October 2011 that the s p 500 has rallied at least 1 in three consecutive sessions. U. S. Equity futures at this hour, the dow opening higher. S p would open about five points higher. Among our other top stories this morning, were watching oil prices very closely. Brent has been above 35 a bar reversal. Wti above 31. That, of course, as we know can change depending on whatever these ministers that are participating in opec like to say. The late etc. Development, iran said it would support joint efforts by Top Oil Producers to stabilize prices. The market had been waiting to see where iran would come down on that. It did stop sort of committing to those output curbs. St. Louis fed president making headlines. Hes been a prominent advocate of higher Interest Rates. In a speech yesterday, he said it would be unwise to move any further, citing weak inflation and global volatility. Bullard said he wouldnt be comfortable with further hikes until the downward inflation trend reverses. Hes a Voting Member on the fomc this year. Wells fargo strategist yesterday also saying theyre predicting one hike in 2016, down from a previous estimate of multiple hikes. Joe, do i even go there with you . We talked earlier. Kayla gets here very for a millennial, shes very early. Normally thats not the case. They kind of come in right before. I dont know, do i have that wrong . It speaks for something. It does for you. Its expeern shl to be prompt. Its an experience millennials decide to choose. You have to clear the path in the hallway for andrew to breeze through at the last minute. Im not a millennial. I read it, as i do, with a little bit of a raised eyebrow because it said that this pause in the tightening cycle, the pause in the tightening cycle might be longer than people thought. What did you think of this tightening cycle that weve been in . It was a quarter point from zero. Its been nine years since anyone what would have happened . Nothing. Its a quarter point. Thats not what it is. But the rest of the world is, you know, not exactly on the same page. I understand that. I understand. We do look tighter by comparison. Thats true. I think we should have started this a while ago. I think this is part of the problem. Weve painted ourselves into this corner. We made this bed were sleeping in. But they are truly in a box now because even bullard, who was one of the most outspoken advocates of raising them, now hes folding. The market scared me. They came back 5 . But these markets, you cant say the shanghai or europe all these things scare these guys. Rubio had trouble explaining the dual mandate. Anyone would. Theres about 30 at this point. But the market itself with us out, and it had nothing to do with that, but i think nothing has changed. Terrible earnings in the Fourth Quarter. The worst in years. Oil prices, no real reason to go up. But everybody kind of looked around and said, do we really need to sell this much based on the fundamentals, given that were still going pretty well in this country . We got 5 . Although, when you have about a month before the next fed meeting, a lot can change. We have seen just based on the rhetoric out of opec, oil prices getting firmer. We have seen based on the moves of other countries the dollar getting weaker by comparison. Some of the deflationary pressures that the fed has been citing are actually getting better. Are you waiting for the next fed to see what they do . I dont know. I cant sleep. Thats why im here so early. You didnt go to bed after north carolina, right . Im glad i didnt stay up for that. Oh, you didnt. I did not. Onepoint win over duke. Yeah, it was brutal. I saw the headline, didnt see the game. What time did it end . Late. Nobody is everybody loses. The teams that i think are great, they all lose. Did you stay up . No, i didnt. You were on west coast time. I was on a plane. But i appreciate you wearing your light blue this morning. That is the color for the tarheels. All right. Is this me . The dalio letter. He told us all this, didnt he . Some of it. Why are we saying it again . Because its a letter . Tell it. The founder of bridgewater associates, the Worlds Largest hedge fund, dalio says the Central Banks ability to boost growth is weaker than it has ever been. Exactly what he told us in davos. In a note to clients, ray dalio said Monetary Policy three, or mp3, as hes calling it, will have to be directed at spenders more than investors and savers. Dalio said that meetings helicopter money, he also cautioned currency volatility will likely be greater than normal while countries fight for growth, which also seems like a look in the rearview mirror, as weve seen a lot of countries try to boost their economies by devaluing their currency in a race to the bottom. Lets check on the markets this morning. Not bad after three pretty good sessions. We never saw the blood on the street that people talked about, really. You didnt see that capitulation phase. You were right about that, joe. Maybe not. Might be a bear market rally. Cap bounce. Thats what people are saying. Im not convinced. If oil stays above 30 and weve gotten to the point where everybody says oil i read something about how much is in storage. Were 300 Million Barrels over in terms of how much we have. Thats not even including whats in storage. Iran has never been or iraq has never been producing more. Theyre hitting a record. 4. 5 Million Barrels is it a day . Probably not. Obviously its such a glut that opec doesnt even have to do anything. They can just say things and move the market. You see this internal report from russia this morning on their worstcase scenario . They say oil prices will remain at about 31 to 33 a barrel. Thats in the next year. With a rebound of 42 in 2020. Which is pretty bullish compared to some other forecasts. Huge amount of pressure on them if thats the case. Thats their worstcase scenario. And all these countries. They have a lot of big debt. Okay. We looked at the futures already. In europe, there wasnt a whole lot happening as far as i saw on the way in this morning. Although, europe has been part of the rebound that weve seen. Theres today. Germanys up. The ftse is trading lower. Oil, as weve seen, has been partly responsible for this threeday rally. Well look at that first. Shanghai back to about 2860. Heres the oil boards, which we were just talking about. All the way back to 31. 