Gains and losses for much of the day before surging in the final hour of trading. The dow travelled 5500 points in total when you add up all the moves. With yesterdays rally the dow and nasdaq recovered about half of mondays losses show you whats happening in asia. S generally improved asian markets were mixed, flat hang seng lower by almost 1 shanghai off by 1. 2 europe this morning, positive across the board gains of a half percent generally. Lets go show you whats going on with the yields which has been so interesting in the wake of that wage data on friday the 30year is yielding 3. 03 . Tenyear note at 2. 7 2. 76 we had gotten up to 2. 88 on monday that led to a lot of selling its a key level well talk a lot about as we move through the morning. Fiveyear note at 2. 49 the twoyear at 2. 0. Well have more on the markets as you can imagine in just a moment we have also a breaking Corporate News story making a lot of waves steve wynn is now officially out as ceo of his Company Following allegations of Sexual MisconductContessa Brewer joins us from carson city, nevada. She has the details. Good morning good morning. This marks a Seismic Shift for the gaming industry in nevada. If you look up and dont vegas strip, you can see the imprint of steve wynn everywhere for all that this is a publicly held company, this is really steve wynns company, one that he founded and loves as he said in a Statement Released last night. He once again tries to deflect blame. He says in the last couple of weeks i found myself the focus the avalanche of negative publicity. One in which a rush to judgment takes precedent over the facts, i cannot continue in my current role the board of directors said it accepted the resignation with a collective heavy heart. President matt maddux will take over as ceo in a Succession Plan endorsed by steve wynn maddux is facing tough odds here macau regulators sat down with wynn macau to demand exmra anything th explanations the nerve vad dvada gaming cont meets here this morning to discussion the investigation, and the Gaming Commission board is focused on the boards value to disclose that 7 7. 5 million private settlement between steve wynn and a manicurist in 2005. With these gaming licenses at stake, wynn resorts is pushing forward and trying to highlight the positive in its statement it says wynn resorts is committed as ever to upholding the highest standards and being an inclusive and supportive employer. More than 40 of wynn management are women, the highest in the gaming industry. The jeffries analyst is raising the prospects of who might want to come in and bye win resorts in part or some assets at a much lower multiple i was going to say, before you go, is there any other locations even in vegas or other places where you can see them completely lose their license or revisit that conversation . Theres some question i spoke to a source last night who says the idea that the nevada gaming control board is the Gold Standard of regulatory Gaming Commissions is laughable. But remember they have a brandnew chairwoman, the first time a woman has headed the gaming control board shes been on the job for less than two weeks this is a heavy burden to tackle well have to see how they approach taking a way a gaming license from a whole company, a company that provides so many tax dollars and jobs to nevada, it raises a lot of questions. What role will he play in this in the future he still has a huge presence in the company, shares. Does he just disappear so far the details of how he separates from this company have not been released. In fact, other analysts are saying theyre cautious about urging their investors to buy at this point because its not clear how the company proceeds forward with steve wynn, what happens to his shares. Hes now the largest stakeholder in wynn resorts. But theres a battle between him and his former wife and his former partner in wynn resorts this feels like a Travis Kalanick uber situation. Can we underline one thing. If you were running a con sewellsewell Consumer Products company, the Overall Company would not be worried about trying to sell product on the shelves of supermarket gaming is unique, they can really lose their ability to function what about the nfl . There you have businesses that operate with some sort of oversight from the league itself, theres another industry where you cannot but theyre not publicly traded thats true im just trying to emphasize the fact the reason this guy may have to step down, if they lose their license, they cant function no, no. Theres no process here what about a trial for this guy . What about shining the light on it and fining out what happened before he loses his license . This is wrong. Can i ask a separate question guys consumer issue. Do Consumers Want to hold their convention at a wynn casino . Im not going to make it political, we have the situation in maralago with our own president. Maybe not after he gets his day in court after all these allegations or claims are presented. Its not just the issue about regulation, its about the Consumer Behavior as a function of it. The revenue to the company. Can i weigh in on that . Go ahead. So, last week i talked to people who were at a cofrens nfe of women at wynn resorts, i asked if there was any uncomfortableness being there. They said, no, we can separate the man from the company the wynn standard of luxury is unparalleled in gaming nobody else can offer that level of luxury service. Not that we have been able to find out and report, with the exception of the republican governors association, we have not seen a drop off in Group Bookings the second thing is no one is saying none of the regulators are saying theyll lose their license. Theyre just taking a hard look. In massachusetts they had all of these people that individually they had to go through a qualifying process, that included steve wynn and the company itself the fact that the board did not disclose voluntarily that 7 7. 