out of a growing market bubble. [closing bell rings] football, you name it. another flash day, but looks like we're moving to the upside by 311 points. that will do it for quite the "claman countdown" week. melissa: wow, whiplash on wall street as stocks make more dramatic moves capping off a wild week of a ton of volatility. the worst week for the dow and s&p in more than two years. we've seen major comeback in the past half hour. we were up 500 points a couple seconds ago. david: it changes with a flash here. melissa: yeah. looks like we'll be up 334 on this session after experiencing more than 1000 point swings again today. all three major averages ending the day up. i'm melissa francis. david: you know, i just have to break for a second here because you mentioned something, when i came on. the quants are making out like bandits. people that trade on volatility. these dramatic swings back and

forth, up and down have to do with people making money on that volatility. melissa: yeah. david: you can't discount that possibility. i'm david asman. glad you could join us. very important day on "after the bell." this hour we're taking stock of what happened this week and what investors are preparing for in the next leg of this historical market transition. we've got a jam-packed show. among our guests, market watcher, harry dent. back no november harry predicted a late january, early february selloff. i kid you not. so where does a man who nailed the prediction see things going from here? former fed governor fred mishkin joins us as well. charles schwab chief investment strategist, liz ann sonders and herman cain. we need the pulse from main street. that is why herman is here. how americans are coping with the dramatic swings. first go to the floors of cme and new york stock exchange. nicole, dow and and s&p out of correction territory. of course that could change on monday.

>> no doubt. you hit the nail on the head, volatility feels like it is here to stay. we had more than 1000-point swing top to bottom today. we ended up 331 points. we had biggest selloff in points twice this week with over 1000 point-selloff. we had a lot of volatility for the week. dow, nasdaq, s&p, are down 5%. as you noted out of correction territory. 23,955 would have been the correction territory. we've had such an incredible run. look at the vix, the fear index. that jumped to 50 earlier in the week. that is the highest since the "flash crash" in 2015. but today it finished down but had been around 40. so we've seen a lot of volatility there. people that were betting on the downside in very calm market this year got squeezed. those margin calls. take look since the record, the markets this week down 5% across the board for each of the major

averages. since the election about 30% higher for the dow jones industrial average. we'll get you exact calculation. it will take a decent up arrow at least for now. volatility is likely to continue. watch those moving averages, they're great technical indicators. back to you. melissa: such a wild week, nicole, thank you very much. jeff flock in the pits of the cme watching all the action in commodities. jeff, oil ending the week down more than 9 1/2%. it is back below 60 for the first time this year, right? >> exactly and in fact it got below 59 for a time, closing i think it was 59.20 was the close. it got as low as 58.07, i think largely melissa, this was divorced from the stock market. in some ways that is good. oil traders like to trade on fundamentals. baker hughes rig count coming in additional 26 rigs. high oil prices causing producers get involved in the

permian basin and dakotas. these things don't come without any downside but we're holding at 59 at this point, and where we go from here i guess you don't know. the hope going forward prices stablize. melissa. melissa: stablize although we have economic growth going but at the same time we're pumping a lot of oil. so we'll see. jeff, thank you for that. david. david: by the way, gold down three bucks. wasn't a flight to safety there. here with more on all wild market swings, he is the man, harry dent, author of zero hour. harry, i got to give you credit because way back in november when just about everybody in the universe, maybe with the exception of you was a bull, you wrote the following, put the quote up on the screen. we ought to see the market go down by early next year. if it doesn't, then i'm going back to the drawing board. if the market doesn't start crashing by late january or early february, then we are not topping here. but we're saying there is going

to be a crash. early, late january, or early february, harry, you nailed it. >> well you know the most important thing is that this is started. now it hasn't been proven yet because, in our newsletter to our subscribers we've been saying look, unless we break the uptrend line in bottom since early 2016, which we have tested here and broken a little bit, but we're still going around it, once that's broken, the thing is, is that the next crash will be 40% from the top. that is how bubbles burr. if anybody studied bubbles more than me in history or demographics i would love to argue them. david: that is your specialty. let me clear something up. do you think there will be any bounce -- we saw at end of this trading day, of course every trading day is different, we saw a bounce up to 330 points on the

dow. is that bounce up going further in your mind before it goes down 40%? >> yes. it could go to the top of this kind of wedge we've been into with upper trend line and bottom trend line but that would not that be likely. i think that the markets are basically running around this bottom trend line. they have been, they went down to it on tuesday. they went up. they went down to it on thursday yesterday. now they have gone below it today and going back up. i think they're just going around this trend line until they break. i think downside is much more likely but it's possible we could go back up towards, i do not think we'll see a new high here after a parabolic rise-like we've seen above this trend line, i do in the think we'll see new high but we could see a rally, a good bit higher that should happen within the next week or not.

