that to you. >> hello, safety >> it's slow and coming. >> you said though that lack of catalyst and you have to wonder what that's going to be with the government shutdown. real concerns about the relationship between the president and fed , what he may want to do >> we'll be locking for more tweets from the president. perhaps more clarification about the call with treasury back to post nine and the clo closing bell >> thank you very much very merry christmas and welcome to the special edition of the closing bell on this shortened but volatile trading day >> it is great to be here with you. no christmas cheer here. stocks selling off in the final hour of trade as the guys were just telling you the dow down 400 points as we speak. >> want to start with breaking news just spoke with a senior treasury department official here's what i can tell you, a

lot of clarification on this bank ceo call which is causing anxiety and a lot of questions treasury had no concerns going into this call about liquidity whatsoever it was intended to be a check in with with major bank ceos of which the treasury secretary speaks to regularly about everything going on in the economy. the shutdown trade issues powell markets. in fact, no reason to believe that it was about anything relating to lending and liquidity as far as any concerns out there and that the treasury secretary heard exactly what he expected to hear in fact, the senior official tells me the headline on the call should have been about the economy and the message from the bank ceos is that economy in the u.s. is looking quite strong concerns about global issues like europe, like china, but that the treasury does see a disconnect between the markets and economy. the bank ceos confirmed this

view and that's really what the call had to do with. as to the question of why release a statement about liquidity and lending when nobody was asking questions or worried, a an official tells me it's in the interest of full transparency things are okay. just wanted to check in about some of these market fears >> so everything is super positive and the tone of the call is pu per positive. does the official admit it was a mistake to release this statement because the reaction on a pr front hasn't been great. everything's good. the same as if the defense secretary said guys, i've spoken to all my submarine captains and they say everything's great. that causes fear >> i think it was full transparency maybe the point was made to me that if this wasn't released, you'd have people wondering where's the treasury secretary on these issues out there. t a lot coming into the markets at once and with the nasdaq and bear market and stocks coming

off their worst week, it was just a routine check in and mainly about the economy i think there's some admission in the treasury it should been about the economy and not led with those concerns. also some other headlines and the tweet quoting the president. i asked why did the president just tweet himself if he has no intention of firing powell treasury secretary says this wa a direct quote from trurmp, they were on the phone together that night relaying back and forth the direct quote and the tweet and that as far as the treasury is concerned, the president has no intention of firing jay powell in fact, williams did a good job b clarifying on cnbc when he came out the flexibility of the federal reserve. >> i think this is all important because there was some fears out there of does the administration

really have a handle on this what we're pointing to is there was a pr issue on how they worded the statement on how this was a crazy thing. the bank ceo call in general and whether there was other wild card questions when talking to the bank ceos about firing powell >> spun the wrong way. it was just an effort according to treasury to be trans parent about checking in on some of the big issues that we're all talking about every single day in the markets >> on the topic of liquidity, i want to bring up data. there's two big differences here the one question is are banks liquid is there threat of oo 2008 lehman issue then the question of is the market has liquid as it was on the banks, we have some stats comparing 2010 to 2018 show iing how much more liquid e banks are. this is data from goldman sachs. 39% more liquidity regional banks more than that.

banks are far more liquid. what about the market? is that more liquid? also goldman sachs providing this today we've seen that from this is the defined as what tradeable size we've seen that in big moves in equity markets. did you need to hold a call on that probably not but it's lower where as banks themselves very liquid >> i think my reporting backs that up. i think treasury understands this and knows this and weren't worried y eied about it going i call then heard what they needed to hear, which is there shouldn't be reasons to be b concerned. in fact, the bulk of the call smr about these other ib ibs and tha the big clarification that i i wanted to bring you. let's bring in steve liesman for more steve, it's sort of clears

up this issue of why they were having a major call to talk about the bank liquidity when it wasn't a problem because there are obviously when it comes to the market and economy and whether there's a disconnect >> i'm having trouble seeing what's cleared up. i have to say, i'm looking at the statement the treasury put out. the one they say should have been headlining the the economy. it's not their headline on their statement. it says secretary mnuchin convened individual calls with ceos and banks the idea about the economy being strong is in the last paragraph. so and a i will say what i think is the good news here. the good news here is that their clarification with you suggesting they understand they messed up here and there's a need to redirect this to markets because i think the statement itself is bad enough if they didn't understand the it

was a problem, that would make it worse so the idea that somehow they're trying to clarify this the only way they ever get this back is through their actions. they cannot clear up the idea that they put out this statement suggesting ample ly quiquidity i would point out that the treasury secretary does not need to call these banks to find out if they have ample liquidity i can run through the ways in which they can find this out there are multiple ways this happens. >> just quickly, we're getting into the much of how they can measure this but the fact that the call took place and these calls took place, once that had happened, was it better they put out a statement? because i guess worst of all would have been leaking messages there was no statement at all.

it's really the tone and content of the statement the idea that he's assuring they have ample liquidity when there was mo question at all about the liquidity in the markets let's go back and look at context. in 1987, greenspan said the federal reserve stands ready to provide liquidity to the market. what happened then a 23% one-day decline in the dow. okay now you've had i think it's an 18% decline in the dow over three months and it's been remarkable how liquid the markets have been. there's no sense of the markets being ill liquid that you get a gap in pricing and a market shutting down >> here's how i would respond, steve. so i think with the clarification was meant to be there weren't any concerns from the treasury about liquidity the reason they put out the

statement was a, full transparency and b, because want to know. it becomes a question. it may have had an unintended consequence. maybe that wasn't communicateded then again, just trying to be open b about some of the topics. >> i guess so. i'm used to there being statements to the ly quiquidity you have to two main financial arms of government acting today together in the event of a crisis >> steve, there is no doubt that liquidity of stocks has fallen

froms how do you measure there >> we have a chart now i just showed it it's measured by tradeable sizes, percentage of market cap. down 42% in the last year and the it's at its post crisis lows if we can bring up the chart from goldman sachs it's single stock liquidity as measured but that's, i agree, steve, does not leave the secretary to make a statement about it go backwards if you have the statement from the treasury, the president asking questions about whether he can fire the chairman of the federal reserve even though now it's said he doesn't feel he has the authority to do that there are reports that says he was asking questions about his ability to do that you've got a government shutdown and that coming after the federal reserve reduced brea edt

rates. in the last hour, you saw the tweet by the president of the united states about how the fed is the problem if they think any of this is adding to stable any in the markets, i'm not sure what markets they're following. >> not guilty stable the lows of the day. thank you. >> the president did not mention firing jay powell, which i think is important psychologically for investors and i can back up to you from the treasury, has no intention to do so let's bring in another voice here from the center on budget and policy priorities and jimmy from the american intersurprise institute. what's whereon, jimny wrk the treasure tri putting out a comment on a call about the bank ceos and just reminding people that liquidity is ample. >> if there was an issue, they would expect the fed and treasury to to be working together that's not what we were saying

they are not working together. in the process, let's not forget, he says what he wants really are lower interest rates and a stronger dollar as part of the trade war with china that's gibberish so if the white house or the treasury thinks those tweets are helping, having the president tweet economic gibberish at the same time markets are r worrying if there's a steady hand at the wheel, that seems troublesome to me >> is there a bigger fear out there from the market today and in washington that the administration is ceasing to be controlled add planned and forward looking and it's short and reactionary only >> i think there's and i think you've gotten to the nub of what

i've been carryinging around with me. if you look at the number of quic kicks they've engaged in we've got mattis leaving i think policy has been irresponsible. it's just cascading. the underlying trend is really strong in corporate profitability is boosting the markets. the minute those pillars sta rt to fall away, you start to worry about the competency of this team and i just think that this is not the group that you want at the helm if we're heading through rough times. i agree what everybody's saying. it's a bad harbinger of what's to come. >> not trying to you can wa it back just trying to report. >> they're trying to walk it back >> i think they're just trying to clarify and see this as a misinterpretation.

>> i disagree. it's a mistake look at the headline look at the headline of their -- it was about liquidity that's fine. they should try to walk it back. they shouldn't have made that mistake in the first place mistakes happen. my point is they're. >> chase: cascading. >> do you think they vnt have had this phone call at all do you think the person in the press team that secretary mnuchin locked through k was that a mistake >> that was the mistake. you don't call the six ceos unless you have something real to be concerned about because it's going to leak out and it's going to lead people to wonder what's wrong >> i would call the ceos of the banks and ask them about the committee and what the market is signalling to us with the economic data coming out >> none of these banks are predicting recession they're predicting a slowdown. nobody's been predicting a recession.

