12 Million Barrels a day, flooding already saturated global market. That saw crude drop 30 . 10year crashed below 50 basis points and now there is concern we could join other western nations with negative yields, japan, germany, switzerland, netherlands, belgium and france. Major markets around the world before the u. S. Opened sparked enough selling for Circuit Breakers to limit preopen downside. Those limits are drifting in, Circuit Breakers once trading got underway. To discuss, erin gibbs and Capital Wealth Planning chief market strategist, jeff saut. Jeff, great to have you in studio. Pleasure. Connell charles my man, youve been calling it up and down. Youre reworking mod tell feverishly as the numbers change dramatically minute to minute. Where are you now . I was on your show in january, short term signal ad sell position. We told me to sell positions and raise cash. I didnt think it would be this bad. We were dealing with the virus and bernie surge in the polls. This collapse of oil caught me entirely. We broke major support points. Like the heart patient doesnt get off the gurney and run the 100yard dash, this will take a while to con have less. Charles dont lay there, get the circulation going. People looking, when is the market getting up, were not looking for the hurdles but show a little resolve . This is interesting, we have such shortterm memories. We had a crash much like this, similar sort of level just in the Fourth Quarter of 2018. Less than two years ago. It took less than six months to rebound and rehit those highs. We could see a rebound just as quickly were seeing the downturn. This could be something that takes fourfive months to really play out for the fears to be resolved and four to five months to rebound. I really want to remind investors unless youre willing to pivot so quickly, if you have overexposure to equities you needed to go into bonds which were seeing now this, is indiscriminate selling. Not like people saying oh, im selling airlines, im getting out of all equities, unless you really need to relal reallocate from equities into bonds, you can see stokes rebound. If youre not ready to get back in, dont have the once bitten, twice shy mentality to say in the markets, we still have a Strong Economy to help push us through this crisis. Charles, one truism about panics is there is us a recovery. Charles right. But also the other truism, it is hard to model when theyre over, right . Thats right. Charles in this, you know, talk about 2018, a lot of commentators comparing this to 2018, i think take either one of those, there were really serious structural issues back then, particularly of course 2008, that augerred for a longer term recovery process, more legitimate concern than what we have right now this is something that is very unique, not to panic part, jeff, you know what is causing the panic. Joe crandall was original thinker with a bunch of indicators in the 50s, an early 60s. One of his indicators when you see 1500 to 1700 new lows, youre near a panic low. We got there this morning. I would remind investors, a lot of this started mainly from the energy selloff. In general when Energy Prices tank, you see fallout from the energy sector, those companies are a very small part of our economy and low gas prices, low oil prices actually tend to help arrest panic t tends to be beneficial. Charles north dakota, other parts of this country, ah every trucking, every airline, amazon, every Delivery Company saying yea, everything is cheaper to operate. Everything is cheaper to operate off off oil. In general, lower Energy Prices actually tend to cabinet positive and i think that investors have clearly forgotten that today. Charles what is it about right now . Because, jeff, the point is there is no place to hide. Commodities would be safe havens. I saw gold stocks getting hit. All socalled coronavirus stocks. There is no place to hide right now. Have we triggered something that has, that has revealed a weakness in market . Some people stay over leveraging or credit issues. Is Something Else going on . Have we discovered something accidentally we should be paying attention to . When you get into a selling stampede were involved in, they usually last 17 toe 25 sessions with only one to three session countertrend bounces. I havent done the day count where we are in this one yet, there is no place to hide. Look in 2018, there was nowhere to hide accept cash in 2008. We have decent cash position, having raised cash in midjanuary. Charles speaking of 2008, Lloyd Blankfein who is trying to be the voice of reason today, for those who havent been in the market long enough, he was the ceo of goldman sachs, somewhat after controversial figure, but played a big role in the recovery of our markets back then, he put out a tweet there, fear can take markets lower, but expect quick recovery when Health Threat recedes. United states underlying economy strong, banks wellcapped, system not too leveraged. Unlike 08 well avoid systemic damage that could take years to work through, obviously not ignoring the tragic human toll. On friday the atlanta fed went to 3. 1 gdp estimates because of the strong jobs report. Were almost over with earnings season. Much better than expected bet. The momentum was undeniable. 