david: would you recommend, harry, would you recommend, if we have another rally say, up until wednesday, would you recommend getting out at, during those rallies or maybe even now? >> yes. and we said the same thing last week. i said, you know, if the s&p goes up to 2720, it's a good place to get out. it went a little higher than that it has been down. the markets do rally in the next week, especially late in the next week i would get out. if they go down, then i would pause and wait to see how high they rally. david: i got to ask you very quickly, harry, how did you know in november that late january, early february would be a crash such as we're having now? >> well, i mean, you know, i look at fundamental trends like demographics, and i look at cycles but i also look at stock market patterns. we've been in this rising wedge. they call it a rising bearish wedge. it has been narrowing saying we

have to have a top here pretty soon or not. that is was projecting into late january. david: finally, very quickly, harry, they gave me a wrap a couple minutes ago, where do you put your money, if you cash out now, where do you put your money. >> i put it into high quality treasury bonds, long term treasury bonds. aaa, corporate bonds. and cash. wait for things to go down because, if this is the major top, i have been projecting for many years, everything is going down except for these safe haven things, including gold. you will be able to buy things at the sale of a lifetime a few years from now. david: harry, i just mentioned the first part of the title of your book, zero hour, subtitle is turn the greatest political and financial upheaval in modern history to your advantage. we hope you just did that for some of our viewers. harry, thank you very much. >> thank you. melissa: bring in today's panel to react. "barron's" senior editor dan

mitchell. james freeman from the "wall street journal" and fox news contributor. carol roth, future file legacy creator, former investment banker. thankthank you for joining us. i will play the other side of harry dent. he predicted a lot of collapses along the way, right? >> the part about bearish rising wedge, sometimes something the schoolyard bully does to. >> come on. come on. >> volatility we've had in the short term. s&p 500, how much are we down year-to-date? couple percent? the real story is earnings. earnings estimates for the s&p 500 are up more than 6% since the beginning of the year. the rise in earnings estimates dwarfs the decline in the stock market. to me that is where the real story is. there is lot of good value still to be found. melissa: james? >> this is good economy. earnings are food. they're beating what whether very high expectations.

you have a good news story right now, whatever your philosophical persuasion. if you like open markets, you have tax cuts and deregulation. if you think, if you're keynesian you want government to be active, much washington did a new spending blowout. i suppose there is something for everyone to be happy about, generally economy is good. companies are doing well. melissa: dan, i don't know i have a little problem with people saying i told you so the entire way up people were saying market is going down. yeah, no kidding. it goes up, it goes down. there you go. what do you think about all this. >> what is the old joke, economists have predict nine out of the last five recessions? if any of us knew what the market would do, we would be billionaires on beach in cayman islands. melissa: we shouldn't be on tv. >> let me say this i show you my age. back in 1987 we had single biggest day in the stock market. there was no recession. no problem whatsoever. the economy continued to grow.

on other hand in 2008, things were completely different. what worries me, is not the real economy i think we have decent fundamentals. i worry that the fed, other 10 trillion banks created a bubble. it doesn't mean. melissa: there has been way too much liquidity out there that has to get mopped up. we've seen it in things like people betting on bitcoin. see it in the art market. all over the place you're seeing things get bid up and people, smart people, look at that say, that's too much money washing around everywhere. has it been soaked up a bit here in this wild week? what do you think, carol? >> i certainly think that it has. i think this is investor getting used to the fact that the fed and central banks aren't going to be as accommodative as they used to be but from a timing standpoint we do have strong growth in the united states.