"the new york times" describing the reaction was startled. that the secretary was calling so to pretend this is a little due diligence here over the weekend. that absolutely is not the case. it's not how the market. this administration that cares about market, they need to take a deep lesson from the market reaction here. >> thank you both very much. can't confirm that last point that the ceos were startled. this wasn't a scheduled call that had been planned. they got the call over the weekend and didn't know it was coming hence their surprise as well now stocks of course briefly got a lift in the middle of the day. that was partly because david tep tepper phoned in and since then, we've sold off on fresh lows again. talk us through what he said midday or mid trading session. >> he watched the market decline close to the open this morning when you had the whoosh down and

thought the market had come down too much and he was nibbling on some stocks i don't have specific names for you. he's not going to share that sort of information, but enough to say that seemed a little bit overdone to me i'm going to, i've been nibbling this morning on some names. >> you talk to these guys, to mr. tepper a lot gauge for us sentiment because we have to add some 12 to 13% so nibbling, you could take as bearish. >> i think cautious. and i think as he said to me in pittsburgh few months ago, when we sat down with him that he had started to take his equity book down a little bit. that cash wasn't a bad thing obviously he's still cautious, but when he sees a decline like we saw today where the dow is down 450 and the s&p got down to 23.67 and it's right about that

level now, there abouts, he said you know what, maybe that's too much and that's a lot and i'm going to do some nibbling here maybe you take that for what it's worth for a sign that you know, maybe i don't think i'm speaking, maybe i don't think the market's going to go down a lot more than it has, so i'm willing to take a risk in some of the areas that i like he still underscored the fact that it's a tough market it's not like i'm buy iing hand over fist. not urging people to go full throttle into the market whatsoever you could never say that holding cash is a bad thing in the kind of tough, use that word a lot, tough environment we're in a tough market >> but the point you're trying to make is that it wasn't a fundamental view on whether the markets were overreacting, on the economy, on powell or anything it seemed like we've been look ing for this moment and have felt something >> i don't think he's overly negative on the economy. or anything like that. i just think it's a guy who makes big bets on the markets

seeing the direction and saying this seems overdone to me. i don't know how much more it could really go. seems a little off sides and item going to try and take advantage of that. now let me asy say to your conversation, i asked about the reaction to the mnuchin calls and he said i won't comment on the obvious. >> a statement of sfort. i think you can make that leap and haven't frankly spoken with anybody in my what you would say universe who thinks that it was a great idea to go public with that sort of calls that they had. >> we're hearing that a lot. >> i think it was a cautious bit of nibble. i think it spoupported the mark earlier. >> thanks for joining us >> merry christmas >> more news here on treasury. we have an alert >> well steven mnuchin had

another call this morning. this time with the president's working group on financial markets. that includes the fed, the sec, the cftc, a senior administration official tells me that that call was just a check in call in which the agencies discussed coordinating during a government shutdown. so clearly the administration here trying to calm the market's jitters over some of these discussion that the secretary has been having with both bank ceos and key players throughout the government and administration again, that official telling me this was a call intended to coordinate shutdown activities back to you. >> thank you very much now joining our change today to discuss more on what this means, we have got scott from wells fargo investment, jonathan from meridian, rick santelli in chicago. good afternoon to you all jonathan, start with you i mean, again, a big sell off after a terrible week last week. does it surprise you when we

continue the see these huge moves to the downside? >> i think we're watching every headline and every tweet that comes out of washington and having a short trading session today with little participation and low volume, the headlines we got this weekend we're going to have a huge impact on the market coming in today. i think people were foolish thinking it was going to be a quiet weekend and the news cycle was going to be quiet, but the headlines we got out of washington have put a significant amount of pressure on the markets >> i think the fundamental question, scott, no matter what the headlines are is there a disconnect between the u.s. economy and the markets? >> well, we think there is this is pretty much a shoot fist and ask questions later kind of market and for us as we look ahead, we have decent gdp growth here and really abroad and really only modest inflation, so i think you know, i thought you guys did a good job talking about what in our opinion was kind of a pr

blunder. certainly, as you pointed out, the traeasury secretary probabl has frequent conversations, or you would hope so, with all of these major financial institutions and just to headline that steve liesman pointed out, rather than the strong economy at the top, it was kind of the negative at the top. or what the market ininterpre r ininterpreterininterpreteterpre as negative. it's going to be like in for a while. >> did that clarify things the treasury said it should have been about the economy >> well, you could see when john williams talked to steve last week, you know, he said the right things but obviously, i mean that worked for 20 minutes. now you have the treasury people talking to you and clarifying but it doesn't really help so i mean there's been a couple of pr blunders here and you know the market is very sensitive to fed mistakes,

slowing global growth, those types of things and really when i look back after the economic, economic club of new york speech, i mean the fed chair had the market in their hands. we had positives from g and trump at the g-20. the administration had the administration in their hands and we've had these blunders after that since december 3rd, market just fell off the cliff prz there's some disconnect between the fundamental gdp. what about forecasts for next year's gdp in total. has that come down along with the market or has that been the most of 20 2018 >> like all analysts, they definitely get affected by what's going on around them.

i think this trend is going to low lower expectationexpectations march meaning as to what they'll do next. and everything's that's going on i understand all the interpretation let's be clear here. paulson is the treasury secretary during the crisis. first they were going to bottle three quarter of a trillion dollars to buy toxic assets. that never materialized. morphed on the fly things could get messy i can't believe some of the nuneses though they haven't understand that anybody would be worried about liquidity. i'll tell you what go visit any major fc in this business and ask them how much hours a day they're putting in when markets are move like this or talk about margin and leverage or how many times treasury sec the tear mnuchin was concerned about market

structure. tall articles in december. every nuance is the wrong one because the message isn't really any of these individual thoughts the issue is quite simple. the central banks of the world propped up the stock market to a point where it can't sustain itself during normalization. and only a few of the participants in the grand scheme of things. that's the main issue the markets have to contend with there's no fri str i that does that this president doesn't get the benefits of much of that next key level to be watching. >> just broke below 22,000 again. >> we're going to stay this. if 23.50 is the next level when you have the moves we've seen over the last three weeks, the levels go out the window >> we'll keep an eye on that thank you. >> today marks the official start of the santa claus rally,

but will the seasonal upswing an this year after a brutal month for the markets? doesn't look like it bob pisani has been digging into the trend. seas seasonality not in our favor this year. >> it begins today and it's a very specific event. the tendency for the market to rise in the last five trading days and first two good for just seven trading days the usual explanation is that the firs half is dominated by tax law selling and once it's completed, they usually step in and buy other stocks since volumes are light, a modest increase will produce a rally. but it's usually framed the negative if santa claus should fail to call, there may come to broad and wall

following a failed santa claus rally. what's the right price let's assume flat earnings that's what we earned this year. what's the multiple? if you have a modest slowdown in the economy, the right multiple for the s&p wouldn't be 15, 16, 17, maybe between 14 and 15. so pick a number 14.5 that would produce a price of about 23.50. that's about where we are right now. that's prits ng a lot of bad news no growth b and a low multiple that's assuming a lot of bad stuff is going to happen next year so we're right there 23.74. just a good guess. back to you. >> thank you very much

we'll be back with you no doubt in the next half on hour as we approach this final half an hour of trading down 420 points >> a lot o the defensive so-called safe haven sectors like utilities and staples are getting pounded the hardest. p and g, a big loser in the dow utility sector, underperforming. the market today sima >> merry christmas eve dissecting today's market performance, it's those sectors like utilities moving to the downside the sector lower is utilities. now low e for the year down about 2.5%. some include con ad and energy, about 2 to 4%. we're actually sitting at session lows right now you can see the s&p utility index down 4%. so we'll have to watch the sector closely back to you. >> okay. thanks very much let's check back in on the

prodder markets at the moment. down 434 on the dow. is low of the session was over 500 points, but as sima mepgsme, we'mentioned, we're there speaking to the fact that defensives are underperforming month to date, we are down 14% for all three of these which makes it the worst december since the great depression, which is a big and scary headline, but it's been a sharp drop at one point, i mean i'll see where we are right now almost bear market for the s&p and dow as well. >> in general terms, it's been this final three or four month of the year that's seen the u.s. play catch up to the downside

with other global indices that have more table but have been have been lagging. that's similar to france, to japan. to the u.k big one to look out for is germany is down b about 17 or 18%. shanghai is doover 20%, but the last three months has been the u.s. >> i think you're right to point to the b global concerns when we asked people why here, that's number one. china slowing down europe is slowing down and has political crisis everywhere you look you get u.s. shutdown, not really inspiring investor confidence concern that is the fed is going too far too fast prz you name it. the lips has grown the other point is not only the pace international ly