730,000 people got a job in. Country last 90 days. That helps buffer uncertainty that is certain to come. Absolutely. Weve seen strong participation rates, weve seen wage growth. This will not erode in a one month, three month period. I do see, while the stock market was definitely overpriced when we came into this pointed out many times on the show. It was, and it is still on the expensive side. We could easily go back down to another 10 from here that would us back what it looked like in 2018. Charles hold on one second, erin, jeff, i will be right back. I want to check on oil prices. This plunge is remarkable, folks. On reports that saudi arabia slashing prices and increasing supply after talks with russia collapsed. Crude prices down 22 earlier today, the biggest loss since the launch of the gulf war back in 1991. Founder and editor of the schork report, steven schork. Thanks for joining us. Great to be here, charles. Charles great to have you. Undoubtedly one of the best to on this connecting the dots. That is what im having a hard time with this. Connecting the dots, oil goes down precipitously and Everything Else goes down. Why . Saudi arabia initiated a price war with the russians over the weekend by cutting their official selling price but lets keep in mind this price action has very little to do with saudi arabia per se. This is payback from russia. Charles, remember two weeks ago the Trump Administration slapped the trading arm of russias largest oil company, rosneft for its dealings with venezuela. The fallout from those sanctions are going to mean, russia, rosneft will lose market share for crude oil experts to asia, european and of course u. S. Buyers. At the same time the United States has been net exporter of oil, crude oil and product since october, 150,000barrels a day. In last weeks eia report, u. S. Crude Oil Production hit an alltime high of 13. 1 Million Barrels a die. Those new exports of u. S. Burgeoning market are going to take market share away from rosneft. So russias decision not to back an Oil Production cut with saudi arabia had less to do with saudi arabia and more to do as a response to these sanctions to its largest oil trading company. So this is absolute price war. Charles the rationale, you have to go to the last punic to find the rational. Are there any winners . No there is not. Might be a suggest scharre guy, consumer paying extremely low for price of energy this is a potempkin village this is not a good. Low oil prices do not drive economic growth. Economic growth drives Commodity Prices and what we did see coming into this was already decrease in Energy Demand because the industrial side of the u. S. Economy, the industrial side of the european economy, the industrial side of the asian economy have been in recession for at least the last three to six months. Weve already see that knock on to falling Energy Demand. Now you add in the coronavirus, you run the risk of that demand decay not stance firing into the consumer transpiring into the consumer level this is not a good thing for consumer markets. Charles is this some epiphany of supply you . Started saying we have a record amount of production. All the nations around the world, some offline coming online, arent there limits to the amount of supply no matter how great an economy is . There are limits to supply but were in a major pivot in the world oil markets because of course we have substitutes in the markets. This is not all oil driven market for transportation needs. Were talking about evs. Were in a great pivot. We have too much supply, not enough demand on this market. Fortunately we went bearish in our report, our january 24th report because we did start to see telltales of knockon of this overhang of supply greater than demand and heck, just last week 5. 6 Million Barrels at 40dollar strike put traded. Clearly the market was giving us a signal it is still oversupplied and clearly the decision by russia, reaction by saudi arabia, signals that were going to be looking at Lower Oil Prices for much longer time than most people can appreciate. Charles is it too early to try to figure out how long this lasts . At some point, im not sure how they do it but saudi arabia and russia probably have to figure out a way to come back to the table and turn this around . I think its, saudi arabia, russia, and i think it is the United States because i am a big believer that this is in reaction with these sanctions on rosneft. Those sanctions are going to have to be lifted by the United States to get russia to act this is more in the u. S. s court than it is in saudi arabias court. As far as longevity, that will be a geopolitical concern. As far as price reaction, models weve been running and weve been reporting we had the downside of 36 to 34 a barrel. Of course we overshot that, 27dollar low, peak to trump decline, day over day of 41 . We didnt see it to that extent but we have, retraced, were in the bottom range. So we can hold prices at these levels. Charles all right. Steven, thank you very, very much. Always appreciate it. Thank you, charles. Charles for more on plunging oil price i want to bring back erin and jeff. Jeff, listen, stephen is great, he tied in whole political aspect to this, even bringing in the u. S. Part. Who knows what is going on behind the scenes but certainly it comes back to the dynamic of supply and demand. Geopolitical aspects always trigger shocks. Normally an upside price shock that trigger recessions in this country. I never heard after downside supply shock in oil tricking recession. I absolutely agree with that. I see nothing on the that tells me people on your show telling me for three years were going new recession and telling me earnings will not come up to expectations and they have been dead wrong. I think theyre dead wrong here. I would comment that crude oil over time typically tracks its incremental cost to production. And the incremental cost to production is higher than 32 a barrel. Charles i mean he did bring up evs which i thought was intriguing. The idea well go to a world, so weird with the coronavirus feels like it fast forwarded us. Talking about worklife balance, people dont go into the office. This world where we do more things online. This world where we dont use as much energy. This is