5 million settlement, which now it has told the lead investigator it knew about, but didnt disclose it at the urging of counsel raised some red flags for them but no one is saying wynn will lose their license theyre just at stake. The way the company proceeds will be important, which also leads me to look at even the statements theyre sending out have been side by side, the Company Statement next to the Wynn Steve Wynn personal statement. Theres going to be a lot of questions about how independent this independent board of directors really was when the wording says we have heavy hearts as he leaves. That struck me in that statement. Exactly i will assume that the company did not pay the 7 million. He personally paid the 7 million to settle something. Im not sure they have to disclose that. Im not sure the company broke any rules. I dont endorse his behavior but we are losing due process in all of this stuff. Look at the ceo of lululemon he had a bad date with somebody, and now hes out thats what it sounds like im not comfortable with this anymore. Its too crazy the investigations are due process. He lost 20 of this companys market value so far on allegations. Hasnt he been punished enough many, many, many allegations. Let him have his day in court. I imagine well talk a lot about this a lot today back to the markets mike santoli is on the set what do you make of this wild market wide . Why are we seeing this volatility its a classic picture when you have a sudden sharp drop, and it strikes investors who are unprepared if the market is so calm for so long, people will be unprepared. Yesterday the market bounced where it had to. You had such a washed out market monday night into tuesday, if we had not had these deep readings, you would be more concerned. We have high volatility and low conviction trading you dont know if investors are trapped out there, need to sell. Volatility is still elevated you could make the argument that the peak of the fever might have broken we will have to see if thats the case im still curious as to whether we get refocus on earnings if the market itself starts to settle down a bit. If we have people reassessing the fundamentals i think its caused everybody to decide do i have the right risk levels, right exposures . Theres talk about large investors, they dont necessarily have to sell but theyre saying if this is the new volatility levels we have to deal with, if we cant assume its going to be a calm march higher, we are too exposed to equities so risk parity is the phrase that a lot of hedge funds use, and most investors think ill have some money in stocks, some money in bonds hedge funds dont think of it like that. They think what are the levels of risk associated with every asset atility is low, risk is low. If volatility is higher, they have to reduce their exposure. In general, thats the case you say its safe to own this much in the way of market exposure if volatility levels are low. It reminds me of these markets of 2011, where everyone agrees on the fundamentals pretty much in terms o fundament fundamentals, market fundamentals, but what are you paying for them today . The volatility levels dictate that explain whats happening this morning . This is what you do when you try to find a bottom you have to keep testing yesterdays final hour of trading, that was just, wow, maybe nobody will come in and slam this market down in the last hour. And these volatility funs liquidating will not take the market down. Lets get back in there and pick some up. Heres for context yesterdays rally, total rally, half of mondays losses, only 20 of the total decline since friday january 26th. You look at the chart. The chart looks broken look, this is a corrective period thats what happens. You try to have these aftershocks around the low you talk to technicians, thats what we get to some technicians will tell you were there. Others will say theres more to ride most stocks very well may have hit their low in the intensity of the selling monday and tuesday, but the overall market here is my analogy in the nfl, the market has to go through the concussion protocol. You have a nasty hit, you have to see if the market responds properly to stimuli, watch and wait lets add a few more voices to this conversation joining us is jim carin, our guest host for the hour is bob doll and kevin oleary is here. Bob, is the worst over i believe so. I love mikes line the fever has broken it doesnt mean its back to normal well have more volatility but i think the last two days were big attempts at finding the bottom in volatility, in force selling, deleveraging, taking risk parity portfolios back to normal we will get back to fundamentals fundamentals are not the same as they were. Interest rates are higher, volatility is higher but earnings are fantastic can i ask a simple question, after all this is over, the foo fever is broken, are investors going to be willing to pay 17 times or 16 times . If they only pay 16 times, we have another 14 down. I think 17 is more like it our view is the end of the year pe will be lower thannian iajan 1st. We had six straight years where the stock market lagohas gone u more than earnings so youre comfortable at that with a 3 handle on the tenyear. Its an adjustment. Low vol, low Interest Rates, low inflation, high pes, we will adjust that some to a more normal environment, if we can remember that. Last couple days was an adjustment get the chiropractor in. Brian, what do you think investors have been clamoring for a correction for a while now. 2017 was the first year in a very long time we didnt have a greater than 5 correction so it came a couple weeks later. When i would get concerned about markets i have a little dashboard i look at. I would see inflation significantly higher in the United States. A fed raising Interest Rates, long rates coming down, converging with short rates, credit spreads blowing out stronger dollar, not just the last couple of days. These types of moves dont particularly concern me. I