hyg, this is the i shares i box high yield corporate, it's a smoutful, the ticker is hyg, you will oftenit referred to in that way. the reason why it's important it's the biggest exchange traded fund that tracks that high yield or junk bond part of the market, it's got $15 billion in assets and again, it tracks an index of these overall bonds, not specific parts of the bonds curve itself. here is the interesting part, if you take a look at some of the big issuers, where the most heavily weighted holdings are going to be, hca, hospital cooperation of america, it's the most heavily weighted issuer, about 2.5% of the total holdings are of those types of bonds, t-mobile, 2.2% weighting, allied financial 1.7% and frontier communications 1.6%. so, bill, kelly, when it comes to high yield these particular etfs are used by many investors as a proxy or a way to gain access to this high yields market. what's important for some of these trades is that we did not see a huge sign of stress in the marketplace despite the fact we've seen record volumes over the course of the past week in that particula

hyg, lowest level since july of '09., it's another junk etf, trades as a stock, and if you look at that, lowest level since may of '09. contrast that, of course, with what's going on on the actual securities side. these are spreads, thank you to barclays, that's a five-year chart of their high yield, and you can clearly see that it's been spiking up a bit. now, to that end i have porter bogus, pretty much a staple on the floor for many years. so, porter, you're dealing with some of these markets because the group you're with has some positions. can you give me some insight, if you had one word to describe what to pay most attention to in junk right now what would it snb. >> yield and maturity, the individual securities, and -- well, two words, credit quality, and so the problems we see in this space as we talked about is some of the liquidity that everybody has talked about, the concentration. when people descide they don't want to own this stuff. >> when you say yield and maturity, all i could think of is if there's tur

, the i box, the ticker hyg.worth reiterating again. the orange line is the corporate bond investment grade etf. and the white line is junk bonds or the high yield. you can see the big divergence over the last month or so and that has a lot of traders worried. take a look at some of the composition of these particular funds. the reason why it's important is for a lot of the distressed funds or high yield funds throughout, they may be going more on the speculative grade of the spectrum. this particular etf has 90% of the portfolio with a credit rating of b or better. that's the second best if you will approximately in noninvestment grade rating. 50% of the fund is in bb, which is the highest junk bond rating. and 10% of the portfolio is in this really speculative ccc or below. that's composition. if you take a look at the overall sectors represented, yes, energy is important. it's a bigger part of it. it's about 11%. but about half of the funds' holdses are in telecommunications bonds, also consumer-related issues

tim. >> i think hyg association, not anymore. i'm back in. >> dan nathan. >> no matter what the market does tomorrow, i think into the new year and whatever the fed does, i think you want to be u.s. domestic and defensive and that's utilities xlu. >> chairwoman. >> during the break, we had an extensive fight, dan and i. that was about apple. i'm long apple, so i'm going to go with apple. >> guy. >> goldman sachs clearly watching the show. adding visa. letter v. a little late in the game, but welcome aboard. >> i'm melissa lee. thanks for watching. see you back here tomorrow for more "fast." "mad money" starts right now. >> my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. >> hey i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm trying to save you some money. my job is not just to entertain but educate teach and put it into context. call me or

shares of hyg to you, tyler. you might sell them back to me. and nothing happens in the underlying bond market. >> exactly. >> and what we saw on friday is the ratio of that activity, secondary market activity, ben trading to tyler, tyler selling back to ben, was 17 times greater the amount of actual primary market activity. the amount of trading that those etfs, that etf, hyg, did on the primary market where it was actually selling the underlying bonds. so while it dunds sort of sprinkle magical fairy dust over the high-yield asset class and make it more liquid, it provides another avenue to trade a basket of those bonds. >> we have to leave it there. >> supplement that liquidity. >> sorry. we're running a little tight on time. thank you very much. ben johnson with morningstar. it is, if nothing else, gnarly. >>> meanwhile, stocks rallied today in the session, recovering a bit from last week's sell-off as oil prices rebounded slightly. domestic crude fell below $35 a barrel, touching its lowest level since 2008 before bouncing back. once oil r

