The dow, s p and nasdaq all now negative for 2018. Thank you for being with us tonight, everybody lets begin with guy adami guy, after a week of reckoning for stocks we are left with a hard question. Is this a healthy run of the mill correction . Or the start of something bigger, perhaps a bear market . Because i can say that thousandpoint drops have really never happened in the market unless we have a serious, serious issue. We have never been this high. To tims point. And you know this, yes, at 27 n. O. W. In the dow 1,000 points is obviously different than at 15,000 in the dow. Obviously it creates headlines because it is a significant number for context, though, the levels where we are now in the s p and the dow jones is where we were at thanksgiving. At thanksgiving everybody was talking about how great the market was number one, im not dismissing whats going on. What i think is happening here, clear of what everybody has said, volatility has taken over. Stocks have become Collateral Damage the have tilt this will be over in my opinion when you see headlines about a hedge fund and or some banks derivative book blowing up i have not seen that yet when you start to see those headlines i think thats the ninth inning. Tim seymour, we deal in percentages, not numbers and as the numbers they get bigger, if you know what i mean however, this is the fastest move into a correction in the dows history. The speed, does that worry you i dont have my history book out, but yes i dont think guy is being sanguine in any way. I think he was pointing out there are a lot of factors at work here. The me what troubled me on monday, tuesday was that people want to put this in a tight little box and say this was about reversed fixed funds there is no way this is about reverse fixed funds. When people say the technicals on the mabt are what have changed not fundamentals you cant tell me that this gets into our volatility conversation, once vol has changed so much, equities are a very different investment. Whether thats temporary or not. Thats the environment we live in and it does affect equity valuations. I think this vix change is clearly its very, very dramatic, but i really do think its going to be somewhat shortlived. I think to guys point, if there is some derivative book or many derivative books in the process of unwinding that that will be interesting. But what weve seen over the last 20 years probably spikes in the volatility like this, they come down. They go up super quickly and they come down quickly as well i think we are going to see that here i think we are much more likely to have a down 1,000 day near the time you had another down 1,000 day. That those two things are more likely to happen together than separately. I would say what is different over this last 20 year period when you think about the top that kopd in q 1, q 2 of 2000 and in 03 it picked up at highs. And Interest Rates were much higher if Interest Rates are the reason we are seeing volatility up more than 200 from the 20 ott low then we have got a problem this this starts to snowball. Im not trying to sound like we are at the precipice of a crash but i remember those tops clearly and there were periods of euphoria that went into them. Levered. There is still a lot of leverage look at the Financial System now. Compared to 2007 in terms of leverage in a all that corporate debt has been transferred to sovereigns its more dangerous, in my opinion. When the thing finally blows up its going to make 2000 and 2008 look like a walk in the park dont forget this. The bear market that we lived in in 00 didnt end until march 2003. Can i walk you down a little bit. I kind of agree with you i dont agree that this is going to look like a walk in the park. That was nightmare on elm street ultimately we have a case where the ecb hasnt made a move the bond made a move, the ecb is further behind the curve they are the ones when they start taking the rates higher, they have said nothing about tightening when they do, our rates go higher what there is is the biggest experiment ever. Without trying to scare everybody, the reality is there is more liquidity squashing around there than ever. Ert that 15 to 20 trillion on Central Bank Balance sheets, which we have never had before. We also havent seep this ind of a market in years. We have a lot of Financial Advisors who never rate operated in a rising Interest Rate environment. Last time we had one they would have been in college or getting their mba. They never managed money in this period forget the numbers we are seeing the dow move 2 in 20 minutes. I would add on top of that the passive investing, which is whole different conversation but these roboadvisors as well its great on the way up but on the way down i dont know how its going to work frankly, nobody knows how it is going to work because it hasnt happened yet ill add one more thing to this equation again, i believe, correctly or incorrectly that all Consumer Confidence is is an overlay of the Dow Jones Industrial average. Say im crazy, say im not but the two basically trade hand in hand at what point does Consumer Confidence take a dip down and a pull bakken spending our economy is 70 driven by the consumer if the consumer eases back on top of the stock market move then it crumbles on itself what put us in this situation. 