we have strong going on global basis. if you think where interest rates really need to be historically to affect the stock market it probably is in 3 1/2 to 4%. in terms of fed raises to get there, we have long runway. hopefully we have temporary volatility. and we still have the runway. it could be a wild ride until we get there. melissa: jack, that makes a lot of sense. we would see a lot of up and down. a lot of volatility, the boat rocking back and forth we get back to a more normal economy. i remember some times along the way, jamie dimon, ceo of jpmorgan, says look, we have to get back to normal interest rate environment, whatever that means without central banks around the world micromanaging that one day we'll have to do it. does that mean stocks go down or do they bounce? i mean today i watched it go up 500, up 300. it was all over the place. what do you think? >> i don't think rising interest rates spell doom for stocks. at least up to, you know, like we were saying, i've heard

3 1/2%, 4%. at some point bonds start to become attractive, investors say i rock money here. what we have 16 to 18% growth in corporate earnings. we don't have to have a stock market goes up that far. maybe we get 6, 7% gain in the stock market. that means stocks are cheaper even though they're rising. still mean the stocks out perform bonds. show me where you get 6, 7% without a ski mask an handgun? you have 2.80 on 10-year treasury right now. melissa: james what about that? corporate profits are still going up, even if the cost of borrowing is going up? you have got to think growth is outstripping that, that these tax cuts for corporations are outstripping or outpacing that. what do you think? >> i'm keeping the ski mask and gun just in case i need it. melissa: yeah, yeah. >> the story, i mean if you're going to say what is overpriced, stocks expensive by traditional measures but if you had to say where is a bubble, you with say

european government debt, japanese government debt. it is really the bond market where the valuations i think are tougher to justify. and you look at '80s, '90s a lot of good years for the stock market with interest rates significantly her than they are now. melissa: dan, where do you think the bubble is? >> i would agree with what james just said. if we get a downturn, we will at some point, that will wreak havoc with the european government debt markets. it is probably going to cause the bottom to fall out in states like california and illinois. so, if the dow jones goes down 15%, 20%, whatever is the correction, if governments start defaulting around the world, or go back european fiscal crisis, that is when you got something vaguely akin or similar to the mess we had in 2008. let's hope that doesn't happen. melissa: carol, where do you think the bubble is if anywhere? no i think you mentioned it a little bit before in the alternative asset markets.

because the stock market has been doing so well, that a lot, i'm hearing a lot of people putting very large percentages of their portfolio, usually five or 10% towards alternative assets. i'm hearing much larger portions than that. if anywhere there is true, big bubble to keep eye out for on fringes alternatives which could eventually have the ripple effect back into the regular market. melissa: stand by. we'll bring the panel back in a little bit. david? >> let's see how the dust has settled on the floor of the new york stock exchange. you think of ups, downs, another one of those days when man, oh, man, everything was flying. liz claman has been down there are to the whole thing, host of "countdown to the closing bell." how does it look now, liz? >> they're starting to clean up all the trash on the floor, i can tell you that. it was chaotic earlier. not as chaotic as you might think. david, from being down here all week, there is something i think everybody should glean. that may be that we're in a new

normal as a pertains to stock market movements during times that are volatile. okay. let's show you volatility index. it was the vix that was sort of wasn't canary in coal mine. it was canary flapping its wings, watch out we're starting to see real movement here. you see it start to spike. that is a one-month chart. look over the year. we were incredibly low for quite some time. there was little fear and lots of complacency in the market. boom, the spike to the right hand part of the screen. who got the benefit from that? the algorithmic traders or perhaps algos as they're known. these computerized trading companies jump in. they trade much faster. people pay them. they effectuate trades much more quickly because they're done by computer. this is the volatility picture right now if you look at virtue, virtue is a company that runs these algorithmic machines and they became a direct beneficiary

of this. does opposite what the stock market did. start to bounce around the bottom, but thin it jumped 5 1/2% today alone. it was a big week for virtue. it is evolution. you can't really fight that, david and melissa. looks like the new way. the technology has gotten so fast, so good. that anybody who wants to dip in here has to understand just as they see a stock down i want to buy it at a low price, it may bounce. that is due to preprogrammed trade. it has been a fascinating week. i think it just signals things are starting to change when it comes to putting in trades and seeing what you actually got things for. david: we were talking, medical list saint were talking about before, people making money, people who trade on volatility. they're making a lot of money because there has never been volatility like this, at least not in about six or seven years. so those people are making cash. liz claman, great work today. thank you very much. appreciate it. melissa. melissa: here now, liz ann sonders, charles schwab

