leslie picker joins us from new york. how much money are weab talking t when you talk about the mutual outflows in recent weeks and mont? >> reporter: mutual outflows in billion is over $12 last week over the course of 24 months. we're lookingt ove $100 billion, bill. so this is pretty signific24t. weeks for those who don't want to do the math, that's about six months worth of ioutflows, which pretty significant when you think about what that means for the mutual fund industry as well as what it means for the equity market. >> so-cled passi investing, index funds, exchange traded fund they become very popular at the expense of actively managed funds wavre you human beings buying and selling stocks. so when you see -- anden they'v ery popular during a bull market for the last decade. what happens when the market heads lower. what is the expect for active versus passive investing? >> that's a big question that a lot of people are considering, including the federal what does all of this move towards pass sieve investing mean

leslie picker has a few tips. >> there is one keyo rule tax loss selling. urd that is if you are disposing of one sy for tax purposes you cannot buy a substantially identical security within 30 days before or after the transaction. this is called the wash sale rule. but what happens if an investor still likes their losing he positions for long-term? well, bob willen, a tax adviser to institutional investors shared some legal tricks to maintain exposure to certain securities. one way to this, h says, is through investment holding companies. for example, if an investor wants to sell alibabahi be, plumme%d about year to date he orhe can buy something called altaba a result of spin i don't have that is a holding company for alibaba shares. another of his ideas, stock lsed mergers. investors have bek locking losses in disney shares and buying up the 21st century fox. the two signed a deal to merge so the shares will be combined anyway. lastly, any etfs. of an i vestor willlate the wash sale rule if he or shea bias different e tracking the same index. but what he

cnbc's leslie picker joins me.e were talking about earlier some of the things that have gone into this on what is very slow volume day on the dow but a lot of people are going to be looking at their 401(k)s and saying, can i read anything into this? is the worst over? >> they'll be happy today. like you said about a minute and a half until the close today but the biggest news on wall street is that the dow surging by more than 1,000 points. whether it will close at that level remains to be seen. a lot can happen in a minute on wall street, but all three indexes, dow, s&p, nasdaq, on track for their best day in seven years. >> are there particular sectors that were leading this charge? >> absolutely. we saw some really nice moves in energy. those were helped -- propelled higher by oil prices today which saw their best days in two years. wti and brent up by more than 8% each today. also early retail numbers showing some really strong shopping habits from the holiday season, helping push up a lot of names, including a

remaining near the lowest level in 18 months morgan, back to you. >> leslie picker, thank you. crude is up fractionally now. >>> still to come, tesla naming two new independent directors to the board, part of a huge sec settlement details next. >>> after a wild week for tech, why our next guest says he is digging into apple for 2019. >>> and why steve odland says pleajuchu.s. is experiencing a atu. the dow is down 37 pace for the worst month ever. one analyst says apple will be the best performing in 2019. welcome to you both. gene, this is your call on apple. obviously it has been a bruising period for the stock, it is a beaten down valuation. is this a painful transition to the next phase of the apple story? before you tell me why you're bullish, how did we get to this level? >> we got there because people are still focused on iphone units and eliminating some disclosures, spook investors, and after that a chorus of negative data points out of asia on production of iphones those two pushed us to where we're at >> so why is that the story line and the market perspective going

cnbc's leslie picker follows the markets very closely for cnbc. leslie, where are we now? and what do we know about the impetus responsible here for this latest drop? >> hi, craig, that's right. some of the red you're seeing on the screen is just pressure related to yesterday's rise. investors taking some money off the table, crystalizing those gains as we get towards the end of the year. but also in terms of headlines, the worried de jure du jour of the moment is the trade war that's continue between the u.s. and china. reuters reporting president donald trump is considering an executive order that would ban american companies from using equipment built by chinese companies huawei and zte. reuters citing three people familiar with the matter in its report and, of course, investors pay attention to all of these trade-related headlines as it relates to the tension between the two countries, specifically what that means for global growth that they're, of course, buying companies and stocks that would be exposed to that kind of worry. >> is this a sign of what we can expect i