it's coming from a lower level on top of that, even if we're arguing about -- even there's flexibility to cut again so again, their international business showing what they can do to improve it again >> let's get a news update with bill griffith. >> hello, here's what's happening. a lot of volcano news. indonesia's president is visiting the worst affected areas struck by the powerful tsunami over the weekend it was triggered by a massive underwater land side caused by an erupting vocal know 373 people have been killed. nearly 1500 injured. 128 are still missing. meanwhile, mt. aetna, the volcano in sicily, has erupted today. lava and ash spew iing from a nw

fracture on the volcano amid a high level of seismic activity so far, no reports of injuries on that one. meanwhile, rbg is up and working as she recuperates from cancer surgery on friday. she remains in new york at memorial cell phosloan keterrin. in word on when she can return home now if you have presents to buy, you are not alone. the national retail federation says about 7% of americans will be out in force today most retailers opened early today. they will close by dinner time ron years ago when he was still a bachelor, he would start his christmas shopping about now, as a matter of fact he loved the energy of the last minute shopping. he would be out there playing tug of war over sweaters with old ladies e loved that stuff >> i love that i've sat already opened all my

gifts. i did christmas over the weekend. >> that's cheating well, instead of celebrating on my own >> are you celebrating boxing day today then >> or more yesterday saturday sunday thing. >> merry christmas, bill see you next hour. >> thanks, bill. >> right, up to markets, which are selling off sharply in this 28 minutes left of trading on christmas eve. bertha coombs is at the nasdaq for an update. >> a lot of the decline today, large caps, chips are among the worst performers they are down about 30% from the lies and the large cap tech and those communication names are both down about 24% respectively from the highs. however, apple and materials still negative and in fact,

those are both on pace to have the worst years since the financial crisis of 2008 some consumer names today also among those that are under pressure jd.com, kraft, hines staid said to be interest nd the campbells soup assets. we have a few names getting little bit o f on the nice list from santa ulta is one of those it's up for the year 4% which these guys, these days guys, is saying a lot. back to you. >> some stand out performers got a market flash on gold >> as stocks move low e, gold prices are at a high as investors seek a bit of safety going into the holiday shortened week we're trading at 12.72, so near the highs of the day and that outperformance in gold is helping the gold miners stage a rebound on pace for their best quarter since the second quarter of 2016.

led by barrett gold which was up about 4% in today's trade. aside from safe haven by bying, the weakness in dollar is spothing price, but it's important to note that gold is still on track to close the year lower. it's down about 3% and some say it's the fed's intention to raise rates. how that could eventually run counterer to gold's appeal right now though, trading at 12.72. back to you. >> all right, thank you. the other lingering issue for the market, the partial government shutdown. what is the uncertainty in washington mean? let's bring in jim john, ceo of hyde capital partners >> i think the sell off is art of a nonevent. >> you mean the shutdown >> right i don't think the shutdown has any particular financial significance at an effect rather it's a symptom of overall chaos,

dysfunction and other factors that investors are upset about >> john, is chaos and dysfunction a fair summary of the stated play in washington and is that likely to be a fair summary of the state of play prt next two years based ton last week or two? >> maybe not fx for the next two year, but as we get into the new year i think the real question is looking at these issues with the more bigger issues like a debt ceiling debate >> what do you make john of that statement from the treasury secretary of over the weekend and the implications that has for the functioning and control this government has over financial conditions >> sure. i think we were all shocked to hear that you know, mnuchin was making calls to six bank ceos. and asking about liquidity

it wasn't a question on anybody's mind going into the weekend much less today. so i think we're all wondering are we missing something i don't think we are i think he was trying to give comments and support to the market and it backfired to everybody. >> i think also there was more to comma conversation that now i can report to you had to do with the economy and questions about what the market was signalling with trade and the shutdown out there and everybody else the powell uncertainty, so how does that all resolve? if we get an end to the government shutdown, if they aren't managing to make a deal, do you expect that to be ba catalyst >> i think that's part of the equation the shutdown pullinging well in some places. it was quite a big hit with my new york city cab drivers this weekend. really i think investors are waiting to see if the fed can regain its foo footing to align its policies where the economy needs to be b and other fakctor

out there, whether it's geo politics, the slowing economies in the rest of the world, whether it is concerns about trump bashing the fed,al all of these things exacerbate what's financially or what is fundamentally a valuation question >> john, i guess all of the discussion today there has been focused very much on the u.s when you look at the market sell off we've had, whether it's many the last week or the last few month, do you think it's u.s. related factors or really the international pick chature that continues to spook markets >> i think that without a doubt, the biggest committee is global growth >> without a doubt, the biggest committee is global growth what's it going to look like going into next year are these going to manifest going -- >> what about the fed? didn't mention it. >> sure.

jay did a nice job explaining that to the market although they didn't hear correctly. >> jim, your view on that. >> i think that's about right. you want to k lolook at the fundamental drivers an growth around the world i think that the market's misreading of the fed's intentions has been a particularly important factor. you can see that during the press conference when he talked about how he's going to maintain policy as shrinking the fed's balance sheet. the market dropped just as he was saying that. the market is trying to send a signal back to the fed standing up and answering questions that no one was really asking suggesting that you got the mgs to and get can't out of

its own way. the president seems to act against its own interest when he is bashing the fed to prevent it from moderating its policies or sends mnuchin out there to do god knows what to try to talk the market up. >> mick mulvaney suggested this could last a long time, which is a signal feels like they're far ar part at what point does it have an impact on the numbers? >> sure frk you look at the shutdown comparesed to one's in the past, it's a much smaller portion than it's been historically i would say the markets are realizing that may take longer, not shorter.

i think they're more worried about the debt ceiling debate at the end of february. >> thank you very much we'll leave it there we have 20 minutes of left >> which is weird for 12:40. at the key closing date, off o down to bob pisani on the floor. >> it doesn't feel like christmas. that's for sure. let me show you something, sectors. we put these up every day. relative outperformance going on it's just getting clobbered today. utilities and reads and consumer staples are getting sold off more than the overall market you can't say staples haven't

been sold off. there's new lows, the retailers are up today n no new out look at the dow. relative outperformers not gainers. home depot, vita, gold man. jpmorgan citigroup around there, too. they're not selling the bank stocks off as much they are the rest of the group. i'm trying to find some understanding here of what people are doing and final new day of year. looking for some kind of bottom. we mentioned this 23.50 as a potential bottom which would provide zero earnings growth and a multiple of 14.5 going into

2019 that's discounting a lot of bad news sitting around 23.50. we'll see how the close goes the other thing i would note is the volume is fairly heavy for the day before just down on the floor 25 million shares. on a norm dahl a, half of that so it's much heavier than usual. back to you. >> as we've been discussing, there's a laundry list of concerns this market has you've talked to these traders and investors, take calls all day long what's at the top of the list as far as why the relentless selling. in the face of what should be some positive headlines. >> remember, the big lists out there, what was the fed overreacting and going to far on 2019 it's turned to a somewhat questionable force there's tariffs in trade and global slowing those are the big three.

it's bigger than tariffs and trade. now we have a fourth problem out there. that's bill risk whatever happened over the weekend was not market friendly. it's not clear exactly whether the president was directing mr. mnuchin to do something with the plunge of protection team. this is added political risk that is one of the reasons that the market is down here. we don't particularly need to be a fourth risk that's out there but it's very obviously when you talk to people, political risk is now one of those instead of big three, there's big four. this is a lot for the market to deal with going into the close i suspect things will get better in the dwing of the year, but we have four more days. then all of a sudden, you're down another 4 or 5% >> great stuff we'll see you again at the close. 17 minutes down 516 crude oil touching its lowe ese

levels since july 2017 opec and others have signalled they're going cut. >> join iing us now, chief oil analyst at opus, thank you very much for joining us, start with you, john. in term of whether or not the turn of the year can change sentiment or does the ongoing negativity continue? >> i think it continues for a while. until we start to see the production cuts actually be impleme implemented and do what they ne needed there's no place to hide in the markets. the negative sentiment sweeping across really everything and for now, the dow pressure is going to persist i think the bottoming level, you guys are talking about bottoming

levels, one for oil is around 42 bucks. >> 42 bucks, so you say it's down and how much negativity is being reflect ed in the price of oil >> i think one of the thipgs you guys touched on was the concerns about global growth. that's a big one right now the political risk which was the previous guest i think mepgsed as well. so you have those things along with u.s. production at or near record highs. saudi arabian production was high russian oil production was really high. thesecuts are probably going t work, but it's going to take some time for them to show up. if you think about first quarter, you have refinery maintenance going on >> are there opportunities out here in terms of those that benefit from this fall in the raw price of crude and have a had to lower their own prices of refined product. >> so a lot to have refiners with sophisticated systems volero then marathon but one thing to remember if there is any slowdown, there's going to be a loss of exports