vice president, and chief investment strategist. it has been wild times. what is your take? >> our take this had fundamental start to it. in midst december we put out the 2008 outlook, our title and theme was, it is get late. we were referring to the stage in the economic cycle that tend to bring high every inflation, high every wage growth, tighter monetary policy and probably a bit of a change in the landscape for equities, not least being likelihood of a pickup in volatility this is not a huge surprise in terms of what fundamentally started this. you saw hot wage number last friday. melissa: right. >> inflation expectations have gone up. you saw a quick increase in expectations for how many times the fed would raise interest rates although that has come back. technical ex-s ex-ex-exacerbatin unwinding of inverse volatility trades.

what we don't know whether we have gotten through that part of the process. everything is tied to short vol or short volatility has been unwound. but the fundamental story really hasn't changed. we have stronger economy, stronger earnings growth, those are food things but represents late cycle. melissa: late sigh sell in terms of economy. >> doesn't mean peak but late cycle. melissa: because this is where, i mean, i don't know. all along we've been saying we've been waiting for inflation to catch up. it has been a surprise it has taken so long. we've seen this very slow economic expansion. stocks started to really take off especially recently and we saw that wage number which i think, you know there were a lot of people like yourself, well, when we finally see the wages that's when we'll see inflation, that's when the fed will step in and all that kind of stuff but do you really think, do you think the economy is going to contract? you don't think it will grow further from here? >> no no. that's my point.

melissa: okay. >> later in the cycle when you actually get a pickup in growth. melissa: okay. >> later in the cycle when you start to see the potential of overheating. that is what tend to happen. and that causes some of the excess that ultimately leads you into the next contraction. expansions never die of old age. often said they get murdered by excess inflation which leads to excess monetary policy we're clearly not at that peak point yet but we're in those latter stages that can be very healthy for the economy but also has implications for inflation. stock market has decent returns in the environment but unquestionably more volatility. that is what we discussed in our outlook. i think from a fundamental standpoint. came to fruition pretty quickly when we got the wage number. you saw the 10-year yield break through on the upside at 2.8%. melissa: what does that look from that perspective? what do you mean precisely by overheating?

where does that play out? >> i think we'll get over heating. some of the over heating in past economic cycles, comes in the latter stage of the cycle, not the beginning part of the cycle. in terms of the economic outlook we're clearly positiving to a higher trajectory. there is a couple of very important things that happened in the last few months. we closed the output gap which means the economy is now operating above potential. that is first time in this entire expansion. and nominal economic growth, not real or inflation adjusted but overall non-inflation adjusted level of economic growth, gdp is above the unemployment rate. those two things suggest that you're in a more inflationary environment. that we'll likely see the traction in wage growth. so, those were, i think were important shifts that didn't get attention that they deserve. one of the more recent themes i've been expressing, this could be a year, first year in quite some time, where main street feel as bit better than

wall street. melissa: yeah. >> because some things lacking in this offerry are starting to kick in but it has implications not being least volatility as we were smacked with this week for the stock market. melissa: no that is a great point. at this point we see main street benefiting more than wall street. liz ann sonders, terrific as always appreciate your time. >> thank you very much. david: what about the fed factor, joining us on the phone former federal reserve governor fred mishkin. also one of the world's great fed historians. he knows a lot about what the fed does in situations like that. dr. mishkin, thanks for being here. the trigger ha a lot of people have been looking to what caused severe downdraft in the market was the jobs report that showed wage inflation up. would you agree with that? >> yes, i think might have been the trigger, but, i guess to me it is not as gloomy or problematic as people think. david: that's good news. >> first of all the wage growth

numbers are more reliable than eci numbers and they have shown some slow increase but i would also argue that this is not a bad thing. this is actually a good thing. that the biggest problem that central banks are facing in recent years is that they can't get inflation up. inflation has been too low. and that is not a good thing for the economy in the long run. that you really want a stable inflation around the target level. in this case under 2%. david: let me read some of your own words, dr. mishkin, in 2013, five years ago in a piece that was favorable what the fed was doing, you wrote, that the fed needs to clarify the threshold of 2.5% inflation rate no way suggests it is weakening its commitment to the long run inflation target of 2%. it would be dangerous to weaken the commitment to a permanent ratcheting up of inflationary expectations and inflation. is there you were pretty concerned about inflation back then. >> well, no, let be more careful