for "nightlbusiness report," leslie picker. >> delta revenue may lose altitude. that's where we begin the market focus. investors are growing concern the slowing global economies will limit the airline but the ceo says he expects the current strong demand to continue into 2019. >> this will be the fourth year in a row this year we make $5 billionit of pr returning 14% return on capital back to the investors. and it's going to stand the tt of time. who can do that through the cycle? delta ha a great lead. >> apparently the comments were not enough for investors sending 53.55.ck lower by 5% to >>> sienna reported the strongest earning in sales growth in years. he networking systems company expects 20% profit growth next year. the board alsod authori a new buyback program of up $500 million. and shares rose more than 8% to $34.91. >>> meanwhile underharmer ceo is company e case for the turn around. yesterday we told you the add leisure apparel maker cut financial targets. today the ceo says he has a plan to regain momentum, especially in the north american market. >

leslie picker has more on what's moving oil today leslie >> that's right., big moves in crude today, helping to recruit at least a portion of the losses that they have had over the last few months wti surging 8.5% to settle at 4613 that's its best day in two years. brent similar moves today to the upside, gaining about 8% to 5449 also its best day in two years now, this is largely a by-product of today's risk-on environment that bob was just talking about, the same optimism that's moving the equity markets higher trickling into the energy markets. you can see it based on those numbers on the screen. now, today's gains do come after wti slid to an 18-month low on christmas eve. it is still in bear market territory today despite the surge, and the s&p energy sector is looking like it could also snap a seven-day losing streaks but that group's performance this month is still the worst in more than a decade guys >> leslie, thank you very much for that now, uncertainty in washington is another factor behind the recent market volatility as president trump continu

leslie. picker explai >> coinciding with the holiday season is what's called the horvatining season. when investors look for losing positioning in the portfolio and gll or harvest them to reduce taxes on capitalns from other investments. it's called tax selling or taxl selling a common phenomenon at the end of every year but particularly this year because the are substantial losses to harvest, even with yesterday's rally west december'srf mance in the s&p has been abysmal. it's difficult to know what portion of the strl jf can be uted to the tax loss selling but it feeds on itself. the more people selling in the market for tax purposes, the more exacerbated the market declines become. experts say i d an year this is a more popular tactic giving little excuse tock get s with tax bills for capital gains which is about 23.8%. one adviser says investors should be paying as mnth atn to tax plansing at the end of theier as they are to day to day market swings. >> remember, the key to all tax planning is a

leslie picker joining us now with a look at how hedge funds faired this year let me guess, not well.t that hedge fund returns have lagged this year. but what were some of the crowded trades responsible for that underperformance in well cnbc surveyed hedge fund managers to find out a major problem for some was nxp pmt hedge funds were long that stock as a so-called merge he were ash traj trade. betted by the takeover of the equal come closing but the the deal broke apart after failing to get chinese approval and that sent the shares plummeting and haven't recovered. shorting volatility was another popular trade. the markets had been calm for last few years but when the vix spiked in february it burned many of the investors who bet against it crypto, of course, was another big wrong way trade this year wsh especially for the flurry of cryptohedge funds that launched after bitcoin sky rocketed to 20,000 last december today's the world's best known cryptocurrentky is trading one fifth of that price. hedge funds had been shorting 10-year treasuries, betting prices would decline and yields

. >> leslie picker, thank you very much >>> welcome back to "squawk on the street."th carl quintinilla and mike santoli at post 9 of the new york stock exchange an hour into the trading session and that didn't last long. stocks were positive most of the past hour, now the dow is down 60 points. s&p 500 down a quarter percent the nasdaq is down a fourth of 1% oil gains are slipping away. groups like energy, technology, and materials that are leading us lower within the s&p. we have defensive names, utilities, real estate and consumer staples positive. we are watching the global market picture as well global stocks feeling the pain in 2018. japan officially ending its 2018 with a 12% decline for the year. first annual loss since 2011 this ends the ecb global economic forecast slowdown next year will these markets lead a rebound in 2019? what will their impact be on the u.s. joining us is charles dallara, partners group chairman of the americas and former managing director of the institute for international finance. nice to check in with you, good to see you. >> good to

i'm leslie picker. this is "futures now."d up nearly 2% and hitting its highest level since june our own jim cramer telling investors to buy gold on "mad money" last night. did you see the yellow metal heading higher >> you're right. with all the equities selling off, i don't know if i'm on page with jim due to the fact we should see gold higher we've seen a debauchery in stocks the dollar is in a good. it's not moving up too quickly i think we will see gold remaing i don't know how much higher it will get above 1,300 >> what levels are you looking at >> well, we hit 1268.30. the entire move for the year the high for this year happens to be the two-year high. the low happens to be the three-year low a pretty all encompassing move if we get up there, that 1,300 is technically done deal we broke out of a horizontal channel and pulled back. >> all right thank you, bob and jeff. for more futures, be sure to tune in to our live show next thursday at 1:00 p.m. eastern on cnbc.com cnbc.com halftime will be right back. had a coach in