and if there's a loss of exports, that could leave them exposed. because prices have dropped so, retail hasn't had a chance to catch up you have some public companies and for the fourth quarter has been off the charts. >> you mentioned, we're at session lows dow is down 534. >> what do you think is the relationship between the stock market and oil >> these ills affecting the stock market everything from the trade wars as bob was talking about and the apparent global slowdown all the sentiment measures out there from the various pmis, recently, too. the empire state fed and the philly fed both had negative surprise prints to the extend we're worried about economic activity next year, it speaks to global oil demand and fuel demand that's what's help iing to drag

things down now. i'll stay on the flip side in terms on worries mattis leaving the administration, the middle east, the game board could look a lot different. >> i was going to ask about geo political risk it's something that could quickly support oil prices to the upside >> very much so. look, john bolton has long wanted to take it to iran. certainly general mattis was known to be what opposed to that now turkey may have a free hand to take it to the turks as well as remark. nobody wants a kurdistan except for the kurds and there's a will the of oil hanging in the balance that could come under fire literally and figuratively. >> so denton, is it overdone energy stocks this year down 25% right now. they're losing another 3% in the market right now i know they're tracking the

fundamental price of oil do you see it as an overreaction >> maybe a little. then the refining projects the margins for diesel and jet fuel have been solid it's gasoline that's been an albatross right now. >> just to round things off in terms of your forecast what do you expect this time next year for wti? >> i have to give the benefit of the doubt to opec and russia and the saudis in particular we can be back by then >> we'll have a wait and see on that 60 and 70 44.2 thank you both very much >> cheaper gas prices. >> cheaper, but it's one of the points hasn't fallen as quickly and therefore, there's some margin expansion for some of the names. >> for the u.s. consumer a look at some of the weaker performing stocks.

we've been tracking the individual movers. >> the softer dollar environment not helping oil stocks stage a rebound and we continue to see strong correlation the s&p energy sector, the second worst performing sector, down over 3.5% some of the biggest decliners there, hess down over 5%, so the losses have accelerated as we head into the close. a shortened, abbreviated trading session, but you're seeing the oil underperformance really translate into weaker losses back to you. >> great stuff tech stocks have been b hit hard today. they're not in relative sense, but down like the rest of the market let's check in on the movers at the nasdaq >> one of the things i'm watching has been apple. it was really the real juggernaut moving high ner the

year now it's one of the biggest drags of the year. down down about 13%. it's down 36% from it's highs this year. that's how bad ly this stock ha broken and today hit a new low and just didn't attract any kin buyers at all. the latest on apple is word that chinese executives are telling their employees to boycott apple products in the wake of the arrest of the huawei executive, in a sense boycotting our big tech because their big tech is under pressure amazon has managed to hold on to some gains here as we go into the end of the year. that has also been a big deceleration here. it is down again today as well you think about both of these stocks had valuations above $1 trillion at the beginning of the

quarter. here they are looking like the laggards for the month one thing that is interesting as we had mentioned, china, the china trade is one thing weighing on some tech names, perhaps not amazon, but chipmakers, foes lilks like appd tesla. but today we're seeing nibbling on some of those stocks, but some of these have been beaten down today, when there's a lot of red, we get just a tiny bit of green on some names. overall continuing to see a fairly negative feeling here on the nasdaq as both the nasdaq and the nasdaq 100, the relative out-performers are now down about 9% respectively. back to you. >> all the winners bertha, thank you. the tech sector on pace for the worst month since october of 2008 our next guest does see

opportunities. here to name some names is david garrity. where are you buying right now in tech, david >> sara, the back drop we're looking at in terms of protectionism being pushed forward by the trump administration is leaving smaller companies. something that really doesn't help growth prospects. in terms of looking at this pullback, the market down 20% since september, we see opportunities in names and ones that are not dependent upon global supply chains that are being disrupted. certainly in the case of amazon, certainly very, very much a play on the developed country economies, the disruption taking place in retail. amazon an attractive company in that regard. the pullback makes us think about committing maybe not at these levels but thinking more about it as we move into 2019. other companies that are being used daily that are not as

exposed globally, microsoft is one. and then also last but not least netflix. even though there's rising competition for other companies, netflix has good momentum going into 2019. >> that's because netflix is not affected by trade, and therefore the valuation pullback is an opportunity? >> exactly to the extent we're looking at the market pullback as a whole if we look at the impact of protectionism, that leads to a world where companies have smaller markets, basically rising costs, and we have slower growth i think the market pulling back here is the market as a whole normalizing to a higher inflation, slower growth environment. have we finished that transition process? that's dependent upon what the administration does next on these fronts there's a lot of bad news to deal with >> i get your fundamental thesis, a lot of this is supply chain related, trade related,

there are some concerns there. santelli earlier i think put this into context. he said the central bank was easy easy money was flowing for years and years. zero interest rates. the market was used to it. netflix, amazon, facebook, these were the biggest beneficiaries that trade is just unwinding as the fed becomes more restrictive, we get to a more normal policy. if that's the real reason, how much more down side do some of these names have to go as this big unwind plays out >> the issue is not to pick out one reason there's a confluence of factors. the monetary authorities did need to unwind the quantitative easing we had seen since 2009. eventually we'll have another recession. you need tools available for central banks to use to offset the impact of that exacerbating this withdrawal of liquidity under quantitative easing is this move towards protectionism which gives us a

double whammy that the market has been having a difficult time handling the question is how much longer does this negativity play out into 2019. that said, we think there's some names to look at in this downturn we've been going through. >> what do you make of the fact that alphabet and facebook are one of the two -- or two of the only names in the communications services sector that are higher right now? and actually higher on the week. the fact there's clearly nibbling in those names. >> the nibbling boils down to expectations is the 116th congress when it convenes still focusing on social media and the need to regulate that. a lot to of news that continued to come out relative to facebook, google, social media companies, the interference of foreign powers remains unaddressed. because of those reasons which are very high from a national security standpoint, these are companies which will continue to

be under skrucrutiny. we see some hope here, but i don't think it lasts >> so you think now is a good time to get in on some of these names or do you need to hear more clarity on whether trade talks are going well with china and whether there's any deal that can be struck within this 90-day period? >> you can start thinking about scaling in to microsoft, into amazon, netflix. amazon you might say is at its seasonally strong period so that would be more of a short-term trade but a name like microsoft or netflix might have a little bit better levels here if we were look at going into 2019 with these names long in the portfolio. >> which ones would you stay away from as -- just looking here at session lows with minutes to go. the dow down 600 points. which tech names would you avoid? >> stay away from facebook and google for the reasons we talked about, which are more government regulation oriented. but obviously, you know, apple

is having difficulty here. the fact there's a battle between the u.s. and china over huawei, certainly that will make things more difficult. i don't think apple found its low here those are some of the names i would stay away from >> david garrity, thank you for weighing in. >> merry christmas thank you. the dow down of 0 points wilfred on the floor for the closing countdown. >> we are at the session lows, down 600 as you said on the dow. 2.5% down on the s&p gordon, huge telloff again the volume is not that thin for the holiday. >> not thin at all for these days very interesting day we're just not seeing any enthusiasm on the buy side meeting any of the sell orders and the volume is, you know, exaggerated for this kind of day. we talked to the traders -- >> is that mnuchin's fault >> didn't help but i think overall guys are wondering now, is there something underneath all this that people are not reading that is keeping people from jumping in or deciding that they wanted

to get involved here at these levels we're seeing a lot of these stocks getting beaten up and they should be attractive at these levels >> will we see the numbers go lower? >> seems to be the trend is going that way. >> just over two minutes left to trade. s&p 500 intraday chart for you tells the whole story. we had a brief attempt about an hour into the shortened session to rally, but red throughout the session. lows of the session. 2.5% lower in the s&p. let's look at all four indices the dow down 600 points. nasdaq down sharply as well. it is the relative out-performer. it's pretty ugly out there the sectors doesn't paint a better picture all the sectors lower. utilities, defensive sector supposedly, but down over 4% as we approach the close. all sectors are lower. communications services,

consumer discretion near the top, nothing looking attractive as we speak. utilities down 4%. very quickly as i bring in bob pisani, look at what this means for december, down 13% as we speak. you can see -- 14.6% down for the s&p 500. we'll show year to date. it paints the sharpness of that selloff. >> i hope you will join me in my effort to make boxing day a national holiday in the united states let's take off wednesday as well >> i agree >> four hours we've been here, already it feels like friday there's not a single time ever the s&p has been down 1% on new year's eve >> new year's eve or christmas eve? >> christmas eve ever we were checking with our statistician, he confirmed that. >> made up for it by being down over 1%. >> gordon made a good point. i kept talking about the lack of buying interest out there. we had modest selling pressure, no buying interest with the

number down around 2350, a level a lot of people talked about where you get assumed zero percent earnings growth, 14.5% multiple for this year that's discounting a lot of bad news >> it's not a happy close, but may i wish you a merry christmas. we'll see you back here on boxing day, alas there goes the bell. ugly close, down 639 points on the dow. sara, back to you. ♪ >> with that close the s&p 500 falling into bear market territory. officially down 20% from its last high. welcome to "the closing bell q i'm sara eisen wilfred frost rejoining me let's look at how we are finishing up this trading day.