what i was saying. david: please. >> what i was saying the commitment to keep inflation at 2% is extremely important. david: yes. >> one thing that's really key here is, that when you have a target like this, it is a symmetric target, not a asymmetric target. in other words if you're doing things right, sometimes you will be above and sometimes you will be below. in fact the big problem for central banks, actually may inbe worse for european central banks than for the fed, has been we allowed inflation to stay too long, too low actually for too long and that actually can create a problem where in fact inflation expectations may drift downward from the target. david: dr. mishkin, forgive me jumping in, we have lot to cover little little bit of time, sometimes thed if overreacts. i'm wondering if you fear at all they may come out with this policy statement because of a downturn in the market or something else that could have even worse effect on the market rather than calming it?

>> no. first, the first thing i think is that this increased volatility in the stock market, the fact it has dropped a little bit is not something that is a big problem for the fed. in fact in many ways i think they will see it as positive because one of the concerns was that people were underestimating the amount of risk. of course we saw what happened when that occurred in the run-up to the great recession and financial crisis. so in this case we're actually heading back more to normal. yes there is lot of fluctuations. but these are not out of the ordinary. these are fluctuations you see all the time. what was so remarkable was that the markets were assessing risk as being credibly low. in fact it really wasn't. the markets have woken up. that actually can be a good thing because it may prevent people taking on excessive risk. david: at what point do we shake our heads and say enough? volatility is wild over the last week, you have to admit these swings are historic over the past week, is it going to calm

down over next couple weeks? >> it might, but when you say historic, these are not hugely out of the ordinary. david: okay. >> yes there are some big swings but the problem is that people are looking at points. dow jones moves 1000 points each day, big deal. the real issue is percentage changes. this percentage changes happened before. david: that's right. >> i think people are getting a little bit too worked up here. not to say there hasn't been a big change in market sentiment that we should care about it but this is not case where we have to think the sky is falling, calming words from fred mishkin. he knows. he has experience in the job. thank you very much for being with us, fred. i appreciate it. >> you're very welcome. david: melissa. melissa: predict future by looking to the past. how previous market swings help investors now. we'll talk to the world's premier wall street historian, john borden. that is coming up. >> what is am encouraged to do is buy and americans should be strong and proud and invest in this country. my 401(k) is rocking right

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if you can't afford your medication, astrazeneca may be able to help. david: mark hay hem is whole week, stocks taking a wild ride the whole week, two 1,000-point drops this week, but how does this compare to past fluctuations in the market? our next guest has some insight, wall street husbandtorian john steele gordon. let's go back to 1987. that was a historic date percentage wise. 22% drop on october 19th. we haven't had a drop percentage wise as big as that since. the day before that drop the treasury secretary was talking down the dollar. the drop was on a monday. on the sunday talk shows, jim baker who was then treasury secretary talking town the dollar. a lot of people said that triggered the huge decline. now, we had our current treasury secretary in davos, switzerland, a couple of weeks ago talking down the dollar, or at least he was perceived to be doing that.

he said he was misquoted. could that have done anything to this week's and the previous week's problems? >> it certainly didn't help. but whether it was the trigger or not, i mean, which particular straw broke the camel's back, is the problem here. and, i mean, the market in 1987 had been going down since august, and then it was, had a very bad day on friday before the weekend, then on the 19th it just went totally out of bad, went down 22%, 600 points. david: well, in both that case, 198 7 and our current case, we have economies that are pretty strong. when you have a strong market drop in the context of a pretty strong, good economic growth, does that mean that it's not long-lived, this market drop? >> i'd be very surprised if it was because, you know, the market will always sink with the underlying economy at some point. they can diverge for a while

like they did in 1929, but the, you know, economy is strong, the market is always going to be strong in the long term. and so, and the economy is increasingly strong. people are starting to call it things like robust, and so i think this is a temporary fluke. david: and it's not just the u.s. economy, we should emphasize. we have a tremendous advantage in terms of the tax cut, big corporate tax cut, a deregulation program that's spurring economic growth as well, but the world is benefiting from economic growth right now too. so in this context of world economic growth, your guess is that this is short-lived, this economic -- this market downturn. >> this'll be very short-lived. even in 1987 it was back up in a year and a half, back up to its previous high. in 1929 it took 25 years to get back up to the old high. david: and finally, i know you don't give market predictions necessarily, but if, in fact, this is going to be short-lived, one would assume that it'd be a