62 now. Up 3 today. Gold is turning back towards 1200 after it looked like it was finally getting ready to break. I was just going back to my notes from a couple weeks ago. The opec look ahead came out. They dont see 100 a barrel oil until 2040. About 40 bucks this year. How do they when youre looking at basketball games, how do you figure out a point spread . Theyre never right. I would hate to be a bookie to try and bet on these games. How did they know 2040 . How much confidence do you have theres anything to that, other than just making that up . I dont know. Maybe they do some analysis. The only level of confidence i have is theyre a bloc that can potentially control it. True. But its 2016. Is that 24 years . Thats 24 years. Thats how old i am. Thats my entire lifetime. I just think there could be some geopolitical events that maybe make that hard to predict. Well, as joe mentioned, u. S. Stocks are on a threeday winning streak for the first time this year. The s p 500 has climbed out of correction territory, although just by a few points. Dom chu joins us now with todays market checklist. Dom, its like you dont even want to acknowledge it because as soon as you Start Talking about it, then we start reversing. But it does look like we are out of correction territory. The dow is still a few points away. By like a quarter of a percent. Maybe a half a percent. Thats that level, that correction level that you were talking about. So as we kind of put the markets in focus here, threeday rally like you said. One of the strongest ones weve seen since the august turmoil lows and the bounce thereof after that. The s p 500, you can see here, up by about 2. 5 between january and now. In february, this part right here, you can see were just about flat. Maybe just a little negative for the month of february. Thats how volatile its been. Again, to put it in perspective, we are now barely, barely off of that correction mark. Were not in correction territory, but all we got to do is fall by another half a percent, and were back there again. Whatever you think about corrections and that 10 level, thats going to be key. The real interesting part here about the sectors that are driving a lot of the movements here that weve seen over the course of the past month to date period, materials gaining by about 6 . One of the most beaten up sectors out there. Also, industrials and telecommunication stocks. So some of these are at least painting a decent bullish picture, more cyclical on the materials and industrial side. Telecom higher. Maybe people are still seeking that yield and a little more of that defensive nature. And lets put those crude markets into focus. If you look at that sharp decline we saw since the beginning of february, weve bounced back quite a bit. Remember, 28 a barrel. We were there not too long ago on wti crude. The market checklist, joe, this morning has to do with whether or not this threeday rally can actually have legs. We did see higher than average volume yesterday. Thats whats giving bulls a little bit more of a good feeling about the rally that weve seen. Well see if it can hold for day four today. Back over to you guys. We still have these companies that are on different fiscal years reporting, but were out of earnings season, dom. It wasnt pretty, but its like the guy that, you know, you stop hitting your head against the wall, and it feels good. At least the bad numbers we had, it was the smallest amount of beats on estimates. It was also one of the worst quarters weve had. But thats over. Well see what happens. Walmart kind of unofficially caps the large cap earnings season. Again, weve already been in a sales recession, a revenue recession. This would put us now two consecutive quarters in terms of year over year earnings declines as well. Maybe were in an earnings recession. The question becomes whether or not because were over it we can see a little bit move higher because people are not as concerned about those corporate earnings and sales anymore. We get to retailers that are weird, their quarters end in january. Basically, everybody else is done. Anyway, dom. Thanks. For more on markets, were joined by jason pride, director of Investment Strategy at glenimmediatgle glenmead. Also, michael tyler. History doesnt repeat itself, i guess, guys, but it rhymes a lot. This doesnt look that different than a lot of corrections that weve seen in the past. Did this get oversold and its a bounce without anything to justify it . We think it did get oversold on a nearterm basis. You look at the ai, Investor Sentiment poll, the number of stocks or percentage of stocks below their 200day moving average. We hit levels that historically the markets recover from. When you think about corrections, weve done this study and looked at past corrections. Pretty much the determining factor is whether the fears get realized. Therefore, the correction ends up being not actually as much as you end up having. You ends up going down further. Or if those fears dont materialize and you come out of it, typically in that situation you rebound back to where you started within eight months on average. Thats based on historical nanl sis back to 1928. Theres a little bit different story as to whats happening today. I think it makes it a little bit more balanced of a picture. The fed i heard what you were saying, but we believe the fed with quantitative easing has been tightening for quite some time. Now we have this pick up of possible credit risk on the energy side of the equation seeping over into the rest of the market and kind of invading the Financial System a little bit. Also, the difficulties structurally with china and emerging markets gradually slowing down. You put those things together, and i think this is a more balanced picture than other corrections that weve had. One where you have to look at it and say, okay, wait a second, the actual chances of a more material downside have gone up. Its not a base case. Youre