the s&p is outperforming hyg by a great margin. so what my eyes sees is this and you can draw your lines like that with a break in trend by all accounts, no way to characterize it and a throwback right to the trend line and starting to struggle. you can also draw it with your head and shoulders top. to my eye we have a risk of breaking here, we close at 176 and go to about 160. that would imply about a 7 to 9% move depending on where you get your tradeoff. >> all right. worth a look. mike, what is your take? what is your trade. >> so looking at it fundamentally if all you did is look at their earnings it doesn't look that bad. 17.50 a share. it's one times book value which is not expensive for the financials but it is more expensive than the other stocks. so one of the things that everybody has said that's really bullish about financials is that the rate hike situation would be bullish for them. the problem is we're not expecting really strong rate hikes. if the market is starting to roll over here that's bad for trade and sales re

and hyg has not bought into the extra help from the fed, if you will. i want to look at gold man here relative to the s&p. we know that the s&p is out performing hyg by a great margin, and goldman is under performing in the s&p, so what my eye sees is this. you can draw your lines like that with a breaking trend, by all accounts, no way to characterize it, and a throw back right back to the trend line and starting to struggle. and you can draw it with your head and shoulders top, to my eye, we have a risk of breaking here. we close at 176 and go to about 160. that would imply about a 7% to 9% move depending on where you get your trade off. >> mic, what is your take what is your trade. >> looking at it fundamentally if all you did was look at their earnings, it would not look that bad. something on that order for the year. one times book value that is not historically expensive for the financials but it is more expensive for some of the other stocks that seema was just pointing out. one of the things that everybody say that's is bullish about financials

the hyg has much higher quality paper in it than that fund did. it's important to note, pete, the differences between the two and why all things are not created equal when it companies to high yield. >> true, but when you talk about it, these guys are all talking about different things, is it too late to panic? well, if you look at friday, 54 million shares traded in the hyg. you're going into december, it was trading about 9 million, maybe 8 million per day. december, it's 14 million, 15 million. then friday, 54 million. is that a flush? not so sure it is yet. when you look at the option markets itself, you also are starting to see nearly 300,000 puts trading again today. folks are coming after it. they know how to move this market around. we've seen it time and time again. it starts with liquidity and ill liquidity in the bond market. we've been talking about the ill liquidity for a long time. >> in more than a year, that, according to a new note today from ubs. carl icahn, as many of you know, was on friday, as this high yield meltdown and real

they can use hyg.ld traders who work with banks and hedge funds who are simply saying i do not understand how black rock could manage liquidity when no dealers are willing to commit capital in the underlying bonds. this is a question none of us can get to the bottom of. are you about to reframe the question? >> no. i do not think etf doesn't have to manage the liquidity. how does an etf work? it is very different than a mutual fund. the customer comes in and says i want out here the mutual fund really has one alternative. cell and hand over the cash. that is not how the quiddity works. that is how it could occur. especially in distressed debt for example or something you cannot soak with me like a house. etf, theomes to an market maker has to make a decision. do i take the bonds knowing they will be hard to sell or not? that is not the etf manager's problem. stephanie: whose problem is it? mark: it is the market maker's decision. if it is more expensive for them to do, maybe they will not do it. the re

. >> did junk etfs all bid higher today, hyg close at 79, and jnk a higher. showed was up 70 cents too. >> you saw the picture, peter kraus, is on at 7:30 to talk about this. backing a junk bond fund at avenue capital group hit by heavy redemptions. the credit strategies fund run by the same portfolio manager who launched the new failed third avenue credit fund in 2009. in app interview, he drew distinctions between the two funds saying his fund is diversified with liquid assets in single digits and says reacceptir redemptions will slow down saying he's not sure if it's today or next week e, but arguing people will start putting money back into the market at some point, and as i mentioned, a quick programming note, that mark is going to be our guest host on this very program on friday. we can talk to him all about this and more. >> the fed gathering today for one of the most yearly anticipated meetings of the last decade. steve joinings now with the exclusive results of the cnbc fed survey, and, steve, you teased us yesterday. go ahead. >> just an important s