worst in history for a christmas eve close. dow down 639 points. 21,801 is the final close. all sectors in the red falling sharply. the nasdaq down 2.21 it fell into bear market last week it's down 23% from the recent highs. russell 2000 index has been underperforming all year long. it is down 2% almost on the day. wow. treasury secretary steven mnuchin spooking investors earlier after calling the heads of the largest u.s. banks to reensure investors that they have ample liquidity coming up we'll get more information from roger altdman all 30 dow stocks closing lower today. nike the biggest decliner. energy got obliterated across

the board. bob pisani has been on the floor of the nyse. bertha coombs is at the nasdaq bob? >> the santa claus rally is off to a terrible start. i told wilf we never had a christmas eve down 1%, let alone 2% if you look at sectors, defensive names were down very big. utilities, wreathreits, consume staples. the dow laggards today, procter & gamble, johnson & johnsons, coke, pfizer, they were don't most we told you about the three risks out there. rate risk and the fed. tariff risk and global slowing there's a fourth one still floating out there

political risk a lot of discussion about the trump/powell headlines the mattis resignation that adds into another piece of the stew here that makes it difficult to figure out where the bottom is. a lot of people were talking about pension fund rebalancing if you're a pension fund you're underweighted in stocks, you might want to buy. we had buybacks, 79 in the last couple weeks the question is will that make a big difference to the markets overall? and the santa claus rally. starts today what a terrible start. that's the tendency for the market to rise in the next seven trading days average gains since 1950, 1.3% this is because people tend to sell their losers in the first half of december and try to buy some winners for 2018. that is not happening today. wednesday is another day

we'll see. >> we'll see you then. bob pisani, thank you. >> let's get to the nasdaq and bertha coombs. sharp drop there >> we saw 1,000 new lows that's not something you see on a christmas eve shortened day of trading. a lot of big momentum and a lot of those lows coming in the large cap, including one of the largest capped, apple. you can look at that one it's down 36% from its high in october, back when it supported a market cap well above $1 billion. it continues to be the big drag here now down about 12% for the year, on pace for its worst yearly performance since the financial crisis apple is not the only one of the mega caps that was seeing new lows today a couple of them bounced facebook and also on pace for its worst year ever.

down 42% from its highs. alphabet also bounced and managed to be relative out-performers, even there a fade going into the market close with about flthree components o the nasdaq 100 trading to the upside when the closing bell struck also among the losers, marriott, biotechs like gilead, gamers like activision, normally a great time of year for the gaming stocks, they've been left to the bears finally tesla. tesla not getting much good news here in addition to some headwinds that it will be facing in china, the company also will be providing sort of makeup credits for people who bought those cars and hoped to get a tax credit in order to pay for them this year, but because of delivery delays won't be getting those. tesla making that up

back over to you >> thank you very much for that. for more on this selloff we're joined by stephanie link from nuvene and david ellison good afternoon to you on this christmas eve. >> terrible afternoon. >> not good for markets. exactly. what's your take on the size of these moves? enormous >> we just didn't need more bad news we did not need mnuchin and to be confused by the commentary he was talking about. we didn't need a government shutdown this adds to the negativity we already have out there and the concerns we have out there mainly on trade, mainly on the fed and on international growth slowing. you add it up, you have a holiday shortened day and week most do not want to take any kind of risk >> so you said it was trade, it's -- >> i think it's everything we came into today being concerned about trade. also about the fed then you add this to the mix it's just an excuse not to buy

it was interesting to see the sectors that led relatively today. >> it really was the cyclicals that led on a relative basis defensive stocks before clobbered. you kind of want to see that you don't want to see this market being led by defensives you want the market leadership in growth and cyclicals. we're nowhere near that yet. >> to me, the tell was p&g p&g was such a relative out-performer. it was considered defensive. people need to brush their teeth. it's been a better performing stock. so the fact that it was one of the hardest hit dow stocks tells you what baby getting thrown out with the bath water >> yeah. but i also think it was overbought 24 times forward estimates for 1%, 2%, 3% organic growth. you could get a better growth at

mcdonald's so they're selling the winners today. what's happening and twwhat wil happen for the rest of this week, people will be positioning for 2019 '18 was hard let's see if we can get a couple high quality companies down so klatt d dramatically -- i'm not talking about the p&gs, but if you can find quality in this environment, that's what i've been picking >> david, what's your take big moves lower across the board. >> i think part of the problem is twitter that's creating a lot of problems with all these guys talking. that's part of the problem i think the issue with the market -- to me, you guys have covered a lot of the topics that are important. i don't want to repeat that. my observation is that the market is falling and nothing has gone wrong economy is good. >> why is the market falling >> that's my point

i have never seen that i've been doing this for 30 plus years where the market is falling into no bad news at least -- >> so are you buying then? >> no, i'm waiting for the bad news i'm waiting for something to go wrong. '08 was a great buying opportunity because things went wrong so we could get better i think -- i view investing as you make money when things go from ugly to okay to good to great. things are somewhere between good to great right now in terms of the economy >> only really here in the u.s., david. do you think the markets, looking at the international outlook or more to the point looking at the u.s. outlook, 12 months ahead >> i think most investors in the u.s. market are u.s. people who care about the u.s i think international is important, but it's on the margin that's why that market over there could -- those markets

could be so difficult. we would be okay japan did nothing for almost 20 years and our economy did fine there's two things, one, nothing has gone wrong yet and, two the index funds, we're seeing the other side of the index funds. so when all the money was pouring in the last four, five years, they were valuing different on the way up. they were buying all the stocks. now the reverse is happening that's why you see the s&p and the dow both down 11% for the year there's no differentiation because they're selling everything that's got to get washed out as well the market changed a lot since 2008 the structure, who buys it, how it's bought and sold so we have seen false liquidity the last four, five years. everything looks liquid and fine, now we see the other side. this is the test we have to go through. this is the opportunity. it will be -- better times are

ahead. we're getting back to capitalism and not fed supported stock prices or bond prices. >> one thing that we're looking for reasons why, one thing i keep hearing from big investors is why the relentless selling. markets are fighting the fed the fed is not being reactive. not factoring in inflation expectations have been falling making the mistake of getting ahead when they think the markets are overheating, and we're not overheating, we're slowing. >> the committee lowered targets for next year and this year for pce. that's the numbers they look at to identify inflation. for them to lower that expectation and to raise ratedr is a contradiction i think trade is part of the problem and the fed is part of the problem. >> are you waiting to buy? as someone who is long, you look

at the fundamentals of the companies which are looking good, do you have to wait until the market stops challenging the fed here >> yeah. we don't want to fight the fed on the way up and on the way down, i think we've seen an overkill on some of these companies. when you can get american express at 11 times forward estimates or union pacific on 12 times forward estimates. they're restructuring, those kinds of things, i can find companies that are blue chip in nature, down 20, 30% 40%, i find that's attractive. it's been wrong buying the dip this year. it's been right to sell into the strength that's not my style. i'm looking for blue chip quality companies on sale that have catalysts where i feel confident in the longer term picture. >> despite today oom's selloffs, stocks got a boost after david tepper told scope wapner he is

using the downturn to nibble at some stocks today. the idea -- i was with skocott when he reported this he saw an opportunity within this sharp slide that we got early morning that things were overdone or washed out just went to nibble. >> especially in particular sectors, like tech, like f.a.n.g. i added to salesforce.com as well if you listen to the company and what they had to say, they're talking about margin expansion they're not talking about a slowdown in i.t. spending intentions for next year that is key. the stock is down since then what i mentioned before, a lot of companies down a lot, specifically in the cyclic the sectors, in technology, in financials, in materials, that's where your value is. it's not across the board where i have earnings confidence, it's in specific companies.