if you have stock market winners now may be the time to sell some losers leslie picker explains >> itter intuitive to sell losing stocks. here's how it works. people will sell stocks at a loss to make a dent in any capital gains earned from other investments this year. capital gains are taxed at 23.8%. these savings can be significant for investors. tax loss selling as it is known is likely feeding some of the recent market downturn, experts say. it's difficult to know the extent to which this tax loss selling is having an effect. but the more people are sell nothing this market for tax purposes, the more exacerbated the market declines. the one caveat is the so-called wash sale rule which prohibits buying the same or similar security within 30 days before or after that tax loss sale. the deadline to harvest losses for 2018 is december 31st. the question is whether that will put additional pressure on the market in the last three trading days i guess now two and a half trading days >> leslie, thank you. >>> what are some more ways to save on your tax bill? here with some tips is the d

leslie picker.ssion lows, giving back a sizable chunk of wall street's biggest one day rally since 2009 all 11 sectors are trading in negative territory let's focus on one of the notable underperformers. energy stocks. it snapped a seven day losing streak yesterday but down sharply again today as oil prices slip back to 18 month lows amid renewed concerns over supply among those leading to the down side, apache, marathon, and halliburton. despite the rally today, all 30 stocks in theenergy sector are trading in bear market territory or worse the sector as a whole is also the worst performing group during a tur bulent month of december >> thank you for that, leslie picker sara, what's coming up on "closing bell? >> we're talking to scott blatt from delphi asset management the single reason he says the market is selling off and where he sees value. noted buffett disciple lot of people are buzzing about the confidence number from the board. and the expectations component that saw a drop. one, is it sel

leslie picker live inside the dan bury fair mall body armor at the ready.ou have a security team no doubt with you to handle the risch. >> i pulled out all the stops. procrastinators beware today is the last day to get that christmas shopping done but if you plan to attend a mall like this one you're not going to be alone. we'll tell you how many people wait until the last minute to eit those items checked off thr shopping lists that's coming up when "worldwide exchange" returns. in't easy. 12 hours? 20 dogs? where's your belly rubs? after a day of chasing dogs you shouldn't have to chase down payments. (vo) send invoices and accept payments to get paid twice as fast. (danny) it's time to get yours! (vo) quickbooks. backing you. ♪ there's no place likargh!e ♪ i'm trying... ♪ yippiekiyay. ♪ mom. ♪ >>> it is raining again. we haven't had enough rain in the new york area. seems like it has rained every day. welcome to seattle it's down to your final few hours to panic shop for gifts. with recent concern about the economy going forward, could we see recent sign

leslie picker has some tax tips and tricks >> there's one key rule, if you're disposing one securityou can't buy a substantially identical security within 30 days before or after the transaction. this is known as the wash sale rule but what happens if you still like those positions for the long term? well, bob wilins, a tax adviser shared some legal tricks to maintain exposure to stocks you might like without losing the deduction. first he liked alibaba shares, the e-commerce giant has plummeted 20% year to date so if you want to sell those for tax losses, wilin says you can buy ataba. you still get exposure to the chinese e-commerce giant there and others are stock based mergers. investors have been locking in the disney stocks and buying the 21st century fox and lastly, any etf, you can buy the underlying holdings if you want that market exposure although you cannot buy all of them because that would imply significantly similar. he would not advise buying more than 450 stocks out of the 500 in the s&p for example guys >> 505 i learned >> there you go. >> i think we had day recently