gragree, this is a new paradi but not one that the the end of a cycle. Investors should see through this volatility. What is your underlying assumption of what the tenyear will be in. I would not be surprised to see the tenyear creep higher. If you were to say to me over a sustained period do Interest Rates stay at 3 or move closer to 2 , i would say closer to 2 because of high Savings Rates around the world, because of an aging population i think we can see 3 , i dont think were sustained there. I would be in the low for long camp jim, you tell me, what do you think is going on with the tenyear i think when these events happen, theres two questions. One is what have we learned. Two, what are the questions we have to ask going forward. What we learned is that the low rate low volatility environment is probably coming to an end thats the ending stages of quantitative easing. This is happening in a slow process what this does, when you end qe or move into this stage what qe did was depressed Interest Rates, depress eed volatility thats now slowly starting to turn and slowly starting to come to an end. Asset prices are trying to find that next level of risk premium. Kevin was discussing what is the multiple the market is trying to pay . Thats the right question. Bob was talking about at what level of Interest Rates do we think we can settle at what is the new range . These are the right questions to ask. The range on the tenyear is closer to the 2. 50 to 3. 25 than 2 , 2. 25 . In the process of risk premium readjustment thats where we will find the new levels and ranges for the novice viewer, when Interest Rates start to rise, you are willing to pay less for earnings of a company, right either because it provides competition or theres more uncertainty down the road. Thats when when we talk about the risk premium coming down, the multiple can come down on the market. Thats why the e is so important. The only thing is that the longterm historical e is 16 and change and the other is 17 and change if you think were going back to 16, you have another 10 down every day the rational optionor looks at these two or buys stock in the companies i looked at it yesterday, i said i cant get to 2. 75 on five years, i would rather own equity but it changes at some point. Thats my question, at what point would you take your next Million Dollars and say im not buying stocks, im going to buy the bonds of the same companies. If the tenyear is going to 3. 5, earnings are probably good. So we get more e and less pe theres no fixed relationship thats the key here. When the market was much more expensive for one time in history than today, in the late 90s, what was the tenyear . 6 the math doesnt always work out that way the number one question, where do Interest Rates settle in are we in a 2. 75 to 3. 25 world if thats the case, equities do well well do fine. If we move back down to a 2 level, thats a different story. What about 4 . In my view thats a problem. Good discussion thank you very much. Coming up, well talk disney shares rising this morning on the back of an earnings beat that story next and look at the futures. We are down triple digits right this minute. Well show you some red. Mr. Wonderful is here but it aint so wonderful dow jones looks like it will open off 303 points. Nasdaq down 75 s p 500 opening down by 25 points were back in two. Ronoh really . Gs going on at schwab. Thank you clients . Well jd power did just rank them highest in Investor Satisfaction with full Service Brokerage firms. Again. And online equity trades are only 4. 95. I mean you cant have low cost and be full service. Its impossible. Its like having your cake and eating it too. Ask your broker if they offer awardwinning full service and low costs. How am i going to explain this . If you dont like their answer, ask again at schwab. Schwab, a modern approach to wealth management. Lets talk about some Corporate News disney topping wall street earnings expectations. Thats thanks in part to the success of its new avatar land shares rising on that news the ceo spoke about the companys theme park performance last night on the closing bell it starts with success across the globe. Particularly in some of our international or in one particular International Resort in paris that had a number of years when the numbers were not that good. They improved substantially. We also had record results for domestic operations, record revenue, record bottom line. Its an across the board Success Story and includes the cruise ships. Iger also saying the company will be launching the new espn plus streaming service this spring and one version will cost 4. 99 a month. It will offer a range of live sports and events that wont be available on current channels. If youre a star wars fan, the creators of and writers of game of thrones are taking over that project. Very excited about that that could be a come thing. Does disney trade on earnings or whether they can execute on the espn plus . Its not just the espn plus the over the top. The over the top. Whats not been fully addressed is once the 21st century fox deal is fully integrated, how hue l hue ll lly hulu could operate. Comcast could take a shot at fox. We talked about that the day the deal was announced you saw the story on monday that theyre still considering it when that story broke, comcast fell, disney fell. People keep talking about the cash flow of espn. Igers theory has always been this has a long tail when i monetize it across the stop, and you want to watch your lacrosse game from bc, you can do that. If that doesnt happen, this thing goes back into the 9 0e0s because you dont have the content . You have to get all the naysayers that you have managed the decline of that. Thats 40 of the cash flow. If youre buying the fox assets, you make espn smaller. He also said the pace of decline in pay tv subs did ebb a bit theresno question, if you have young children, you will buy that over the stop stuff of course back to the broader markets