>> david, you were saying you wanted to wait for more bad news before you buy, despite being constructive on the u.s. market. any stocks in particular you've been buying the last week or so? >> i think everything i bought in the last three months has been wrong they've all gone down. i think that there are -- the big banks look attractive, but they looked attractive two months ago now they're down 10% i think you have to -- i own them i run the funds. we do the best we can. the idea is not to panic and fundamentals are fine. we have to work through a cycle. you said it. i don't think anything has gone wrong yet. so that's the issue. once that happens, that's the time the average person can buy with more conviction and

assureditassure assurity i would rather buy here than have things back off so i think it's an interesting time the stock prices are polices they' prices the companies are doing fine but the stocks could go up or down you have to be careful to say the stocks acompanies are doingo stocks should go up. in 2018 we're saying it's okay, the economy is strong. we have to stop making these broad generalizations. wait until something goes wrong, then we can be more constructive about what we do >> interesting perspective just wanted to update you on a story that everybody on wall street was talking about today that's the treasure put out a statement last night saying that the treasury secretary, steven mnuchin held a call over the weekend with the ceos of the six

biggest banks. they said liquidity is all fine. nothing to worry about there was a lot of anxiety about why did the treasury put this out? there was no worry about the banking system or liquidity. i talked to a senior treasury administration official who said going into the call the secretary was not worried about liquidity whatsoever in the banking system and heard that messaged from the ceos, that there was nothing to worry about. the call was intended to be a regular check in given all of the concerns out there around powell and the fed, around the shutdown, around the trade, the markets and around the u.s. economy. the message they got from the big bank ceos was that the u.s. economy is okay and strong actually concerns about china and europe, but that there is a disconnect to david's point earlier between the markets and the economy. and the senior treasury official told me the mistake here -- they

were only releasing this out of full transparency. the official saying the mistake might have been making the lead headline about liquidity when that wasn't the concern. it was just a check in this is nothing unusual. the other piece of news i can tell you, there was concern about the president firing fed chairman jay powell, when steve mnuchin tweeted out saturday night a direct quote from the president, that he doesn't intend to fire powell and that he doesn't think he has the authority to do so, that was directly from the president. it was dictated via the phone from the president there is no intention to fire the fed chairman >> the one thing to tick pick um that is regular. >> routine

>> if it is true which it is, that it's two days before christmas this is not regular. did he really convince that you this was totally routine and regular? >> i think it's routine that they talk to bank ceos they have to have a relationship that should be reassuring to markets. when you are coming off the worst week in stock for ten years and there's concerns about shutdowns, fed, trade, it's not unusual for a treasury secretary to call the bank ceos. what was unusual is the release and how it was phrased steve liesman has more perspective on this. what's your take >> i can tell you in my years of coverage there's nothing regular or usual about any of the events you just described the idea that the president -- that the president would tweet out the criticism of the fed that there would be several stories backing up the idea that the president was exploring the idea of getting rid of the federal reserve chairman

that the treasury secretary would call the heads of the biggest banks from vacation in cabo to check on their liquidity. nothing usual or regular about that i think it might be one of the reasons we're on the verge of the worst christmas eve stock decline ever is what pistoriec said the president tweeted this afternoon. the only problem with our economy is the fed they don't have a feel for the market, they don't understand necessary trade wars and strong dollars. steve mnuchin talking to heads of banks on saturday, there were reports

that the president was asking if he could fire jay powell and now it's been tweeted that that's something the president doesn't think he has the authority to do. and on saturday at the stroke of midnight, the government endered its entered its third shutdown of the day wilf >> steve, i want to come back with one key question. regardless of the quality of the pr and press team that advised secretary mnuchin over the weekend. if someone asked you on friday if banks own liquidity was strong and whether or not we were heading in any way, shape or form of a repeat of 2008, what would your answer have been >> i would say definitively not. the fed has taken a lot of steps to be more transparent about its gauge of liquidity in the

banking system you have been involved in reporting some of these new reports that the fed is putting out. we know what the banks have said liquidity and capital ratios are at or near all-time historic highs. we're better than the european banks. i don't think there's a liquidity question in the banking system you have done reporting on single stock liquidity it's hard to look at volumes we do and the lack of gap pricing, wilf, which when we get to illiquid markets, stocks go from a dollar to 50 cents or they shutdown no sign of that in almost any market i've seen you get blowouts in cbs spreads. if i look at the latest quotes on the bank cds, a measure of bank default concern i was here and covered in detail the financial crisis there's nothing that's been

going on that shows that failure of people to remark essentially how orderly this rather steep deline has bed decline has been in the markets. >> i don't think any treasury official or secretary would disagree with you. they weren't concerned about liquidity going in that's what they hearded from the bank ceos and they told the public that. why are you pinning that directly to the selloff? what's the worry >> they issued a statement that makes it seem like they're not the adults in the room that people thought they were it's a remarkable lack of understanding, i think, of the role of the treasury and also this idea of the continued attacks by the fed they're trying to walk it back that's a sign of progress. >> thanks as always. >> let's continue this

discussion with roger atman founder of evercore. he joins it's by phone thank you for joining us what's your take on this weekend's developments, particularly from the treasury secretary? >> first of all, merry christmas to both of you >> you won't get a better rundown of the back drop here than steve liesman just gave you. it's common plaplace and appropt for the treasury secretary to speak regularly to the heads of the largest banking and securities firms what's unusual here and what was a mistake was issuing a statement concerning the liquidity when no one is concerned about liquidity and it implies either that the administration itself is concerned about liquidity and wrongly so, or that the treasury secretary is out of touch with real business credit market and financial conditions

however you slice it, it was a mistake. all you do by issuing a statement about liquidity when no one is concerned about it is to cause people to wonder whether there actually is a problem when there isn't >> i can tell you definitively, roger, just to clear something up here. according to a senior treasury official they were not worried about liquidity going into this call the message they got from the ceos is that everything is fine. that's what they expected to hear on this call. they just put it out to the public because they were trying to -- people ask about liquidity when you get market meltdowns. they were talking about the economy and some other concerns out there. the mistake i think according to treasury may have been whether to lead with that liquidity point. that wasn't the point they were worried about it >> as steve said and i'm just echoing putting out a statement essentially saying that liquidity is ample when that

type of thing is only made during credit crises or emergencies is not a wise thing to do. it will pass it's unfortunate that the washington overlay as a whole blasting the fed, raising issues about whether you can fire the chairman when you can't, the shutdown, the trade war and so forth, that is putting downward pressure on valuations, and the market almost all of that is needless >> roger, when you step back and see this type of action what does it make you think about the quality of leadership of individuals at the treasury and in the white house more broadly? >> i'm actually grateful for mr. mnuchin. he was the one who persuaded the president to appoint mr. powell

in the first instance, and when you look at the remarkable dismissals, vacancies, and general chaos in terms of senior ranks of the government, you say to yourself that we're fortunate that someone who is calm and steadfast and knowledgeable like jay powell managed to get appointed. almost seems like a stroke of luck, but mnuchin, i believe, is responsible for that that was a pretty important thing. i think if that position was vacant today, god only knows what mr. trump would do. this is a low point between washington and financial markets or the impact of washington on it

these things happen, but as i say, it's needless >> is what you're saying how you interpret this slide, you think it's policy mistakes and errors like this or some real signs of slowdown in the u.s. economy or the markets signaling something that economists are not forecasting for next year? >> i think it is a measure of the second factor. i disagree with some comments that your guests made a few minutes ago. i think the outlook for 2019 is weakening. if you look at a series of factors like bond spreads, like the trends right now in consumer net worth, like the index of leading indicators, you see weakness i think we'll see that 2019 gdp

forecasts which were running broadly in the very high 2s, like 2.9%, will be marked down quite a bit. maybe by a full percentage point. so actually i think the market is reflecting an anticipated slowing, not a recession, but a slowing to a greater degree than we would have anticipated. >> are you seeing that in deal activity will it slow down heavily? >> i'm not seeing that now these broader indices that i ticked off, and you could add a bunch of others to that list, commodity prices, a series of others, they are tilting in the wrong direction as far as growth is concerned we all know that the rest of the world outside the united states is discernibly slowing, so the narrative of synchronized global growth, which we were all discussing a lot six months ago,

i think it has removed itself. we don't have that now that's driving markets upward and should have been now the outlook has changed. i don't think it's all about washington yes, there's an element of that, a big one, but it's also about the actual growth outlook in the quite, which has been the one engine for the world, that growth outlook is slowing or singing. >> roger, thank you very much for joining us appreciate it. merry christmas to you as well >> same to you guys. >> stephanie, sum up the take on the last ten minutes do you think that's fair what he was saying at the end, the market is expecting a bigger slowdown next year than perhaps some commentators have been saying >> for ure with trade we don't know how that will impact earnings. on the fed, we don't know how tight they'll be and what that will do to overall growth. at the same time, by the way, in