hyg, a great short. buy puts on that. >> $80. we talked about the hyg the other day. critical support. mike coe was on the show monday talking about the iwm. very interesting. that is starting to pay dividend. that seems to be breaking down once again. >> are you in the global recession camp? if we are in a global recession, does your portfolio no longer work? >> on a day like today, it doesn't work. that's for sure. i feel like there is a lot of improvement in europe. in the companies i have, they have seen really good growth in europe barring the dip we had from the paris incident. i think we are sort of coming out of it. i'm not optimistic on a big china big push, but i think the u.s. is humming along. there are a lot of pockets of strength here. it's not the strongest recovery. short answer, no. i don't think global recession. >> okay. up next, the rumored suitors for yahoo's web business are stacking up. we are playing matchmaking. traders will lay out their picks which companies should shack up with yahoo business. >> biotech stocks doing something they haven't

if you look at hyg, this tracks high-heeled credit, it is dominated by energy and telecommunications,ut two weeks go, about equities in the hyg appeared about 4% under fire , -- under value, but the collapse since then means the equity is about 5% overvalued, so you could say high-yield is playing catch up to underlying equities. alix: goldman sachs is watching investment credit grade. they are looking at the credit spreads and corresponding tutors and finding that investment grade stocks have outperformed credit by about 4% over the last two weeks. 5% dislocation, and this is where the hidden risk is because there are investment grade names within the s&p 500. if they do rollover, that does have a good repercussions. scarlet: and it is not limited to telecom or energy. still ahead, qualcomm rejects calls to split itself into. what does that mean moving forward? ♪ scarlet: breaking news. alix: the red headline saying the u.s. government is said to the plan.fied with antitrust officials are said to push the merger between how and baker hughes. they had agreed to extend the review to to

liz: i was looking at returns for hyg, down 24% over ten years. >> no, that's the den-year decline -- but when did it really start to implode? look at that chart. in the summer. that's when you really had your major downdraft. and that's when some of these funds became obvious that they were overleveraged and too much, you know, were in trouble including this. now, i would point out we do know the sec's looking at this, examining -- we're not saying they're investigating, but when you have a fund guy, i'm not saying anything done's wrong, we've got calls into mr. barse, the pr people from third avenue. when you are the face of the fund on thursday -- liz: and you're fired on saturday -- >> -- what does that? there's something -- liz: disarray. >> there's something weird with that scenario. we have not gotten to the bottom of it. but that's an odd set of circumstances right there. liz: nothing weird about fox business though. you saw the ad in the "wall street journal" and the new york post today. >> oh, that's right. liz: fox business is the fastest growing channel of all cable channe

hyg, makesrse than the s&p's move look like it is starring in comparison.et: it raises the question of contagion versus sentiment. the thing with deutsche bank may not be seeing a path. something that struck my eye last night was the total change in management. this is one of the most fascinating companies i've ever talked about, the first that was able to export a liquefied natural gas. take a look into the bloomberg ferminal for a chart option cheniere. the ceo wanted to build an import terminal, got the funding, then changed his mind. he wants to be in export terminal. raise funds. then he had not made a profit. highest-paid ceo the united states in 2013, then he got fired. carl icahn has a stake in cheniere. it is a very dramatic reversal for company that was truly a pioneer, and the first to do it. scarlet: maybe a little bit ahead of its time, if you want to look at it one way. it will be the stuff of movies and tv shows. alix: that's true. fascinating story. this wednesday, we will find out if the fed will raise a rates for the first time since 2006.

the hyg weakness doesn't surprise me. you talk about the huge buying in that etf. now i think we are in the middle of the range. it's 2050 level. we do take 2020 and see what happens. 2020 on the down side is your support. 2105 on the up side. >> the dollar hit a two-week high. >> one thing i think the market missed yesterday was a change in the fed language where they were still focused on the unemployment report, but they also mentioned they are going to look at financial market indicators and international development. we came in this morning, what did we see? we saw the dollar stronger, chinese yuan weaker and oil weaker. now you have to say maybe if oil keeps going lower, the fed is one and done. what does that do to the yield curve? it flattens out. then it starts to accelerate. for me, i think we are looking at probably a 5% to 10% sell-off here. >> yesterday he said the yield curve would be flattening. we saw that start in today's session. >> implicitly what he is describing is dovish. it's a fed that gets out of the way because the world is a scary place.

