The stock down 20 after withdrawing Sales Guidance and sales in the quarter tank. The sales down now fast and flawed and a big job for the new ceo. All of that and more ahead lets begin with this kind of like bed bath and beyond its been a wild 24 hours for your money moments after getting of on the air the news hit that iran launched missile strikes on two ira Iraqi Military bases housing american troops. Sending s p futures plunging then iran calmed down a bit saying it would stop if the United States didnt launch new attacks. Futures rebounded making up nearly all of the losses the market is open and theyre pretty much flat until shortly after 11 00 a. M. Eastern time that was when President Trump addressed the nation saying iran, quote, appears to be standing down. Just like that, stocks surge the nasdaq closing at alltime highs again. So, guy adami here we are, another potential crisis but more new highs what do you make of it. I tried to make it too complicated. Clearly i missed in terms of the Broader Market rally for sometime but maybe its as simple as this maybe as simple as if the fed adds liquidity on a daily basis. Well say by ierp of this year at current pace the Balance Sheet at record highs. Thats madness it doesnt matter the fact that paefs investing is a thing and money though flows into the market regardless of headline now, loss of life aside, i dont think the market cares regardless whether or not something did escalate last night. I think its so its so insulated fromoutside news tha it just seems to go higher. Hold on follow up on that what will matter. I dont know. Well. The fed. The Federal Reserve guy is saying this we know that the quarter of a trillion dollars of Balance Sheet added at the end of the year and we also any that were here on the show to not necessarily talk about the travesty and the sadness of life. We are here to talk about whats moving markets we can have a parade of economists all tell us the same thing. The geopolitics in the short to medium term dont do anything to change the economic path in fact im not going to im not going to simplify the trade war down to that but even that is we have had a cascade of economists telling us thats not changing the path and the economy is what matters for markets. I want to get the safety trade, risk reversal dan nathan, because interests more all the enough on the internet about maybe stuff over iraq you dont know the point is we are in a nervous market and should be how do we protect ourselves, if you are still as guy said passively putting the money in the 401 k 529, ir. A or whatever. Is there a way to buy protection. Its a good question. If you look at 2019 and chris v veren and were talk bag process this if you look at 2019, the s p 500 did have three peak to trough declines averaging about 6. 5 . Nothing horrible held the uptrend breaking out in october. Up 8 . Making new highs every day it seems like if you look to it spi. Aflt the futures saw futures getting hid and the vicks spiking a bit. Never up much. At the money s p 500, whether spx or spi puts out a couple months cost you a couple percent to ensure yourself if thats something youre saying i had a great 2019 im not certain maybe up 20 maybe we pulled forward equity return and given the headwinds and worried about maybe the next time there is bombs with gas and you may want portfolio protection especially if you want to let it run and not panic like we saw last night. I would say the 10day put call ratio is. But i want to make a distinction between a pause and consolidation or top and there is no indicators there is a top in place right now. You have 80 of stocks above the 200 thats a new broad market. Look at the high list. The risk on sexton casinos. Goldman sachs, brokers with. I think thats suggestive he of growth in 2020. Chris, the charts reflect what we know and the fear is whatwe dont know, that it may not be over. We could wake up one morning with headline thars worse. Lets hope not. But the charts wont reflect the geopolitical risk. I think the question is does the positioning reflect the maturity of stocks in the last 129 to 13 months the biggest increasing were in low vol stocks. I think the breadth of the market is impressive but what led the way is the triple qs. Megacap tech is up 6 to the s p during that time process and to what dan is talking about, i dont think people are worried about staying even from last year. I think what if anything what the market worries about with the geopolitics you are talking about brian is there is not a 10 putback. Its a 25 drawdown. Because people look at the absurd active the world. And then with a mind on 2018 and lived through that so if anything its the 10 out flt money that people should have the confidence to go to sleep and invest in the market until the banks and Central Banks pulse away the punch bowl this is growing. You mentioned a skittish market. 13. 5 was the vix was lower. Not at all. Ill say it again maybe im wrong probably but there is a bull market, a bubble in complacency. The fact that people continue to be rewarded, which is fine, for buying markets that, you know, seemingly just go up at a certain point that ends. And i think were a lot closer to it but i thought that for a while. I want to bring it home because we are talk talking about the geopolitical stuff one of the trades i thought would catch steam if we thought the trade situation as awaiting and Global Growth coming back a bit. I would have thought that u. S. Domestic names russell 2000 small caps would have acted better we talked about the s p broke out in late october and up 8 . The russell 2000 up like 3 its lagging not particularly impressive. The only thing thats saying to me is that the domestic, you know u. S. Domestic is paying more attention to the trade stuff. Maybe it didnt abate as much as we think it did in december. And therefore id watch that. Okay. So the big market turn around may be leaving some investors on edge or maybe not with the vix at 14. With you dow effectively traveling 700 points from the lows into todays close. How should you navigate the wild swings should