the beginning of this year we expected 2018 to be a 3%, 3.5% gdp year but then with '19, we thought 2.5%, 2.8% we already thought we would slow we already knew we would slow. now this is exacerbated because you don't have the inputs from what will it mean from trade and the fed. and then you have this noise of mnuchin, and i agree with roger atman th altman that it was poor messaging. it was just poor messaging overall to a fragile market to begin with >> let's bring in some more voices let's bring in peter boockvar now on the phone this ugly close on christmas eve holiday shortened day, peter,

what stood out to you amid the selling? >> putting aside the fundamental factors which we all know that is impacting markets, you have the technical factors. the first time in ten years you have taxes, people worrying about redemptions. there's a lot of people raising cash to meet redemptions this time of year every human emotion gets exacerbated no one wants to miss around on the upside, everyone wants to run out the door for the down side december dollars are precious when a money manager is managed. what you have been addressing for the fundamental reasons, certainly a lot of legitimate reasons for the selling. >> peter, talk to us about the u.s. economy itself. we were discussing that with roger. in the last three months, we've seen this u.s. equity market selloff pick up pace, has this significantly worsened in the

last three months? >> i think most of the weakness that we've been seeing has been overseas it's naive not to think that that weakness overseas is going to merge into the u.s. at the same time we've seen softness in housing, a plateau in autos, two contributors to the economy. but i've argued for a while that with the consumer being the strength of the u.s. economy, what would impact eventually the u.s. consumer would be the potential decline in asset prices because we're so dependent on elevated asset prices you look at the fed fund statements which was updated a few weeks ago, net worth as a percent of disposable income was 700% never have we been that expensive in terms of asset prices to the relative economy then you throw in a trade war a double tightening by the fed, and then further uncertainty

with the shutdown and all this it's sort of a toxic combination, high valuations and those other factors i mentioned. >> peter, i wanted to ask about bones and currencies this feels like an outsized equity move. yes, we had seen the ten-year yield go below 2.80. we're seeing dollar weakness i'm not sure the kind of panic or the widespread selling that we're getting in stocks has been backed up by other markets what's your take >> the dollar weakness is attributed to the belief that the fed is basically done. you continue to see days like today. that's the reason for the dollar weakness and for treasuries, the ten-year yield at 2.80, it's still up 40 basis points bonds have not been a flight to safety whatsoever. a lot of that has to do with inflation hovering around two. it will recede from here, but

massive amounts of treasury supply because of rising deficits, and that historical balanced safety in treasuries, it's a changed situation when i talk about elevated asset values, not just in equities it was in picked income and a variety of other asset classes >> i would also point to gold. if we were seeing this massive panic flight to safety, you might see a bigger bid for gold which is a traditional favorite safe haven it's down for the year the last three months it's up 5% >> gold has traded better over the past week with the dollar topping out. at least over the last couple of days you are seeing that dollar weakness and that gold strength. >> peter, some people talk about now the fact we're not seeing a fed put to support economic growth and or the markets, that we could see another form of physical policy stimulus we got one late last year.

what is the likelihood of that and whether or not that could offset some financial conditions tightening that we've seen >> honestly outside of something related to infrastructure, which i never believe has a big multiplier effect, i don't think that's a crutch people should be leaning on i don't know what's left even if they do announce infrastructure policy, that plays out over multiple years. it's not something that is a quick fix. we spent a lot of fiscal bullets in 2017. >> happy holidays to you >> thank you crude oil breaking another key level to the down side seema mody mat detailhas the de. >> oil with a 6.5% move to the down side that underscores how this selloff is not just confined to stocks

the commodity market is playing a role there crude below $43 which has been a key level that it's been trading above. as part of this downward move in oil prices due to these concerns over the state of the global economy and who that opec-led decision to cut oil production will actually rebalance the oil market, are these concerns that we're seeing in the energy markets. you're seeing a number of energy stocks move to the down side the energy sector was the second worst performing sector in addition to this move we've seen in oil taking a step back with today's losses, oil is lower by 40% since the start of october guys, moves have certainly been notable. back to you. >> they have thanks for that. stephanie, energy names, buying opportunity? >> it's miserable buying any point this year. i've learned the hard way. what i've been doing is just on the price going down, it has

collapsed. it is a combination of supply and demand too but at 42, you have to look at the companies that can still generate cash employee and pay their bi flow and pay their bills i own some, but it's been painful. the technicians will say you're getting close on oil at 42, 40 to 42 on wti, i think you do want to wait to see it stabilize and stay there for quite a bit of time. you want to focus on high quality name >> let's switch sectors. the s&p retail etf outperformed in today's selloff but is down 14% so far this year also lower today it's on pace for its worst yearly performance since 2008. what about next year joining us now is bill simon and

liz dunn thanks for joining us. bill, what's your take on how good the last month for retail has been in the u.s. >> i think retail sales got off to a good black friday there was a slow period after black friday and the first couple weeks of december this year with a bit longer period between thanksgiving and christmas, it was a bit longer but the consumer is well and alive. they came roaring back online sales were strong physical stores took off friday. friday, saturday, sunday and into today they are doing well. i expect this sector to perform well through christmas, in the 4% to 5% range >> liz, are you seeing similarly good data? >> yeah. i think the performance is

strong there's really broad strength we're seeing strong growth online an even in stores i think the consumer is in good shape, but listening to your previous block, it's hard not to be a little bit concerned about 2019 trade wars are a factor here but in terms of the holiday, i think very, very strong. >> what about the subsectors, any individual names that stand out for you? i think we saw it in third quart other earnings performance was fairly broadly strong i like target. i like tjx, ulta, lululemon. there's some strong fundamental trends i don't know you could chase it in this tape or buy names that are down in this market because it's just all of the factors that have been outlined by your previous guests are unprecedented. i think people are looking for

the negative i don't think they'll react positively to strong fourth quarter numbers if none of these factors about 2019 clear up or have more certainty. >> bill what are the stand jut names for you? >> i thought target did well it was interesting to watch the battle for toys this year. this is toys "r" us first year out of the market. target went after it, walmart went after it, amazon did well of that group, target did the best in the stores and amazon did well online. >> thank you both very much. great live shots, liz in the san francisco bureau bill, not sure where you are, but very nice, festive back drop >> it's beautiful. merry christmas. >> merry christmas >> a winter wonderland time for a cnbc news update with bill griffeth. >> a turkish official says that president trump has accepted

turkish president erdogan's invitation to visit his country. >> the couple arrested and later released without being charged for a drone disruption at gatwick airport in london, they are now speak out for the first time paul gates says they were treated very badly >> as you can probably imagine we are feeling completely violated our home has been searched our privacy and identity completely exposed. our names, photos and other personal information has been broadcast throughout the world >> elsewhere, holiday scam calls are on the rise. according to a report by first ryan, the calls are up 129% since last year. 62% of 1,000 consumers surveyed

say they have received a scam call within the last serve danes. the scam with the best chance of success, asking the caller for a donation to a fake charity which does not help the real charities. that's it for here back to you. >> bill, thank you very much merry christmas to you dow and s&p posting the worst christmas eve ever in terms of performance joining us by phone is e ed yardeni ed what is your advice to investors? >> i think between now and year end there is not much left here. we will probably continue to see this downward pressure there is a lot of year-end selling going on people have accumulate td lots profits in the bull market with this selloff, they would like to keep as much as they

can. those who have losses are also going to probably be selling for tax purposes between now and year-end we'll create some great value and we'll find stocks will be looking awfully attractive going into the new year on a fundamental basis. there are other issues besides earnings driving the market, like politics, like trade wars >> talk about the numbers for the fundamentals why so attractive as we round out the year >> the economy i think will continued to grow next year. clearly we have taken a lot of the riskiness out of assets. i don't think the selloff will cause a recession next year. the consumer is in a good shape. maybe some capital spending will be held back until we get clarity on the trade issues.