stephanie: what does hyg and ja and k due to the index?s only big institutions, so it is a way for retail to play high-yield investment. it is liquid and you can trading on the penny market. it has held up very well. eds are going to capture market share, just as they have in the past and other segments of the market from the mutual fund segment. the big picture is that mutual offering daily liquidity, so they have to be very strongly managed with cash balances, lines of credit, good, quality names that you can trade in the marketplace when you need to sell, as opposed to what 3rd avenue was doing, which was put 90% of their positions into non-rated and triple c investments, which we all know is not appropriate. does a bad actor hurt all of you? people do not like the financial industry. what third avenue did, does it hurt you? bruce: it will not hurt us because we are not a mutual fund. stephanie: do people on the street differentiate? bruce: other mutual funds are being tested now, and we will be able to stand the test of time. there are

the ticker is hyg. it's the biggest fund of its kind in the u.s. market and it has around $15 billion in net assets. it had a record trading volume amount last week with it's biggest trading day ever just on last friday alone. according to black rock which manages the fund, around $9.8 billion occurred last week. 4.3 billion of that was just on friday. but the trading activity didn't result in massive sales of underlying bond assets for the net redemptions from the fund. black rock says that only net $560 million of redemptions came as a result of the heavy trading. as for the types of bonds that make up the fund, energy plays 11% of the total portfolio but it's not the biggest part. around half the funds assets are communications, and those types of stocks. so as the story continues to develop and high yield debt junk bond markets, if you will, the extreme trader funds in the space will going to continue to garner a lot of attention because these funds are a way a lot of investors get exposure to junk bonds instead of buying the individual bonds t

if you look at the hyg here in terms of market movers, both of them are behaving themselves, and that's certainly a good sign. in terms of dow movers here, exxonmobil, up more than 6% so far this week. another good move today. oil was to the down side. apple -- oil on the up side. apple, of course, dialogue semiconductor. it's a british firm that makes chips for apple. they lower guidance about maybe lower iphone sales. that's down. 3m, they came out and cut their forecast, and they've done this before. this early in the we're, this is how tough industrials are. in august they were talking about 773, not 793 for the year. october they cut into 760 to 775. now 3m's number for the year is 755. that's a substantial cut. this is part of the problem. all the big industrials are having a slower global growth, so it's not just 334 to the down side today. other names like caterpillar and deere and rockwell and eaton and illinois tool works, those stocks, put them up, they're all to the down side today as well. in terms of cross currents. there you see the stocks to the down side in the industri

lqd and hyg they were really popular to talk about a while ago.s the investment great lqd that yesterday made a new low going back to 2013. the hyg made it's lee on december 14th but it's in the neighborhood we haven't seen since 2009. >> thank you very much. they say that the wheels of time stop for no one, but a famous indoor ferris wheel in times square unfortunately does. courtney reagan live in times square with that story. courtney? >> well, brian, the toys "r" us in times square is closing its doors for the last time at 6:00 today. i'll tell you why. you have to stick around. it's coming up on "power lunch." >>> welcome back to "power lunch." i'm melissa lee. seaworld filing a lawsuit against the state of california to challenge a ruling by a state commission that bans breeding of captive orcas. fairchild acknowledging it received an offer by an unnamed bidder to buy all shares for $21.70 per share. and big energy names getting hit again today as u.s. crude fell more than 2.5% in trading. let's get to seema mody for a market flash. >>> shar

