where we go from here is outside u. S. Profit margins are improving and we dont believe its built in taking stocks outside the u. S. Ill game you when the dollar keeps falling. Thanks for joining us. Thanks. Chris wolfe the dollar is a little weaker today still below 90 on the dollar index. Markets broadly were seeing big selloff. Interesting the dollar was up 0. 3 today, down 0. 3 today. Its not got any correlation with this selloff where yields rising has a little more. Usually when you see panic you might see the dollar spiking. Not seeing that here the dow the big underperformer the transports are down 117. Russells are lower everybodys lower. A top technician checks the charts and gives us two names to buy on the dip. Can the state of the union ldi steady the markets . ldi steady the markets . Wel scuss what investorss think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Want before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Back on track. Blueemu products; nongreasy, deeppenetrating formula that works down into your muscles and joints and works its magic. Its comfort that wont u smelling like a football gym bag or an old catchers mitt or a shower mat in the locker room. How about an old pair of socks after an extra inning game. Blueemu, it works fast and you wont stink. Welcome back to the closing bell. Lets check in on markets. The dow down 1. 25 at the moment s p and nasdaq just improved to now be down less than 1 only three stocks on the dow are higher and fractionally higher and only two of 11 sectors on the s p are higher and only fractionally. What are the three stocks higher travelers, Procter Gamble and caterpillar. Very small gain. Caterpillar just went red again. Lets get over to dom chu at headquarters its tough to find a Silver Lining on a day when everything seems to be red. Like ug said, there are some positive pots on the marketplace. If you take a look at the sector action overall, it may be no surprise its got that risk on risk off feel by that i mean to say the defensive or less economically sensitive, bigger dividend paying sec stores like the utilities and Telecom Stocks are the relative outperformers in this trade here. Health care, we know what the drivers are with the Amazon Effect and energy on Lower Oil Prices well wait for that private Inventory Data coming out later today. Of course, Government Data auto oil coming out tomorrow. That will drive a lot of those sectors overall. As we talk about one of the reasons why maybe this isnt the huge panic a lot of folks are maybe trying to make this out to be right now, we know that Interest Rates are a big part of the picture. We know maybe rising rates is skauzing a little bit of the action in the stock market overall. In times like this, the tenyear treasury note would see maybe at least even a sliver of a flight to the safety bid. We know Inflation Expectations are on the rise. We see, perhaps, a fed rate cycle taking more of a hold in 2018 still, yields are actually higher on a day like today nol real bid for those safety of Treasury Bonds in todays kind of action. You wonder whether or not its contained to the stock market at all. Interest rate proxies are doing better today, dividendpaying sectors, but health care and energy are grabbing all the headlines. Well see if health care remains in that position going forward. Dom, thank you. Big story today that triggered that health care selloff was the amazon Berkshire Jpmorgan partnership. The three big ceos in terms of dimon, buffett and bezos, they had