a world promised to us supposed to be amazing but were living it today and it dont feel so good one i think definitely there is opportunity for new technologies to take advantage of this fear and that might help Certain Companies but overall yeah, to jims point we saw a slowdown in industrial production. Because out of china we knew they were slowing down this sell off seems like massive overreaction. It is a price war. The drop in oil prices is overreaction. Reaction with the stock market is another overreaction. I would see, certainly reasons for some concerns, the world economically is never going to be perfect. There will always be areas of concern. Charles right. I think overall, were still very strong on. U. S. And i just see a lot of the selloff as being overreaction in fear, that changes how we have to behave. Charles jeff two, themes i had last week, one, retesting the march 28th low which we didnt do last week. We obviously did today. The notion that the individual investor was still too optimistic. In fact the American Association of individual investors saw bullishness climb eight Percentage Points in a single week. Are you in that camp, that the back of the average investor has to be completely shattered, their dreams an hopes about making money in the stock market have to be erased, they have to say no mas, throw in the towel, that is your buy signal . The, i go out, charles and do seminars for four or five, 600 individuals. I did one at the traders expo in brooklyn and the individual investors i see are not optimistic. Theyre not just cautious. Theyre scared to death and i would note that in the long run in Business School they teach you it is all about earnings but i can testimony you after 56 years of looking at markets and 50 years in this business, that in the short run, the stock market is fear, hope and greed only loosely connected to the Business Cycle because people dont follow the main tenet in ben grahams book, the intelligent investors, says the essence of Portfolio Management is the managing risk. People do not manage risk. Charles speaking of benjamin graham, i thought Warren Buffett had great letter, retained earnings. Great companies that will come back. I think we get over, we start to look at stock price, and share price, instead of looking at the idea, of the notion, erin we own a business. Do you think apple is an amazing business . Do you wish you owned it three thursdays ago at an alltime high . The answer is probably yes. I agree. We still see even within the markets today, mispricing of growth versus value stocks. Value stocks are Great Companies that deliver earnings year after year, very consistently. Though may not be able to deliver those incredible boom numbers like in amazon or netflix, lets say. So i think there is still a lot of value in the market, i think overall were still looking at 5 Earnings Growth for this year, even with the charles still looking at positive Earnings Growth for the year . Were still looking for positive so far even with all of wall streets most recent revisions were evenly looking at a potential contraction in the First Quarter and still positive Earnings Growth for rest of the year. Charles jeff . I absolutely agree with that. We did lower our earnings estimate from 177 to 173 because of whats going on but you know, we figure fair market multiple was 20, 21 times earnings given Interest Rate environment that gives you anywhere 3400 and 3600. Charles very bullish, compared to the rest of wall street right now . Bear in mind we put out a sell signal in midjanuary. Charles sure. So youre calling it almost minute to minute. By the same token you must see major rebound in things that are being postponed now . In other words the Second Quarter is the big question mark i think. I agree. Charles third and Fourth Quarter youre seeing some things postponed in the Second Quarter, people are picking back up later in the year . Absolutely the consumer in good shape. The economy, i was around you know, in restaurants here in new york city the past three or fourdays. People are estimate out spending money. I still cant get a reservation. Charles what . Did you tell them you know jeff . Come on now erin, jeff, thank you both very much. That was fantastic. We covered a lot. You were spot on. I appreciate it. Always a pleasure, charles. Charles dow and s p off 7 , so what are traders saying about this emotional roller coaster. Lets go to kristina partsinevelos. She is on the floor of the New York Stock Exchange. Kristina . Kristina were also session lows. Definitely the mood is now, much calmer than we were in this morning when you had the First Circuit breaker down 7 . Everybody was speaking really loudly, what was happening to their handhelds because they were offline for 15 minutes. That is to help liquidity. The next major number for the s p 500 to have another halt. That would be at 2585. We are far off the number at 2766. So there is still some time to go but overall seems like nobody is really jumping the gun and talking about another circuit halt. Were seeing a lot of volatility. That is exemplified by the vix, seen as fear index. Earlier this morning it hit 62. We havent seen it at that level since 2018, the financial crisis. You do have Movement Towards risk off, into gold for example. Gold hit a sevenyear high. Well bring that on the screen. 1762. 80. Seeing commentary about government bonds. The 10year treasury bounced 80 basis points in two hours is something people have not seen. We have another big story. Look at other news, mergers and acquisitions. Aeon, acquiring willis 30 billion in stock. It will be the largest, so far largest m a activity for this year alone. This new campus will be called aon headquartered in london. Large market cap. Share pr