you be more nervous than the market thinks joining us now is the chief Market Strategist tony divider you were sitting patiently listening to the conversation. My guess is you will say, no, there is not a real reason to be afraid right now. So. Dont put words in his mouth. I have a funny position. A the minute before the show started. Dont give away the secrets. The big balanced bull is the most bullish on the show last year i come here and to what weve been talking about before, brian, the guys printing the money keep telling you theyre going to print the money and we keep trying to figure out if its good or bad or right or wrong tp it is what it is. To your point exactly i feel like im the least bullish strategist right now everybody is ramping targets to 3500, picking the bears switching. Putcall ratios are historically thigh. The Money Movement to leverage funds, etfs, bullish ones is really rampant i really kind of i see about 5 upside. I also think you could have a 5 to 10 correction, just because its up too much there is too much euphoria. Whats up too much. Translator overall market i would say is up too much. Why too much. Why too much. By too much, i dont think its too much valuationwise or fundamentally. Fundamentally i think we can go higher over time but there is times in the marketplace you dont need to chase the next tick. With the fundamental back drop and credit and all the things and turn and pivot in the global economy. There is no way you want to be negative in my view. But there are times not to chase the next tick and if you wanted to buy wit for a pullback around were in that zone. Because i did read the notes, brian youre not concerned about the spread of junk over the Investment Grade and at 175 you you are talking about a pause. You mentioned valuations that worries me. Positioning is what it is but it can move quickly i look to price to sales and the ebidta and pe ratios and i see levels we havent seen since the most buberlitious times. When you look at the average multiple on s p 500. Its at 19 times when its and then back in the 1960s to me process, you dont even have to go back to find a higher multiple than were at today from the Third Quarter of 2016 through the Third Quarter of 2018 you actually traded at 19 or higher. So actually where we are or higher so you know these targets that we put out are ridiculous. Because you are guessing at a point of time in what it should be it should be 19 or higher. Im at 20 times getting me the 3440 could i make it times if i wanted to play i think its the process thats important. In early october when i sat on the desk and looked like the end of the world was coming and everything rolling over on the trade war and got pessimistic it was time to get in the game because the guys printing the money said they are printing but they are not printing forever. They may even start to reduce it at some point. This is heresy ready for this sfl yeah. In a primary currency you can print as much money as you want as long as as long as youre the primary currency the idea that they can not do this out of bullets is clearly by the expansion of the Balance Sheet not correct. So, again, i dont want to say whether its good or bad or right or wrong im not that smart when they tell me the game plan i dont want to be smarter than sfwlu they didnt tell you the game plan they said its not qe. No. Think about it they said it was a midcycle adjustment for the rate cuts starting in july but they said its not qe preponderate is nochlt qeing nothing to see here. But process dont matter. Think about it its it dont matter if its fo qe or not pach its money in the game the dovish pivot in early january was the game changer 1995 all over again when they went from tightening Monetary Policy to easing Monetary Policy and in an administration that was under duress which a analog tonight and the market gripped and ripped and went up 34 follow ed up with a 20 year in 1996. Almost 30 in no, 30 in 1997 0 we have to stop with this is all over it can correct i think well have a correction. Im asking people not to chase the tape but until you have excessive valuations, which i dont think they are to me on the operating earnings basis, or all the money is coming. Because microsoft and alphabet, facebook. Good point. Their earnings dont care. And they are structural structurally lower pes. Any dont care about baghdad. The high yield debt market is important. Would i buy high yield debt at this spread . Not a chance about you it tells us there is so much money available to companies to borrow, such a cheap interest rate. There is no way i should buy the house i can but i can because of the low Interest Rates can are the same way they do the m and a, buy barkers. Equity friendly. What turned it out is a credit not a lot of evidence of the credit event how does the dollar and rates factor is that a weaker dollar or stronger dollar. I love the dollar never positive for the mechanic. When its in the favor of s p when it hurts the company the dollar if you look at it the dollar index is at the same place it was at the end of 2014. Yeah. Despite all the calls throughout the period of how much it was going down. Thats which we havent talk about talked about the dollar index because its sitting flat. Tony divider great analysis appreciate the honesty and canneder thank you. S p targets dont matter. Never have, dude. But what does matter, guy adami . And you said i dont know. Everybody is buying the same five stocks. The triple qs and whatever does alphabet share if ships get mind in the strait of hormuz. Apparently not. In terms of the downside that was sort of my answer. You could have made a cogent argument that last night was the start of something clare i its not i dont know what the exoxygennous event was i think a weakening dollar could be that. The gold markets going up could be telling you something but to tonys point, the fed gives you the playbook and just play by their rules. Good discussion of the macromarkets lets turn to the other major story following up to the tragic airplane crash in iran the boeing 737 went down shortly after takeoff