i think on a fundamental basis earnings will be growing something like 5% next year. i knows there some talk now with the market down, that the market discounting negative growth in earnings the u.s. economy, the latest indicators on consumers, it's been strong. the global economy is slowing for sure the chinese are talking about a major fiscal stimulus package. they always seem do that when the economy slows. it always seems to work. europe has some issues, but it's still an economy that i think will eke out some growth >> but what about the valuations, ed the u.s. compared to the rest of the world. there was a big gap at the start of the year and the middle of the year is it evenly balanced? are financial stocks still cheaper? >> i think that's a good question i would say that it is evenly

balanced a lot of our out performance was technology, f.a.n.g. stocks, they've been getting whacked in a major way here in this selloff. we're looking at 14, 14.5 forward pe, which is actually slightly below fair value. i think the market will recover next year. not to say it won't have some challenges clearly with political chaos in the u.s. and with the trade war issues >> ed, how are you it's stephanie link. >> good. how are you? >> i'm curious on the bond market the yield curve has been flattening parts of the yield curve have inverted how worried are you on this and to tie into the question on valuation what do you expect for

earnings for next year at 14.5% earnings, what happens if that "e" is not right level >> if the "e" is flat, you can still get a valuation. maybe it's not juicy enough for investors compared to what we had this year which is about 24%. the bond market, i coined the phrase bond vigilantes in the early '80s, now i'm looking at the market saying maybe the dow vigilantes have taken over the bond market is saying all right, if they are going to protest what we're seeing out of washington, then maybe the bond vigilantes don't have to do much i think the bond market is telling us here we are talking about the fed maybe raising interest rates two thymes next

year, given what's going on in the stock market, we have to think about the possibility of the fed lowering interest rates going into the new year. >> ed, thank you very much for joining us wish you a happy holidays. >> thank you >> we have more news out of washington lawmakers reactinging to t intoe market ylan mui has more on that. >> chuck schumer and nancy pelosi say president trump is plunging the country into chaos. the stock market is tanking and the president is waging a personal war on the federal reserve after he just fired the secretary of defense the statement goes on to say that the white house is saying different things about what the president will and will not accept in order to end the shutdown the statement says the president wanted the shutdown, but he seems to not know how to get himself out of esident trump iso

meet with crihomeland security t 2:00 p.m >> can we wish you a happy birthday >> absolutely. thank you very much, wilf. >> double whammy >> best day ever shutdown and a selloff >> happy holidays. happy birthday ylan mui in washington for us. sara, some more comments you win today on the sourcing. >> this is the kind of day where big investors are weighing in the latest comments come from nelson peltz of trian. he weighed in on the trernry secretary saying this reaction to the treasury secretary is ridiculous, saying the administration is overly criticized, and for investors to blame the treasury secretary for

doing his job and being transparent is ridiculous and inappropriate. he's in support of the treasury secretary. the idea there is some big investors -- yes, peltz has met the president and has ties with the white house, he does not agree this is out of line for the treasury secretary to be calling about bank ceos talking about conditions and the economy. he says this is the sort of thing that big invests want to see the treasury secretary doing. >> absolutely. it's all about messaging it was just poor messaging that's what it was we just didn't need to come in today on a holiday shortened day and week where many people are not even in the office and you get this big headline. in addition the government shutdown over the weekend, partial shutdown over the weekend on top of this other stuff. it's just a fragile market, but it's the messaging

mnuchin, i think, he should be doing this >> i guess investors are not losing faith in this >> right fine >> they're putting his name out there saying i back the treasury secretary. >> i get that. but if we are seeing this selloff and it's not fair to blame the selloff on the treasury secretary, that is not an encouraging thing for markets to sell off so sharply >> it's an excuse. we are in glass half empty mode. mnuchin should be checking on liquidity. given what's going on in the levered loan market and oil prices tanking, bank exposure, sure he should be looking at these kinds of things. >> should he be doing it from cabo on a saturday or sunday without scheduling this with the bank ceos who were taken by surprise >> the market just had its worst week in ten years. >> then there was some fear about liquidity in order to have the call >> it's not fear about liquidity. >> it wasn't scheduled he's doing it from mexico. none of the bank ceos knew this

was coming >> i think it's prudent. >> i think it is, too. >> given all that has been going on again, you note bank industry quite well we're not really worried yet, but they have to monitor in. they know what's going on in their businesses it wasn't hard to answer the questions. >> their liquidity levels are fine, i'm not suggesting there's something about to explode but i don't think it's fair to totally defend secretary mnuchin in all of this this was badly handled whether or not it was prudent, it was badly handled >> absolutely. >> a lot of that bashing has come across on cnbc and some big names are stepping forward saying completely ridiculous, overreaction we have to hit apple now ending the day down more than 2% for the quarter, apple down 35%.

worst quarter since 2000 >> is there anything that could trigger a turnaround in the stock? let's bring in our guests. good afternoon big focus has been on iphone sales, expectations that will fall going forward and the pricing increases they're trying to push through will not be supported. is that a fair criticism >> i don't think so. i think what people get wrong is that apple doesn't necessarily have to grow the number of units for the stock to work. what's happening, this is the end of the smartphone boom the markets are saturated. at the end of the day you have to consider the fact they are getting the price increasing because of the fact that people are moving into bigger models. but the services revenue people talk about the services segment, but the higher margins

socie associated with that, for the first time we will see added transparency you think about amazon disclosing the aws margin, google disclosed other bets, this is a stock trading at ten times earnings and can grow double digits. >> where can services go >> i think it can continue to grow at 30% and within five years eclipse the ix phone business >> do you agree with that? >> no. >> why >> let's talk about units. the importance of units is to tell you how the install base is growing. if it is growing, you can believe services is a growing annuity. if it's declining, all bets are off. withdrawal of the units guidance indicates that at least units will be declining for the next year the question becomes is the

installed base going to be declining. i don't think it will be, but that's a risk. when you hear china influencing their consumers to not buy apple phones, you could have a drastic reduction in that iphone install base that's a significant negative. let's assume that doesn't happen the next question is services. why should services continue to greet 30% per year what's the driver behind that? you're saying the applications, number of applications, paid applications will increase 30% per year and/or the new subscription services rolling out will be adding that much more in terms of revenue we've done a lot of work around this we've done survey work the subscription attach rate for their subscriptions which will be only on apple devices is probably a low attach rate ultimately we don't think the subscriptions or the overall revenue will be growing. >> neil, your target price is

what >> my target price is $212 i have not updated the target price in a while if your question is is this a buy at this point in time, i don't think the stock will go significantly down from here, but what is the catalyst to go up >> 210 is a decent upside from here your thoughts for next year? >> they will grow more i think one of the things you have to consider, yes, the number of units may not grow, but you have to consider the share shifts in the market from android to ios all these privacy concerns, the privacy reaches. the thinking is that privacy will increasingly be a differentiating feature. people want to choose ios over android. >> guys, we have to leave it there, thank you very much oil fell below $43 per

barrel today touching the lowest level in 18 months joining us with more patrick deehan are we seeing the scale of the move in wti matched at the pump? >> really we are you talk about hurricane force headwinds. not only is oil getting hit hard, but you also have high level of inventories, and you have warm ware across much of new england which still burns heating oil. so not only do we have higher inventories but also lower demand with the dow dropping you have those effects translating over to oil $42 a barrel now gas prices certainly going to continue to decline.

that is like a tax break for americans who today are spending 2$225 million less than 75 days ag ago. >> how long does it take for lower gas prices to translate into higher consumer spending? >> at least now it is. it's not stuck around long enough for americans to get used to having the extra money in their wallets. the longer we stay here, i think over the weeks to come, especially after christmas, we'll see those lower prices maybe not translate into higher consumer spending yet because of weather, post-holidays are still hitting. eventually you'll see it january and february the optimism surrounding lower gas prices may offer a boost to the economy. >> which are the biggest stocks that are showing that gap at the moment between price they're charging and the fall in wti >> you look at refining stocks

really right now margins at gas stations are quite high as prices still come down refineries still look good, as long as you have less exposure upstream some of the traditional refineries, valero which is well diversified is doing well. this is still a tax benefit for americans paying less. certainly oil prices falling along with the rest of commodities and really the whole economy right now suffering from just concerns. >> patrick, thank you very much for that >> my pleasure today was meant to be half day, low volume. we had quite high volume was do you expect for the rest of this week is it hard to shake off the negativity >> i don't think anything will change between now and the end of the year. we won't get answers that's the problem >> what answers do you need? >> trade and the fed that's not an overnight

solution so that's the problem. back to the whole discussion on oil. low oil, low interest rates. job market strong. those are good things for the consumer, which is 75% of our u.s. economy i actually think if the consumer can stay strong or solid, 2in te face of a dollar that's stabilizing, that's a good sign. i think it's good for the economy and you want to pick your spots >> you go back to domestic u.s. stocks like what? >> i was buying a handful of things we talked about american express, home depot, costco, mcdonald's, union pacific. i could give you a list a mile long you wanted to be careful because you don't know when the bottom is in. so you average cost in, take a longer term perspective, look for good companies, good balance sheets hopefully we get a new series of buyback announcements that will help execution on those buybacks.

>> the bullish case. >> i'm trying. >> the fundamental data on the u.s. outperformed the world. >> it has. we're sorry we didn't have better news to bring you today wishing everyone a have merry christmas and happy new year that does it for "closing bell." >> "shark tank" begins right now. ♪ with an easy way to take a comfortable bed with you everywhere you go. hello, sharks. my name is jim pittman. i'm from yorba linda, california, and my product is airbedz, the original truck bed air mattress. i'm here today seeking 250,000