. >>> welcome back leslie picker is live in half moon bay, jpmorgan's revolution conference where sheat down with t rowe price on equity growth. >> we sat down with the man that runs the horizons fund that invests in small caps. he is known as a pioneer of private and public companies we have his thoughts on the market, especially the tech sector where he say he is being more selective >> we believe the dominant platform internet companies, microsoft, google, facebook, amazon, netflix, apple, are still very dominant and significant innovation is still happening in those companies it is hard to compete with them head on in what they do. as someone that invests in emerging growth, that limits things the areas of the market where we had strong growth like corporate technology, we have seen significant multiple inflation, so we're being more selective in that area of the portfolio >> in terms of specific companies that he likes, he names spotify, twilio, toast and spoke about recent volatility in the public markets, when he expects that to spill over into the private markets. he knows the

december on record contributing to recent year end declines is that phenomenon we call taxed selling leslie pickert hq to talk about it. >> that is more popular in markets like this one where there are significant losses to be harvested for those that have never done it, it may sound counter intuitive, selling at a loss on purpose. but those losses can help put a dent in capital gains earned from other investments sold earlier this year. by doing this, an investor can minimize or eliminate his or her capital gains tax bill which for most was 23.8% tech selling is common at the end of any year, but even more so this year, experts say, because of magnitude and breadth of the recent downturn it is difficult to know what portion of market selloff is actually attributed to tax selling, but it feeds on it self the more people that sell into the market for tax purposes, the more exacerbated the market declines become. i have spoken to advisers to institutional investors and retail investors that say both types have been actively doing the tax selling for weeks now. the one caveat is called a wash sale ru

leslie picker. >> after some shocks of some economic winter, the markets will enjoy an indian summer respite before the onset of looming recession in 2020. scott minerd joins us on the phone to explain the call. who is more bearish, you or jeffrey gundlach, you bond kings and princes have a lot of doom and gloom when it comes to the economic outlook right now explain your call. >> i mean, look, i think it's pretty apparent by now that everybody is awakened to the fact that we have way too much leverage in the system, and this recent correct that we've gotten in stocks has been associated with a pretty hard selloff in the bond market. you know, we've seen it especially in junk bonds and bank loans, but we also have seen it in investment grade credit, and that's the prelude that's the achilles' heel of this expansion, that credit expansion has been too rapid companies are overlevered and we sit at record high leverage levels in corporate america based on percent of gdp or free cash flow or any measure that you want to look at, so ultimately any kind of economic slowdown is going to spi

lessly pi-- leslie picker joini me. >> that bit of use about jay powell's news has jolted the markets of the up side. moments ago before that it's been a volatile morning for both the dow and s&p. now both indexes are trading higher. the nad zach in tsdaq in the gr. uncertainty in washington has been overtaking the markets over the last few days. specifically trump's relationship with powell and his job over the idea that the federal reserve has been raising interest rates in this economy. whether the economy is ready for it. trump has pointed to the rising interest rates as cause for the recent market selloff. the selloff has also been exacerbated by recent tweets from the president criticizing the fed's moves. >> and then by the way, there's that little trade war that appears to be on again off again. so do we surmise at this point leslie that since jerome powell's job has been guaranteed for now, do we think that's going to mean a consistent up swing in the markets into 2019 or is that wishful thinking? >> it will help. the key will depend upon what happens on twitter and what the

is causing the whiplash among in s investors, and here to try to the make sense of it is cnbc's leslie picker, and why are we seeing this fluctuation? >> whiplash is the perfect word to describe the markets this year. it is not that many trading over the holiday week, and the bid asks that you are seeing in the market, you are seeing a lot of selling pressure today as a look at the di mminished gainers tha are leading the way. all 30 stocks in the dow declining as well. and with the news out of confidence in american households by the conference board which is showing consumer confidence showing the decline in descember in more than three years which is a feeding effect into the market as well where if consumers are not feeling confident about their standing, they won't go out to spend, and h help to boosts companies that are investors are trading and all of that feeds upon itself as the market volatility moves impact consumer confidence as well with. >> leslie, help us to explain and reconcile the two aspects. on one hand, it seems that the economy is doing well enough that the feds were con

. >> let's get to leslie picker, who has gone inside the markets to find out what's causing this christmas. >> i want to start with an analogy. picture a row boat, if it has enough people, it will be stabilize. but if it has fewer people and moves to one side, the boat may tip in that direction. that's akin to what we're seeing in the market this week, with fewer participants, thanks to the holiday, and importantly, this is all happening against the backdrop of this new market regime of quantitative tightening in other words, it takes far less to move the market one way or the other when there's less liquidity, coupled with less volume on individual names bring that against the backdrop of greater uncertainty, and it's possible to have just a couple of large players, machine or human, move the market in one direction or another that's why you have these fast and furious swings like we have seen in he cent days some of this is due to hedge funds. and within that group, there ar participants also contributing to these moves on the margin, namely mutual funds and etfs put this all against the