good time to get in right now. >> yes, you would, indeed. david: all right. john steele gordon who's seen quite a lot in the stock market over the years. good to see you. >> thank you. melissa: amazon taking aim at fedex and ups, have you heard about this? launching a new service call canned shipping with amazon because they do everything else, so why not ship your packages too? "the wall street journal" reporting that amazon will begin picking up packages from third party merchants and shipping them to consumers. the company plans to roll this out starting in los angeles within the coming weeks. look at fedex and ups trading down with the rest of the market but i'm sure also on the back of amazon coming in to eat their lunch as well, david. david: you knew -- melissa: obvious, yeah. david: well, a massive pile of debt is engulfing our nation, so how do we deal with it? republican congressman tom responds to that coming next. melissa: plus, how are

businesses reacting to the volatility in the stock market? former business owner herman cain gives us his take coming up. ♪ ♪ watery near pugs. for all the people who sneeze around dust. there's flonase sensimist allergy relief. it relieves all your worst symptoms including nasal congestion, which most pills don't. it's more complete allergy relief. and all from a gentle mist you can barely feel. flonase sensimist helps block 6 key inflammatory substances. most pills only block one. and 6 is greater than 1. flonase sensimist.

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because i don't plan to cash it out anytime soon. >> i know there's a lot of volatility in the market, so at this point i think it's just best to try and stay calm. >> what i like about wall street right now is that it's like going to vegas. it's going to be a hit or a miss. so there's nothing to worry about. melissa: just look away. yes, it seems like those americans are pretty even keeled about everything going on in the market. our next guest is someone who hears from everyday americans all the time on his radio program. let's bring in herman cain, former presidential candidate, former ceo of godfather pizza, he is also a fox news contributor. what do you think of those folks you just heard, do they sound like your listeners? >> they sound like my listeners, and here's why: most people are not what you call algorithmic traders. when it moves up a little bit, then they're going to take advantage of it or it moves down a little bit, most of them don't look at it. they look at it long term: so

those people sound like long-term investors like most people with respect to the volatility that's going on in the stock market. i think they are right on track, and that's what i'm hearing from people every day. melissa: no, it's true, i mean, every time we've had one of these big falls if you, you know, got out and locked in those losses, you were so sorry, you know, maybe a year later, whatever it was, that people have been sort of conditioned to you know what's going on, you're watching, but you're trying not to react to it, and that's probably the right thing to do. what do you think is the biggest concern when you talk to regular folks, the vast majority of people in this country? >> i think that their biggest concern is whether or not this correction is going to go below 20,000. remember, a year ago we were at 18,000. so we've had a lot of gains since then, so if we correct 10% this week, 10% next week, we're still way ahead of the game. and i think that the message

that it sends to people that they're responding to is don't panic, don't do anything crazy, just stay calm and stay the course. i think that's the message that most people are starting to understand. melissa: it's also possible they've gotten the feeling of the disconnect between the market and their own pocketbook. i mean, we saw under president obama, you know, the market kept going up and up, and regular people, working americans were falling more and more behind in terms of their take home pay and the regular income. at this point in time right now, everybody's seeing a little more in their paycheck, they're seeing wages go up, and that's part of what the stock market is reacting to. inflation is helping the average person, and they're seeing it in their wages, so they're probably feeling pretty good. hopefully, they remember it's about that instead of about the market necessarily. what do you think? >> i agree with you. during the obama administration, people were sometimes making decisions that may not have been the normal decisions that they would make about certain stocks

because they were trying to make up for the fact that their wages weren't going up, they were having a hard time finding a full-time job if they had some stocks. so i think that maybe the motivation during the obama administration was totally different than the motivation here. melissa: yeah. >> here people are willing to be more patient and wait because they see that the fundamentals of the market are still very strong. melissa: and what do you think about business owners? i mean, i want to -- put your business owner hat back on. what is the economic climate like out there right now? >> the economic climate for business owners is optimism. melissa: yeah. >> and it's optimistic because of the regulatory rollback of 2017, they're optimistic about the tax cuts plan that's in place because they've of already calculated how much cash they're going to have available to expand their business or reward