mean a spring loaded action in the energy part of the complex which has been so depressed so maybe hyg is not such a bad idea? >> i'm sorry? >> maybe hyg or an etf that follows the index isn't such a bad idea because you're basically saying that the worst is over for oil. >> well, when it comes to investing in the high yield market, we have active management strategies, and even in our strategies that allow -- that are unconstrained an lioud to go anywhere they are finding value in the high yield space. you do due diligence. >> let me jump in. some people say oil is going up, others say it might go down. others don't know where it's going. the third people are probably the only ones being honest with themselves. if oil stays at 40 bucks a barrel for three years, we are going to have a major high yield crisis. period. >> what you will see is the negative impact it's had on earnings so far will begin to dissipate. it will be less of an incremental factor. also the lag effect of low oil prices will exert a positive influence on other aspects of the economy, other sectors that are net ener

i think the hyg pushes down toward 80 and reaches it. it's not meant for the s&p.t some point it will matter but i think the line-up is this. i think the s&p trades up to the may high 2135 as high yield trades lower and we'll see what gives at that point. >> the default rate in the month of november also increased up 2.7% as of the end of october compared to 2.5% from september. so we're seeing that also get worse. >> one third of the herd is wounded and will die and this will have some impact. to me this is contained. i'm not going to tell you that i don't think there's bigger credit issues that could come on the back of liquidity. but this is leveraged balanced sheets. this does not even closely resemble 2008 and 9. people will stick to the low end of the curve and be buying spread product. that's going to happen. >> i don't think the equity can rally until we see a forced kind of go out of business effect with a lot of these really under leveraged companies or highly leveraged to the hills. once you start to see that. >> we need bankruptcies. >> that's when you

but pete talked about the put in the hyg. i don't think it is over. we've bounced back above 80 which another critical level. another leg down doesn't bode well for what we are talking about. >>> ge hitting the highest levels so why are savvy traders betting against the stock. your watching "fast money" on cnbc, first in business worldwide. back after this. >>> welcome back to "fast money." solar stocks surging double-digits today on news that congress is reaching an agreement on a government spending bill that could extend tax credits for u.s. solar projects. so does this give new life to solar stocks. they have extended it to 2021. so that is that visibility toward the sector. >> i would be careful of the one with high equity. we saw it in solar city and sun edison. and sun power hasn't gotten too far ahead and you could rest on its valuation with a long-term view so i wouldn't chase the ones with 25% up today. >> what about the ones up year-to-date. >> i think sun power is right there. i think today -- he stepped on my toes. it is okay. he doesn't

jnk and hyg, both down about 2-3%. we've got traders at the new york stock exchange and the cme.ant to start with steven guilfoyle. the bond situation is worrisome because this is something that back in july carl icahn warned people about saying the fed's making people take too many risks and going into junk bonds. is that at work with this third avenue management fund that's trying to liquidate what is now just a $700 million fund, had been two billion, steven? >> oh, this is a big deal. just -- the week ending on wednesday we saw $350 billion worth of retail dollars coming out of high yield funds, and that was wednesday. i'm sure that number's a lot larger now. yes, you can blame oil, but the high yield situation is just as big a deal, and you can throw in the emerging markets. there are fundamental reasons for the selloff on wall street today. liz: well, exactly. what should investors be doing? trevor, tell me if you thinkthit into next week with the concerns we have about what the fed is going to do, trent? >> i think what we're seeing today is going to be indicative of where

so about half of the total hyg, that is the etfs assets are not in energy, but just in telecon on consumered companies. so between junk bonds and investment rating, they track higher for awhile here, but now the divergence is getting big. so how much of the action is driven by fundamental views on high yield or junk bonds and how much it driven by mechanics in the market. so simon, there are a lot of questions out there and basically, in many ways, about the credit quality and whether or not this is a crisis type of situation. many fund managers talk to me and say this is not a driesz, but just indicative of the high yield market. >> let's bring in dan, u.s. bank wealth management, how is the market today from your h perspective? >> we respectfully disagree with some of the markets just made. we think this market on the downside has further room to run and here is two fundamental reasons. one, in a lot of cases these funds are down 6% or more and that will accelerate tax loss selling. as reviews for off setting capital gains are done, you have an area say energy stocks that clients will go

