Today. Sparking worries in the broader markets. Some questions whether this is an Early Warning sign of a broader sell off. The nasdaq is coming off its biggest one day losses in nearly a year. The index is on pace for the worst week since october. In the meantime the dow and s p are down 2 in the last three days. As we talk about a sell off lets talk about the hideous elixir. A witchs brew. Or a famous miles davis album. What was that 300 point advance we saw last week after yelen took out patience . How much fundamentals were underneath that move higher . How real was that move higher and what inspired it . What about the recent economic numbers. People are still talking about 3 year in gdp but they seem committed to increased rates so were in an environment where the fed is for all intents and purposes tightening and then i have been making the point you put apple in the dow and youre asking for it. Youre trying to top the market out. Lets look at a six month chart of apple now. Number one, you get it up near 800 billion. People Start Talking about a trillion dollars and we Start Talking about the law of large numbers. Just this week analysts put 180 price target on it and then you put it in the dow. Well the stock was down about 3 points yesterday. Its at about 715 718 down from 780 billion. So you do another three or four points on apple were below 700 billion and who knows what happens from there on out. What else happened yesterday . Well look at an s p chart. Thats still above but if you take out the losses today it would be down for the year and was there one other sector that was the poster child well i wouldnt say apple is growth but bio tech has been really really hot do you remember our interview on monday or tuesday where i said it was monday. Monday. You look at your revenue, its hard to understand valuations in bio tech but we explained it. That given where we are in terms of science and molecular biology were right on the cusp and they need all of this basic science that the bio techs are doing so theres a reason to reward these companies with a multiple to revenues and not even a multiple to earnings because theres so many drugs in the pipeline. We justified whats a market multiple bio tech. Whats the market multiple for bio tech right now . 30 or 40 . I dont know. There are plenty of big name bio tech stocks not selling at a multiple like apple. The Big Pharmaceutical Companies arent developing like they used to be. Overall . That sounds too high to me. It does but lets say its a third of that. Lets say its off by 100 or 200 , still all of these things we took for granlted is this nowted is this now, with with the fed tightening where they move away from 0 interest rates. Is this where we get the 10 and the other thing, he has a bounce in his step the maybe this will be right three times but the other thing that scares me is if it does become clear that the economy is slowing and the fed does worry about a tantrum and if they decide not to raise then i start thinking theyre stuck again. Theyre stuck and theyre never going to be able to raise. I think they read the papers and they shouldnt. If we are talking about a downturn in the economy well be getting higher wages. 5. 5 . Capital expenditure. Go to one. Dont stay at 0. They dont have the nerve though. They will lose the resolve and stay at 0. They are making the argument that they arent tightening. They are tightening. Theyre going back toward normal maybe. Taking baby steps back toward normal. But the theyre piling on saying how do you raise rates right now . Its a free lunch. Keep it going. Keep the party going but you need the underpinnings. But 5. 5 we should be at 1 all right. But we dont know if the economy is there. Look at the durable goods numbers yesterday. Look at inflation. Were still closer to 0 than 2 . Thats the problem with the dual mandate. Yesterday we started down how much . Minor . Youre feeling so negative. Im not feeling negative. Its just catharditic. Sometimes you need to flush it andrew. In this case flush it down. We havent had it in how long . 10 . Ever since the geniuses at s p decided to add apple to the dow so we could enjoy the ride down to more reasonable levels. The last time we claimed it was 10 it was not. 9. 9 . Lets check on the broader markets this morning. We showed you the red arrows here in the United States. The early trading in europe this morning youll see at least at this point it looks like yeah some red arrows there as well. Europe is not only reacting to our futures this morning but also what happened yesterday. The cac down by 1. 5 . Dax down by 1. 6 . Ftse down by 1. 2 . In asia we saw a strong reaction with the nikkei down by 1. 4 . Shanghai was down by 1. 6 . Watching the bond markets in the United States youll see the ten year note is yielding 1. 9 so the yield slipping back a little bit. Dollar this morning is down across the board. This has been the other part of the story. As the dollar has weakened that has been part of whats propping up oil prices. All of these movements. People trying to figure out if this is a correction from the Massive Gains in the dollar or a change in direction. You can see the euro is at 11026. Dollaryen at 11524 and gold looks like theyre up by about 13. 