their employees in 2018 because the new tax plan is the law of the land. so i think it is positive, and it starts with a positive tone from the top. business owners are ecstatic about what's going on right now. melissa: and do they feel secure about the fact, i mean, obviously, regulation has gone down, taxes have gone down, but wages are going up, and there's some commodity inflation in terms of their inputs, we're seeing that out there. that does have to make some people nervous i mean, you know, you were a pizza guy. the cost of fuel, the cost of cheese, the cost of pepperoni, god forbid, has got to stay within reach. >> i would agree. but business owners aren't worried about being able to pay their employees more if they have the money to do so. and is you've already seen this -- and you've already seen this in some of the bonuses that have been presented to people early in this fiscal year. but you're absolutely right. business owners don't worry as much about interest rates that

are going to be stimulated by the federal reserve or interest rates that are going to be passed on by the banks as much as they worry about their ability to grow their business and take care of their employees. megyn: yeah. >> that's not their top concern. melissa: herman cain, thank you. appreciate your time. >> my pleasure. david: if i owned a pizza business, i'd be 350 pounds. i don't know how herman does it. melissa: maybe you get sick of it if you have access to it all the time, i don't know. david: it's being called the neutron debt bomb. remember the neuron bomb? president trump signing the budget bill, but a lot of traders are blaming that budget bill for at least part of the market drop. republican congressman tom reid here next. ♪ ♪

you know, i used to be good at this. then you turn 40 and everything goes. tell me about it. you know, it's made me think, i'm closer to my retirement days than i am my college days. hm. i'm thinking... will i have enough?

should i change something? well, you're asking the right questions. i just want to know, am i gonna be okay? i know people who specialize in "am i going to be okay." i like that. you may need glasses though. yeah. schedule a complimentary goal planning session today with td ameritrade. david: the president signing the bipartisan budget deal earlier this morning tweeting out, quote: without more republicans in congress, we were forced to

increase spending on things we don't like or want in order to finally, after many years of depletion, take care of our military. sadly, we needed some democratic votes for passage, must elect more republicans in 2018 election. here now is republican congressman tom reid, member of the house ways and means committee. well, republicans aren't going to be able to keep the house if the economy goes south as a result of a debt-busting budget. and a lot of people say that's what we have now, congressman. >> well, you know, i'm obviously very concerned about that, that's why i voted against the budget caps deal early this morning in washington. this could be the beginning of the end and this debt crisis going off on top of us. and it's going to impact americans, it's going to impact our economy. that's why getting the debt under control needs to occur, is and we did such great work in regards to tax retom and growing the economy, we need to get the spending house in order. david: do you think the market drop we've been seeing the past

week has some direct relationship to this budget passing? >> i think it in part, obviously, is going to weigh into investors' minds, and when they look at interest rates going up with kind of the unrestrain adding to the debt that we saw with this proposal and the concern that we're not going to get the fiscal house in order on the spending side to match up with the growth. from my perspective, if interest rates go up, i think what you see happening on the market is a natural reflection of the concern that the growing economy with more debt, increased interest rates could potentially hurt the market's chances going forward. david: you know, the mainstream media was shouting fear about a partial government shutdown and how they're so happy they got a deal between democrats and republicans that avoided -- i would have rather had a shutdown than an irresponsible budget deal. at least the shutdown, first of all, it's partial. only affects about 15% of the government. and second is, it doesn't have long-term effects as a two-year

budget deal that's going to send us an extra trillion into debt. >> i would agree. i don't support a shutdown in regards to this. i think we could have done -- david: well, you know, the president earlier said he'd rather have a shutdown, in fact, he said he'd love to have a shutdown as opposed to some bad deal about daca. i would say i'd love to have a shutdown as opposed to a bad deal with regard to irresponsible spending. >> yeah, what i would say is i think we can come together and recognize, if we recognize that this debt crisis is potentially starting to go off on top of us as we speak, let's solve that, because it puts real americans in harm's way. pay for these increase, pay for these spending investments. pay for it on the defense side. we want to stand with our men and women, we can do it. it's harder to work together to solve problems like the deficit and the debt. it's easy to come together to spend taxpayer dollars. david: absolutely. that's the big political dilemma. tom reed, thank you very much. appreciate you coming through a snowstorm, buffalo snowstorm.