you can see hyg showing the yield on credit market. case, are wee waiting for u.s. stocks to plunge? john: earnings out there have been fairly strong. that is what we have been talking about. valuations are not that much higher than we were at the start of 2015. in the bond market, especially in the high-yield area, you have to know your credits. spreads are waiting so that valuebe a little bit more and the place to be. but i think you have to know your -- where you are investing, not only in bonds, but also in stocks. the overall indexes may struggle, but there has to be performers inside their bank that will do just fine. that is the key to making some investment moves right now. scarlet: stocks like facebook, google. in the corporate space, talk about investment grade and high-yield at the stage of the cycle. john: we stole a corporate's. we -- we still really like corporate's. really like may be too strong. one of our great managers likes to say, you buy a bond, get it straight, and at the end of the day, you get your principal back. d is goinging the bon to be

remember hyg, high yield junk etf and all the issues related to the fed? here is a month to date.s turned up a bit but when you look at it in the context of the last time we were in this neighborhood, summer of '09, the little bounce gets lost. maybe we should revisit as we get into 2016 and we looked at a lot of currencies from emerging markets. how about a year-to-date of the dollar to indian rupee. the dollar has given up some ground as all the issues for now have melted in a light volume holiday trade. mandy, back to you. >> thank you very much, ricky. happy holidays to you. time for the power pitch where one entrepreneur has only 60 seconds to try to convince a panel of experts her business or his business has what it takes to be the next big thing. let's have a listen. >> i'm lisa, the founder of hetexted. we're pioneering a situation advice business. we believe that personalized advice is the future of web, mobile, and media. now more than ever wee all look for answers that is specific to us individually. the millennials, hetexted answers questions they care about deeply. f

mutual funds and etfs are a small part and from the etf perspective particularly like hyg it's very liquid, it traded 13 times in past week than from the redemptions. if you wanted to get out, you were able to get out. unfortunately if you were in part of the third avenue fund you were not able to do so. >> right. we also saw plenty of people interested in buying what they perceived as a good opportunity in the funds if it gets to the point where the sell-off worsens or the bid isn't there, then what? >> well, we think that obviously over time it's going to stabilize. you know, there's still a market that's out there. this still offers a compelling yield versus a still lower exposure from the ten year treasury. you want to make it's a good part of your portfolio and you want to understand if it's in bb or c, make sure you're comfortable with your portfolio. >> thank you for joining us. >>> it's the last republican presidential debate of the year and tensions between donald trump and ted cruz are heating up. details next. >>> but first, are drones about to be downed? new faa rules are spark

today hyg and jnk both sharply higher. >> so what should you expect from the markets between now and 2:00 p.m. sharp tomorrow? let's bring in allen valdez. he is a senior partner at silver bear capital. let's have a look at what is going on at the nyse. what do you expect the trading to be? how do you explain today's big move up in anticipation of what? >> i think we saw oil under pressure. down almost 10% over the last few trading days. we're seeing a bounce back in that certainly. and the other sector that's going to benefit from higher rate environment is financials. and those are the two leaders that we've seen today. so we're expecting a rate increase and the two sectors that are going to benefit the most are responding. >> allen sshgts market goi, is o be relieved if there is a rate increase? >> no doubt about it. i think the worst thing that could happen tomorrow is that they don't raise rates. that will send a message to the traders that, you know what? maybe the economy is much worse than we thought it was. i think you'll see a rate and it will be a lot of the minds for trad

hyg is another etf. that one hitting its lowest level since 2011. obviously the concerns are for oil and the broader ripple effects heading into the fed meeting next week. >> whether you want to go into etf's in an environment where they're shutting other funds for lack of liquidity. what do i know? anyway, let's send it over to squawk alley last one of the week. take it away, guys. >> thanks very much, guys. it is 8:00 p.m. at alibaba headquarters. it's 11:00 a.m. on wall street. squawk alley is live. ♪ >> let's start with the markets. the stocks, as you can see, have been lower all morning long. dow down