1,210. Back up 1,200 an ounce. Among them saudi arabia and its allies launching a military operation in neighboring yemen. Targeting the rebel who is have driven yemens president from its capital. The action sparking worries about the security of middle east Oil Shipments. Also crude rising sharply in early trading. Take a look at whats going on. Youre seeing wti crude down at 51. Michelle what did i call you. Chief investment correspondent. Understandable flip. Chief International Correspondent correspondent. Its not just that. Its over the dollar. If you didnt role the futures it would be at 45. This is one of the pieces of news that its driving oil higher overnight. Gives me options. Thats good. Lets role the video. Saudi arabia began air strikes in yemen last night. Attacking rebels. The saudi kingdom vowed to do whatever it takes to restore the saudi backed government rooted by iran. The president abandoned the country leading on a poet leaving the southern part of aden. It was announced by the ambassador to the United States last night at the embassy in washington d. C. They he have then taken over the armed forces of the yemeni state. They are in control of heavy weapons as well as military bases and ports. The yemeni president , the legitimate president of yemen was able to escape. Oil is sharply higher. The rebels are backed by iran. This is shia versus sunni and if and when they can reener the World Economy theyll have a lot more money from being able to sell oil once again and theyll be able to exert a lot more influence in the region than they already do. Theyre involved in iraq syria, lebanon and now yemen and this is a move on a Bigger Picture to say were not going to stand for this. The other thing is this is happening while were supporting the saudi and their partners on this side of thing were also negotiating with iran on the tuesday deadline for what happens with the nuclear ambitions. Were on the same side of iran when it comes to syria. Its bizarre. How do you put all of this together . I cant imagine. You highlight that the middle east beginning with the arab spring is falling apart at the scenes or at least the control exerted through colonialism and the past is coming apart and boarders are collapsing. Exactly and we have to live with the consequences and watch the unintended consequences of all of these things. Whats the break down in yemen . Its a 7030 split . I reversed that. But bottom line think of it like influence, yemen is on their border and they wont tolerate an iranian backed border there period. Kind of like how we talk about ukraine. Its amazing to watch that on the border right now. This is all part of it and part of this seeping into the financial markets. I was wondering how much of the sell off might have been driven by this. Just the general nervousness about everything happening. Dow dropped almost 200 points yesterday. Sell off continuing this morning in a big way. A lot of different pack tos weighing in. Rebalancing to the dollar slide against the euro. Lets take a quick look right now. This hour. We were talking about the fed resolve. He is saying bog things. He is hawkish and this hawkish view is some what tempered by the low inflation they have seen. That gives the fed some breathing room. It could be due to weather and expect a Second Quarter bounce back. He could see the jobless rate below the 4 range in early 2016 as a reasonable prediction. So even though things seem a little bit what theyre not eluding to they shouldnt. They built this house with no foundation. If it starts collapsing theyre going to feel responsible for it. The chief market strategist. What are you seeing here . A agree with you. The fed, if they built the house out of you know on a Wood Foundation they shouldnt worry if it doesnt hold up like they thought, right . They have a rate dont they . I agree. Its just an unusual six years until a recovery but the problem is gdp growth is more than 2. 5 . Its this lackluster mediocre type growth rate not taking a look back and seeing the policy is not working and not having the guts to raise rates. Rates went from 5. 25 to zero and they cant raise 25 basis points. Not only do they listen and watch the markets and i think theyre effected by it but we know that because we saw the taper tantrum. They did seem to back off now. Do he they also listen to the Progressive Left which couldnt be more stayed in their notion. Because shes dovish. She is going to hear it. You have to stay at zero. You should go negative maybe. Its the look of the economy. Try to stimulate by encouraging people to borrow. We reached a point where theres so much borrowing that the cost of money doesnt matter. Its not the impetment to further growth and its caused a lot of rot in the economy. We have companies in the u. S. Able to stay alive because they can sell debt in the market and were repeating Monetary Policy of japan. Why do we want to emulate it. We did shock and awe. They didnt do it. But all Monetary Policy does is pull forward activity. It doesnt create growth that wouldnt have happened on its own anyway. We pull forward activity and still cant get out of this. We could if the fed had any guts but they dont. The other thing theyre going to say is look at the comparable rates around the world and were way higher already than all the rest. What i say to that is there will never be a good time to raise rates off zero. But there can be worse times. Well imagine data has been poor. Imagine the economy slows further. And they have no tools to respond. Thats saying we missed it. We missed our window already. Theres no question about that. The fed is crewed essentially. We knew all along people were predicting they would get less and less bang for their buck with everything they do and sooner or later something is going to come along where we are have no ammo left. Thats where we are now. You think . There could be a slow down and we have nothing to do . Finally all the things we have done stop working and people will say as long as theres no negative consequences we might as well keep doing it but maybe down the road there are negative consequences. Also qe ended late october and the New York Stock Exchange composite is back to where it was last july. The s p with todays opening will be back to middle of november. Its one of those things that qe for example enlarges the bubble and the bubble starts to deflate again. You said there was a way to fix it. What is the way to fix it . Its the economic environment. It reduces the chance. What is that . 5 or 6 . Youre not getting back to normal . No, its going to take awhile but the fed needs to start the process. Even is growth is 2. 5 . Europe is still abnormal. If the fed funds rate is at 1. 