[laughter] >> it's beautiful. david: thanks very much. melissa: a roller coaster weeks for markets. -- week for markets. are we in for more next week? our panel will debate it next. mom's got this cold

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david: well, we're bracing for another wild ride. there's no way to get around it, markets ending a dramatic week with stocks making a comeback at the close, but the twists and turns are still spooking investors. what can we expect for next week? let's bring back jack howe, first to you. go ahead. >> market going up because the market rises more often than it falls. wednesday we get fresh inflation numbers, learn a lot about whether we have to fear rising interest rates. wednesday is also valentine's day -- melissa: very important. >> order something today. [laughter]

david: sell out your stock and buy something for your love. dan, what do you think? next week? >> i'm afraid we're going to have fragility for the immediate future. simply stated, it's always fun to have easy money, the artificially low interest rates, that feels great, but the necessary downside to that is that you create bubbles, you create instability, you open the door to inflation. so i worry we have some rough waters ahead of us. david: carol, what do you think? >> yeah. i'm advising everyone to go to the gym, do some sit-ups and crunches, i think volatility is back. david: james? >> i avoid exercise. [laughter] i think -- what i'm -- [laughter] hoping to see next week is a backlash against this big spending bill the president signed today, and hopefully that drives the white house to think about private sector incentives to build infrastructure, not taxpayer money. melissa: yeah. so, james, what do you think -- i mean, now if we have volatility back in the market, up and down? we see economic growth? it's not all bad, right? or do you see something

different, what do you think? >> i think this is a healthy return to a normal economy. it's not driven and supported and nurtured by the federal reserve manipulating the value of our currency. it can be a bumpy ride, but this is progress. it's a more vibrant economy. melissa: jack, what do you think about that, overall level of the stock market in the next year, and the economy, does it continue to grow? >> single-digit, positive. the investment banks love volatilitiment it's the only thing that's been going wrong with the investment bank, i think they make good money in the quarters ahead. melissa: okay. david? david: i just want to give carol a final shot at the economy itself. do you think there's any underlying weakness in this economy, carol? >> the only thing i think is a missed opportunity, david, is the spending given the fact that people are so upset, the investors are so upset about inflation. this is the perfect backdrop for the government to actually stop spending, gives them cover. so i wish -- i think that's the only potential area of weakness

and it's a missed opportunity for them. david: from harry dent and his pessimism to a relatively optimistic panel. jack, carol, dan, james, thank you all. good to see you. melissa: all right. don't listen to the panic. what the wild market swings really mean for you and your money. ♪ copd makes it hard to breathe. so to breathe better, i go with anoro. ♪go your own way copd tries to say, "go this way." i say, "i'll go my own way" with anoro. ♪go your own way ... that work together to significantly improve lung function all day and all night. anoro is not for asthma . it contains a type of medicine that increases risk of death in people with asthma. the risk is unknown in copd. anoro won't replace rescue inhalers for sudden symptoms and should not be used more than once a day.

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>> there's concerns there could be permanent drops in the market like what japan went through but at this point the market went up so quickly that there has to be a correction or a drop to get back down to reality. melissa: okay, a wild ride for markets this week you don't want to miss a moment of next week. she was smart, right? david: she was indeed. well, everybody, i mean let's face it harry dent nailed it two months ago when he said late january early february but he's so pessamistic. i think with an underlying good economy like we have we don't

have to worry all that much but keep it here on fox business. we've got you covered from stem to stern, we're going to be covering all of the market moves next week from after the bell at 4:00 p.m. melissa: for now have a cocktail here comes risk & rewards. liz: the dow finishing an incredibly volatile week it's up closing at a high up 330 points to 24, 190 and it has been a rotten week for your money the worse week for the blue chip, s & p and nasdac in two years so now what, is the market headed for a rebound or another low? the market is in a tug of war between rising interest rate and good corporate profit news, news and the economy is showing accelerating growth in wages, but interest rates are moving higher that 10 year bond yield is expected to climb. there's a lot of drama here, that and derivatives and all that robot trading triggering selling we haven't seen in years , but we've got the information you're going to need