3 gain in wages in the last payroll number corporations passing tax cuts through to their workers a great i think this if anything, that front loads a lot of this disposable consumption story. To think that Central Banks first of all can control the bond curve we know the fed cannot control the curve. It controls the fed ultimately to say this can be an orderly move in intrarates i dont want the scare anybody netflix is up 30 . Fundamental dont matter in this atmosphere. Getting back to technicals you have a lot of stocks that didnt move anywhere near where they could move. They do matter. Facebook, google, apple down. Snap up 20 yesterday. Twitter up 20 they are buying it for a reason. Fundamental inpuchlt it was a fundamental input that got people to sell apple and google last week. Fundamentals are important cramer has been saying this all week at the end of the day. I would like to agree with that and say im hearing too much its about technicals when i dont think it is. I think fundamentals are changing in front of peoples eyes. We are going to start see dispersion you are going the see companies rewarded for good valuations and good fundamentals its going to be separated from whats going on in the market see relative strength. Those are the names you did off on the long side. Tim, you said its impossible its caused by the short volatility product. I dont think it was. We disagree 100 with that. I do, too. Baricallys put out a note two days ago saying they thought 200 billion in stock could be sold over the next couple of days to pay for continued unwinding of this volatility trade. Is it possible, improbable or possible that this whole thing is being caused pie a couple of idiots in a dark corner of the stock market. No way. Two has to the broader than that can it cause the whole thing no but i think it can contribute significantly. This reaction i think you flow a rock into the water and it ripples a lot and then it calms down i think that calm, those fundamentals i think it does matter today i bought intel they had great fundamentals dan two week ago i know you think some of the techs didnt have great fundamentals they did. I know. I bought it at 44 there it was trading above 50 this after they reported a great q 4 and i bought it. Its 43 and change. Nvidia is up. What she is saying is look beyond this period we may remain volatile, lower or higher, but you still have to put money to work. You but have to put it to work tomorrow. We may be putting money to work in a higher volatility environment for a substantial period of time also at a higher Interest Rate environment for substantial period of time which changes equity valuing as. Lets continue the conferring the next guest, called this pullback and provided a game plan for what to do had he it strikes. Listen okay. Heres what you do if you are way over weight and leifered into equities, cut back to a neutral position. If you are weigh overweight the more aggressive and high cyclical areas, neutralize a little bit when the market does come n its coming in now its coming in i really believe its coming in. Then you can add into it versus you can relever into it get aggressive into it versus chasing here. Lets bring in tony i have got apologize, as part of the media we are looking for blame in this. Right now its past the point of trying to figure out what has happened and more to the point of when does it stop, and what do we do do you see any kind of a had he we are losing 400 points in the last 30 minutes of trading and enon our lows of the day it tells me tomorrow may not be the end. What are you seeing . I think that has to with market strurmt lets talk about the etns, is it the volatility trade . Thats the gun you need somebody to shoot the gun. To shoot the gun you need record low volatility for a record low period of time so it was an easy trade in human nature. This is a human nature game even if Software Programs are kicking it in. What you had was way too optimistic of a view rememberer whats not in that quote is you were down to 12 news writer letters being bearish. When that happened in the past guess what happened . What happened . When you get that kind of bullishness with that kind low volatility and sentiment the market became an annuity. What the trigger is, yes, you have higher rates. I have got two times this cycle, 2014, 2016 where you had inflation break evens higher and trending higher and trending high higher and Interest Rates doing the same thing there was a combination that came together. I believe brian this gives investors an opportunity we have a steep yield curve. We have earnings per share that just keep going up its like one of those things. The data that i can fine, just the give perspective to the viewers i went back and looked at times where you had a tenday rate of change on the s p 500. In other words, what did it do for the last ten days . Lets forget about opinion and go with the data the only times that you have had such a significant rate of change down ward in ten days were 1987, 1997, 199, 2 to 0, 2002, 2011, low, 2016 low. Today. What do you want to do im promising you its going to stay more volatile thats the history of it when you look ought two, three, 12 months we are going to be up. Until you invert the curve, shut down credit totally not because the equity market is down, but totally shut down credit, we are going higher tony, one of the thing you said spot on. Without question one of the things you have said is this will end badly and your time horizon for it has typically been 18 to 24 months for it there any chance whatever is happening here, that we all have disagreements on is systemic and this end badly, are we are we potentially seeing that now . Or is it way too early to tell i think that we made a top. Clearly we made a top of thats an idiot statement of course we made a top we are down 10 in a week. The top only comes with the inversion of a yield curve in a credit driven recession. We are still because its steepened we are still nine the 12 months from that. From there you go 15 to 24 months before you go into a recession. So, again, i think this is one of those times where i hate to be on set and kind of sound like its no big deal it is a big deal people are losing money. Its down 10 in a week. That is the opportunity as long as you stay with the game plan the game plan is you wait for the correction and buy