look at the more aggressive hyg for the junk, getting close to levels we haven't seen since 2011.ay attention to those two etfs. mandy, tyler, back to you. >> rick, thank you very much. and we're going track this sell-off for you on wall street. as you see about a 1% slide. the dow and s&p giving back half of those big gains from friday. plus, many call it the problem that will start the next financial crisis, a crisis that could do a lot of damage to anyone holding equities. we'll tell what you it is and what may happen coming up. so what's your news? i got a job! i'll be programming at ge. oh i got a job too, at zazzies. (friends gasp) the app where you put fruit hats on animals? i love that! guys, i'll be writing code that helps machines communicate. (interrupting) i just zazzied you. (phone vibrates) look at it! (friends giggle) i can do dogs, hamsters, guinea pigs... you name it. i'm going to transform the way the world works. (proudly) i programmed that hat. and i can do casaba melons. i'll be helping turbines power cities. i put a turbine on a cat. (friends ooh and ahh) i c

high yield also moved down throughout the day as oil was moving down, high yield moved down today, hyg at the lows of the day. >> thank you, robert. going out with a decline of 250 points. folks from vwx technology ringing the bell at the billboard, at the nasdaq its israel bond. it's kelly evans with the second hour of the "closing bell." see you tomorrow, kell. >> thank you, bill. welcome to the "closing bell," everybody, i'm kelly evans. yes, live here today at the yale ceo summit at the waldorf astoria. let's begin with how we're finishing the day on wall street. red arrows giving up yesterday's relief rally after the federal reserve raised interest rates for the first time in almost nine years. today a very different picture. we had declines of more than 200 points or so on the dow, the slooep and the nasdaq. coming up we're going to hear from famous short seller jim chanos on yesterdays fed moves. there's the dow settling down 252 points. let's get to today's channel. we have our own mike santoli and cnbc contributor carol roth and also for more on today's market action "fast mon

. >> it's an interesting day to talk about high yield given the hyg hit a new 52 week low in today'son. i'm wondering what you anticipate here happening. is this a canary in the coal mine? traditionally what's gone on in high yield has been a pretty good indicator of what will happen in the markets. >> high yield is a bit of a complicated story. it's bifurcated. you've got anything that's in the commodities complex under a lot of pressure, a lot of distress. we've avoided that segment of the market and focused on other industries and spreads have widened in sympathy a bit but those bonds have done quite well year to date. that said when we think about over the course of the next year what do we think that the s&p will do given these really high multiples, i think stocks will do okay, but there are a lot of valuation head winds that i think will only increase as rates start to move higher. when you look at high yield i think it's been a year of adjustment, particularly in high yield ex commodities as those prices have fallen a bit. the risk reward is a lot more attractive as long as y

and that's important in this example because when somebody goes and makes a trade in the high yield hygtf, there's a ladle of a security that has to be put in or needs to be purchased in the market, but they can use two ladles. they have a special purpose vehicle where they can use their inventory or they could actually go to the marketplace if there really was a marketplace. in a perfect world where computer trading was liquid, they could find those securities, but the issue is when things dry up because much of the high yield sector is buy and hold to get that extra return which is what the fed did by design, what we all worry about is if you're nervous about the liquidity or how many 32nds in treasury it is takes to satisfy an order, you have to go to multiple levels beyond that when you start getting in the high yield and junk. remember, when you trade futures, it's generic. it's like milk, like white paint. but in the junk market, it's kind of like real estate. every security is kind of unique. >> important information and a great lesson, as always. rick santelli, thank you, sir. a

stephanie: j nk and hyg are both down. we are only seven minutes into trading. today. that is a very -- a very big move. yes: we look at a daily performance, not the long-term performance. a terrible had performance since 2007. active in pastre indices. stephanie: we see retelling investors want to get out of high-yield. is this the day, the week when we will see liquidity get tested in high-yield etfs? -- you have underlined assets that are now liquid and a product that is marketed super liquid. down 1% last ats week also. they tend to be more volatile. that is one of the concerns we .ave on the fed, we still think they will end up hiking rates next week. but we think the significance is a lot less than others do. the fed has been in a tiny cycle for 18 months. tapering is a form of fighting. we may be have to to two thirds through that cycle. this argument had before. everything is already priced in. stairstep digital rise. four quarters from now, does this dynamic change? guest: everybody always talks about what is priced in. i don't expect it to be a smooth