probably still expecting expansion. But the risks to the overall economy and the system are a little higher this time around on the correction than they were, say, back in july, august last year. I think thats what the markets are having to deal with. So markets sell off in anticipation of what could be something negative, but theyre not always correct. So sometimes they sell off because of the worstcase scenario and it doesnt actually happen. Markets are supposed to be smart. But theyre no smarter than the people behind them. Theyre no smarter than the information they have coming in. I looked at the same reasons why the market sold off. Nothing has really changed or improved since then, other than we got oversold. The same worries that took us down are still front and center, but its like everybody took a step back and said, wow, we really got panicked and maybe we shouldnt have. I think the key is the word panic there. People were getting very upset, concerned whether banks, for example, had really big exposure to highrisk loans in the Energy Sector. The answer is they basically dont. Its a very small piece of their portfolios. The banks have been clobbered. Theyre down 20 and 30 in many cases from their highs. Thats just not justified by their fundamentals. Theyve done much better in diversifying their businesses as well. So as were looking at it, i think oil is it going to go down by 50 for a third year in a row . Not very likely. Is the dollar going to soar again this year . Not very likely. For one thing, the fed is clearly backing off a little bit. To me, those were huge headwinds that caused the profit recession you were talking about a few minutes ago. I think that eases by Second Quarter of this year. Third quarter you start looking at positive earnings again. I think the market is going to reflect that. Were stuck in a trading range for the moment, perhaps, but longer term, looking to the back end of the year, we should be okay. So all this. Whos the latest guy to call it a circus . Oh, your buddy. Which one . Howard schultz. Oh, yeah. Political process turning into a circus in this country. He didnt just say republicans either. I figure hes a bernie guy, but he said even on that side of things. Im surprised you havent said knack for the obvious at this point. Right. I wonder how much of that played into what were seeing in the markets. Maybe not a lot. I dont think its a lot. But i have to admit, when we speak with our clients, its surprising how many times its coming up. More from a perspective of what happens if a nonestablishment candidate gets in place versus the establishment candidates. What does that do to just the overall system and whether that undermines the ability of the u. S. Economy to continue doing what its been doing. I dont know if i really buy that the president ial candidates have quite that much power in terms of the economy. I personally believe the Federal Reserve is really the economic dictator. Oh, god. And the president doesnt have quite as much power in influencing it. The rest of the world has a lot of nerve judging us and our political process. Theyre not exactly you know. But it is a little disconcerting. Maybe we should put in the confidence votes. Jason, is that a beaver i see . I think youve asked me that before. It is. Yes, it is. Im fascinated. You were undergrad . Right. I did not get one for graduate school, but you might actually be inclined to understand some of this stuff. Doesnt seem like i went to the dark side way too early, i guess. What happened . I dont know. Good old dr. Bose talked me into going into business. Chemical engineering from m. I. T. Youre going to come back. Sorry, michael. I dont know where you went. I didnt see you. Im still here. Wi know. I mean, i dont know where you went to school. Never mind. Thats a big tie knot youre wearing. See you later. Coming up when we return, were expecting Quarterly Results from walmart at 7 00 a. M. First, were going to talk to an analyst about what to expect when the dow component reports. Plus at some point, we have to talk about apple and all the security concerns and privacy sshs. Were back in a moment. Actions speak louder. Something well show you. Through small things. Big things. And spur of the moment things. Sheraton. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. No, youre not yogonna watch it tch it we cant let you download on the goooooo youll just have to miss it yeah, youll just have to miss it we cant let you download. Uh, no thanks. I have x1 from xfinity so. Dont fall for directv. Xfinity lets you download your shows from anywhere. I used to like that song. In less than an hour, walmart is expected to roll out Quarterly Results. The street will finally see how the retail giant finished its holiday season. Here with expectations for the dow component, managing director at raymond james. Bud, the company at this point has laid so much out for us about whats coming ahead in 2016, but im wondering what you think we will see so far as seeds being sewn this past quarter. Well, well see how traffic went. Traffic has been up for several quarters in a row, comps have been positive. Well see what the impact of the deflation on food has been, which weve heard a little more about lately. And well see how results will look in the quarter. Were estimating were a little ahead of consensus. I think were at 1. 50 with a u. S. Comp of 1. 2 . I think consensus is about 1. 43 on 131 billion. Sales were a little ahead of that at the sales line. The u. S. Comp stores trend has been pretty good, bud. Several years ago, investors never really expected Comp Store Sales in the u. S. To be positive. Do you think that its a given . Well, i dont know that its a given. Well see as we get closer to the actual time of the report. I get more nempbs. We have them expanding comps a little bit over the year, over the next year or two because thats where a lot of the effort has been laid. The company has been working to very much improve the experience in u. S. Stores since doug as taken over and greg came in as ceo. Thats one of the reasons why they put more investment in the stores. This year well see about a billion an