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we will pick up from that point right there, and leslie picker joining me now, and finance columnist ick neumann who is the director of public for growth, and also dave mcintosh. and mentioning what leslie was talking about the volatility rounding out the final month of 2018, can we, pkt the expect the same factors to cause volatility in 2019? >> yes. we have reached highs in august or september depending upon how you measure it, and then we saw lots of wild swings. it is crazy in a way, because for the week, we will end up more or less flat, but of course, we had all of the draw marks and drawma and it is telling us something. investors are concerned about the economy slowing. not a recession, but economy slowing, and the corporate profit growth is going to slow, and is that going to tip over into something worse than we think or remaining steady? co corporate profits are strong, and the economy is still pretty good, and that is why we are getting the manic reaction in the market, and maybe it is going down by enough, and people are saying, wow, these stocks have not been this cheap

cnbc.com/halftime and we'll answer them at the end of the show >>> welcome back i'm lessly pi leslie picker wells fargo has reached an agreement with attorneys general from all 50 states to settle claims over its retail sales practices, auto and mortgage issues it is part of the agreement, it has agreed to pay $575 million to resolve civil claims on that front, they have also agreed to designate teams to review and respond to customer inquiries as well as maintain a website that helps disclose the remediation efforts that can be done back over to you >> thanks. >>> it has been a volatile week for socks, but sales force has been a standstandout, up 10% of week, so our stock of the week you own it >> we do software as a service is an industry that we are really bullish on recurring revenues, 93% of sale forces revenues are recurring. doesn't get much better than that and because their platform is so customizable, their relationships with their customers are very, very sticky. so because those relationships are so sticky in our opinion, it really justifies the higher valuation for sales force.

so i want to bring in cnbc's leslie picker, an old friend of mine who joins me now.ess, down 247 in the last 10 seconds. >> yet another red day on the screen. it's really coming off weak economic data from china, europe, china reporting industrial output, that lagged economists expectations. same is due with data out of europe, pmi indicated a slow down over there. you start to hear a chorus of economists, looking at the potential for the next recession, some saying next year, the year after or two years from now. it has traders on wall street very concerned about the state of global growth right now, and on the earnings front in the u.s., things aren't really looking much better. you've got costco reporting first quarter numbers that missed analyst expectations on the top and bottom line, and starbucks, announcing no improvement in their guidance even as it rolls out new initiatives and expands overseas. so a lot of concerns just broadly about the state of consumers, state of global growth and it's just, you know, not a great way to really close out the year, steph.

leslie picker is at a mall are the crowds out >> the danbury fair mall has been open for about 45 minuteslittle thin we're expecting that to pick up a bit more as the day gets on for that last-minute christmas shopping interestingly about 7% of americans said they planned to still shop on christmas eve, cutting it down to the wire for that shopping. that's according to a national retail federation survey and the biggest procrastinators, it's men buying gifts for their family that's why items like jewelry and purses tend to outperform in the final days leading up to christmas. that's according to customer growth partners. toys and electronics, those items tend to be bigger sellers around black friday because shoppers expect those items to be out of stock when it gets closer to the holiday. so they like to purchase those in advance we spoke with shoppers today to see what brought them to the mall on christmas eve. >> i would pick a person, walk around, see what i want. when it hits me, i know what it is i can't do the list thing. >> that was the goal to get in early and out before the crowd

leslie picker joins us with the latest at this hour. ares of j&j continuing their descent, down by more than 9% such pressure on the stock comes on the heels of a blockbuster investigation by reuters the report showing the company knew for decades that its raw talc and finished powders sometimes tested positive for small amounts of asbestos. reuters says it obtained confidential documents to facilitate its reporting and those documents reveal j&j failed to alert regulators or the public about the potential asbestos risks and reuters says j&j sought to influence the fda's plans to limit asbestos in their products as well as scientific research on talc. j&j issued a long statement saying in part that the article is, quote, one sided, false and inflammatory and that it's an absurd conspiracy theory j&j says it will continue to defend the safety of its products and as you can see, johnson & johnson down 9%. >> biggest decline since 2002. >>> let's get to julia boorstin with a news alert on t-mobile and sprint. >> that's right, t-mobile and s

but private companies aren't rushing to change ipo plan leslie picker joins with us a look at why. >> heying with morgan. conventionally it takes about six months before volatility in the public markets begins to trickle into the private markets. that's two consecutive quarters where persistent correction is there. the reason why is we have seen this convergence between public and private markets with investors investing in both. what happens is when you see mutual funds losing money in the public market investments they start to rein in the investments in the riskier private market investments taking liquidity out of that system earlier we spoke with a prominent investor who participates in both public and private worlds about this phenomenon here is what he says. >> i suspect that what will happen if we do have -- if and when we do have the next market correction is some of the capital in the private market will slow down but you know the merger of the markets will maintain. with that said, i suspect if the markets are strong in '19. '19 will be a big ipo year. >> now, we are her