those areas that do well. Tony agreed but from a valuation perspective, higher rates and a falling dollar make the dollar of earnings worth less do they not . The call i have had on the desk, the call i have had with the clients and the call im going to make right now is the dollar moves relative to Global Growth expectations, not Interest Rates tim has been on this a lot he knows this trade. I neutralized my dollar view i was negative on the dollar a year ago tim and i now everybody is negative dollar. When you have global synchronized easing thats Global Growth friendly the there are a is going the weaken when you have global synchronized monetary tightening you are going to slow down Global Growth and you are going to eventually hit emerging currencies im neutral dollar, neutral em over dm, neutral dm over u. S i think as we are transitioning you want to be neutralized in all those things, stay in the u. S. And have a solid exposure in the info tech and industrial space. Thanks for coming on here. Thanks for pressing me to give that statement. Karen, do we its hard to tony made great points. Yes when you are at home and you see the dow down 2,000 points in a week or more its hard to stay the course. Right. Whats is your advice mine is absolutely not only to stay the course to extent that you have any cash that you have been waiting for something to use kudos to tony for an outstanding call a couple of times i would be putting that to work right now. Its interesting that our emotions i think tell us to do the opposite of what we should do stay the course. I agree with most of that i agree that i dont think you have to do a whole lot here, frankly. I do think this is setting up for an interesting buy opportunity. I would be more cautious on my timing i just want to see more dust settle i think there is a lot of moving parts here, which includes high yields breaking down there are other place where is the conditions are tightening and the dollar hasnt started the move you cant time any of this no one is going the rinne a bell if anything i would border on doing less than more but i think there is a lot of moving pieces that i dont need to chase tomorrow. I dont think you buy kilos like today you want to buy a down opening after a day like today after some reversal and that should make you feel better about it. It all makes sense the only thing i take issue with is if you are long and havent sold anything and its down 10 , it doesnt mean you have to buy anything to my eye it looks like its going to 2500. And huge support is down at 2400 and thats where i want to really reload hard. Good stuff there. For more on the markets be sure the stay tuned here of tonight tune into cnbcs special report, the markets in turmoil a few us will be there at 7 00 eastern time. Coming up on this program, fur worried about bonds taking down your portfolio, do to the panic. You shouldnt panic anyway we have got you cuffed greg davis from vanguard will be here to break down dos and the donts. Plus apple is doing something that has Karen Finerman buying it for the First Time Ever. Will that convince you to buy the stock . Stick around the find out of the. Later on we are obviously all over the after hours action as well. Nvidia reporting their numbers that stock is up we will get you for and details from the call. Much more fast mone sait ead. Ytrgh at holiday inn express, we cant guarantee that youll be able to contain yourself at our breakfast bar. Morning, egg white omelet. Sup lady bacon fruit, there it is but we can guarantee that youll get the best price when you book with us. 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Lets focus now on the stock that is certainly known around the globe of the that is apple of it stood strong much of the day but succumbed to selling later on apple also in technical correction, down 14 from its 52week high and something had Karen Finerman hitting the buy button on the stock today for the First Time Ever karen give us your past pitch on an snooel this is why i bought apple of the as always for me, valuation is really important. And its the top of my list. The valuation, if we include the repatriation gets a p e multiple for this company that is dramaly below the s p multiple i think it somewhat, but not a discount of over 40 to the s p multiple that is significant to me. To buy a company with earnings like they have, i real they can lmpy but that discount seems excessive the me the second thing that i like is expectation force the x has been tampered thats good. We like when expectations are low. Its easier for them to meet them or surpass them the third thing i thought was interesting was the services revenue, a mice high margin revenue they have done a better job than i thought apple music ive been impressed with the competition that they have set out, with spotify, they are overtaking spotify thats been an impressive growth driver for them. I think we will continue to see more of that lets look at the the chart. The last six months it is retraced here. All of anything past northeast. Past november all of that benefit of tax reform is gone from apple and this is going to be a significant driver for them. Putting all of that together, significant selloff, i think its time to buy an snooel karen, what do you think is more important margins or for these guys the top line . People are divided on the company . Obviously both. The me i kind of like motherinlaws better. Thats more important. I also like recurring revenue better thats more important the me so thats what i would be hoping for and i think will drive the stock. On the margin front this was something that was evident, obviously they had great margins but at the expense of their customers. We had a conversation about Consumer Discretionary spending. Did this company ratchet up the price of their phone one of their phones