from tehran. Killing all 167 patterning and nine crew enemies. In the because of the crash is not known. Lets get to phil lebeau with more on this story at first it was mechanical failure. I heard you on this morning on squawk box talking about it. Has the narrative shifted at all as the day has gone on yes, yes its shifted primarily because this doesnt add up, brian. Increasingly when i talk with people who have been aviation accident inspectors or working with the ntsb or with the f. Chl a chl a who now do this for a richg will as a consultant whether with airlines, whether boeing, all of them said the same thing none of this adds up and their primary feeling is this look you dont have a plane two minutes after takeoff which is on normal flight path hits 7,900 feet, no may day call and then boom, all telementry stops that doesnt happen in mechanical failures. The planes are designed in an fire to give the pilots an opportunity to get back to the airport or find a place to possibly land the airplane none of that happened in this case which is why people are saying, okay, something suspicious here. Will we find out the answer . Maybe not. Iran is saying it may not turn over the black boxes or cockpit voice recorder if they dont turn it over this environment the odds are the ntsb and state department will never work outer a way for boeing or others to get their hands on the two it may remain a mystery. As you look at shares of boeing, yes, they were down premarket when word first came out about this crash came back a bit during during the day. I would say this stock is under pressure today brian, more because of thedown grade by cowan saying the max issues will mean a lowerfree cash flow. I think that had a better a greater impact i should say on this stock than the circumstances surrounding the crash, which with, again more and more questions than answers. And really suspicious across the board. Phil, how long you been covering the Airline Sector . More than well more than 25 years now. More than 25 years. We have seen black boxes not found. Unfortunately there are things in the middle of the sea you cant locates. Right. Have you in 25 years ever seen a situation where the black box is located but not turned over i havent seen that but thats not surprising. Look, the country where the accident happens, they control everything so if you have a country look if there was a plane accident in north korea, is it likely we get the black box if we wanted it . No and its a similar situation in iran right now doesnt mean its not impossible at some point iran may say here is the black box we are turning it over to investigators to analyze the data but at this point the early indication is theyre not planning on turning it over. No but the north korean air korea would be a 40yearold aircraft not a 3yearold boeing 737. Thank you, phil. You bet. Lets talk about the stock angle. Even though a terrible incident here tim on boeing we have to talk about the company. Thats what with he do. It was hard to believe the headlines this morning, especially as we were digests missiles from iran to iraq but when you consider boeing, ukraine, and iran all on the same sentence and a crashed airline, its so tragic. And the problem is here that if you looked at the stock, the stock didnt digest this in the way it was continuation of a mechanical failure tp it tells you the market believes is spurious because fast if dwas mechanical failure, the stock should be down more. There are big problems for boeing and arguably still people on the desk feels its a no touch. I havent been one with you i can tell you based upon this news today, i dont know why you need to buy boeing. Its that simple even though we are all speculating that there could be foul play, could not be. This is ridiculously tragic and boeing is still in the middle of this yet again. Well the Ukrainian Airline noted it was one of the newest and best jets. Thats how they zrabd it one of the best now we have a cant miss interview with carlos ghosn. Michelle Caruso Cabrera sat down with mr. Ghosn in beirut you will marry more of that scatrview with a more faining press conference this morning on fast money, right after this when you look at the world, what do you see . We see patterns. Relationships. When you use location technology, you can see where things happen, before they happen. With esri location technology, you can see what others cant. Looking to get your business off to a fast start in the new year . Its go time switch to comcast business and get fast internet on the nations largest gigspeed network. Plus, complete reliability with 4g lte backup. And, cloudbased security to help protect the devices on your network. Greenlight your business in 2020 with fast internet and voice for 64. 90 per month. Switch now and get a 100 prepaid card when you add comcast business securityedge. Call today. Comcast business. Beyond fast. Former nissan chairman carlos ghosn speaking out for the first times is since fleaing house arrest in jpen ghosn holding an hourslong News Conference in beirut the former executive denying acquisitionizations of financial misconduct and said he did not flee to escape justice but rather injustice cnbc contributor michelle Caruso Cabrera for a rare oneonone interview. Joins joining us live from beirut i dont know where to begin, michelle, because that press conference, that was something i dont think the Business Community has ever seen before yeah, it was pretty extraordinary to be there, more than 100 journalists in the room four different languages that he conducted the News Conference in, french, english, arabic, portuguese he didnt want to end until he got to everyone if possible. At first almost like a talk show host but then the photographers claimed they couldnt get good video so going back to the podium when i sat down with him we talked about a number of things. One of the things we discussed, why is it you think the prosecution against you in japan was invalid . And why do you use words like plot and conspiracy. Why would they want to do that to you well, i explain to you reasons, first reason is