5 which is the rate of inflation. Bullard seems to be saying were going to do it because we have to. Do you think when its all said and done they have the nerve to do it in june . If the Unemployment Rate is 52 theyll have no choice. If it means a recession it means a recession. But i know looking at over the next five to ten years we have to get out of this. All right. I think thats all. I think thats a good summary of what were looking at. Its funny the way all the other things coincide with it too. Bio tech stocks last week. Classic reversal. Thank you, sir. Thank you. Well talk about another story. Its not a business story but i know you have been thinking about it. Its close. Because theres intrigue and we have no idea. And im getting on an airplane. Are you ready . I start thinking about all of this it becomes very personal. I dont know why that happens. Were going to talk about the story of the morning. A shocking report on what might have happened now outside the cockpit of that germanwings plane that went down over the french alps this week. Phil joins us with the latest. Tell us where things stand because theres a number of reports now that are pretty wild and scary. This is the shocking report that came out first from the New York Times last night. Its now been essentially confirmed by other reports out of europe that one of the pilots was locked out of the cockpit was the plane was descended down to 6,000 feet. The pilot was locked out according to an investigator remaining unnamed but who was quoted by the New York Times as listening to the voice recorder. He says you can hear the pilot knocking on the door. Gently at first but then eventually essentially trying to smash down the door and never gets inside. Its unclear who was the copilot and who was locked out. The guy outside is knocking lightly on the door and there is no answer the investigator said and then he hits the door stronger and no answer. There is never an answer. The source goes on to tell the New York Times we dont know the reason where one of the guys went out said the official but what is sure is that at the very end of the flight the other pilot is alone and does not open the door. Now all of this raises the question, a, whats the protocol when it comes to one pilot leaving a cockpit and then wanting to reenter. Heres how it works with airbus a320s. All of the doors they have security doors so as one pilot leaves theres supposed to be a crew member that goes in and stands inside with the other pilot. There are key pads on the outside of the cockpit doors that can be accessed with a code to unlock that door. However we should point this out. Theres an override switch in the cockpit which if the pilot and the crew member inside the cockpit, if they hit that switch, it will not allow that door to be opened. What is unclear here is a was there somebody else inside the cockpit with the one pilot in there. Was protocol violated or did the one pilot leave . Essentially leave one pilot alone inside the cockpit which is against protocol and finally what happened inside the cockpit . Theres no details about that kwet but we should point out guys a couple of press conferences coming up. One at 7 30 a. M. Eastern this morning. A french prosecutor will be holding a press conference in france to discuss the investigation. I imagine we will get more details about whats on this cockpit voice recording. So theres a couple of issues here. The most interesting and tragic is that one of the pilots were purposefully locking out the other pilot. The other issue that some people have surmised that perhaps because the plane dropped fast i dont know how fast 38,000 feet to 6,000 feet in 10 minutes that somehow there was depressurization and perhaps the other pilot passed out or fainted. My argument to that was if it was a pressurization event it wouldnt have been just inside the cockpit. It would have been for the entire plane. Right when a guy leaves too. This sounds like im knocking on the door and knocking on the door. This does not sound like theres a pressurization event. Could the other pilot have had a heart attack. Thats possible but then again it gets back to protocol. Protocol is and we believe germanwings is supposed to follow the same protocol. Thats when one pilot leaves the cockpit a flight crew member impose inside the cockpit. Did that not happen . Its unclear at this point. You know whats next thats a look at these two pilots. Correct. Look into their background. Names, background anything out yet . Nothing, zero . Theres one report out of europe that one of the pilots had 160 hours experience. The other pilot has at least ten Years Experience but other than that we have no background and theyre also going to look into the possibility, guys theres also the possibility of pilot suicide although this does not fit the usual pattern of pilot suicide. Usually its a nose dive. Phil nothing out about names or nothing hike that. Correct. And thats why these press conferences are so critical because i think people are going to start saying we want more information. Theres the other situation where they were interviewing family members and Work Associates and Everything Else about the mental you know state of the yeah. Right. Obviously this is i wonder when we cross reporting and go into conjecture. Everybody is conjecturing i guess. Thats already happening, joe. But whats clear is i think this investigation is pivoting and moving much more toward a criminal investigation as opposed to a typical Civil Aviation investigation. Phil, one of our eagle eye viewers has a question for you which is a smart one. We always talk about the voice recorder. In this great age of technology why is there no video recorder up there. Great point. A lot of people have asked for this in the past and it all comes down to two things. One, who is going to pay for the bandwidth so that youre feeding out of the plane approximate youre going to do that or two why not just have it in there sort of a go pro approach so if theres an accident you can go back and look at it. Its the pilots i imagine. Its more the pilots than the airlines have been more resistant resistant. Thank you for joining us. Well be sticking here to keep up with you and that story all day. I dont even know. Theres a lot of ways to kill yourself where you dont kill 150 peo