. >>> welcome back to "squawk on the street," i'm leslie picker stocks are attempting to rebound todayate morning trading following monday's sharp sell-off. the dow has erased a 282-point gain as volatility continues on wall street. >>> despite the pullback, consumer discretionary stocks are outperforming. that sector, though, still firmly in bear market territory, down more than 21% from its recent peak in late september. among the names leading that group to the upside include department stores kohl's, nordstrom and macy's boosted by strong retail sales nationwide over the past month. finally take a look at shares of amazon, up more than 2% today on the back of its record-breaking holiday season and on pace for its first positive session in the past five. now i'll send it back downtown to you guys. >> all right, leslie, thank you very much. >>> it has been a rough year for high-end luxury stocks, with names like tiffany, tapestry all down for the year. is there upside to be found in 2019 robert frank has the playbook for luxury stocks. robert >> well, it was the year of worried well

. >>> let's send it over to leslie picker for market flash on johnson & johnson. >> routers is reportingn knew for decades that its raw talc and finished powder sometimes tested positive for small traces of asbestos they failed to alert regulators or the public about the risk, according to the report. j&j sought to limit the fda's plans to limit asbestos in into their products as well as scientific research surrounding talc reuters says it obtained documents the contents of which are being reported and j&j told reporters it stands by its product saying thousands of tests show that talc is safe and any suggestion that j&j hid information is false j j&j's cfo said science proves their product is safe. >> with respect to talc, appreciate the question. we're going to defend that product which is used by consumers across the global. science is on our side that is indicative the product is safe, not just the scientific conclusions of johnson & johnson lab folks, it's the fda, the national cancer institute. so we'll defend products we believe are safe. >> the story and surrounding controversy a

has it been a wild end to 2018 some analysts blaming the heavy foot steps of big institutions, leslie pickerhe one part of your beat, the hedge funds were blamed for the liquidation, some of the beating up of the market and now we're looking at pension funds and what their role might be. >> there's a different culprit for each day, mike. it was supposed to be a sleepy week on wall street with many market participants away for christmas and new year's and there's one type of investor that has been lurking amid the volatility and that is the pension funds. today is actually the deadline for pension funds to rebalance. they tend to do so on a quarterly or monthly basis. the few days leading up to december 31st are critical ones for asset allocation which means essentially the waiting's of equities versus bonds versus alternatives like private equity and hedge funds. but because domestic equities declined so dramatically during the quarter and especially relative to bonds, pension funds exposures to equity funds shrank as well. therefore they needed to be big buyers before the end of the year to

. >> what impact is it having on the market joining us, larry mcdonald, along with our own leslie pickercome to you both. larry, blame the algos for this week >> in a bull market when the vix, the volatility index is around 10, 11, 12, the algos will depress volatility because they keep the market in a narrow range. we saw that all of last year now, the beast in the market, that serpent in the market that's driven by the machines, when you breach certain technical levels and there's a number of high-profile stocks, especially fangs, that have violated traditional technical levels that are extremely important historically, when you have that, the selling is compounded, since thanksgiving, we had a 7% move up in the futures. and then a 6% move down. that's a 14% swing in a week and a half, that's highly unnatural >> leslie, are people on wall street saying the same thing >> i think there's an important variable that we need to explain that comes between, that's liquidity. we're in a new regime as it portends to liquidity. so the machines have been there, but we didn't see the wild price sw

well, the dow nearly 7 h points at the worst levels of the day leslie picker joins us now with how hedge funds a faring >> it's not looking good for them the red on their screens really near the red everybody else is seeing we're really seeing the market drawdown trickle into the quant community specifically that's a strategy known as equity market neutral. that's really feeling the pain this strategy aims to minimize swings in performance and preserve capital by not necessarily outperforming the market but not losing money either it doesn't look like they have succeeded in that goal according to number. their prime services team is estimating losses for the equity market neutral strategy to be more than 6.2% in the year through november that's owed in large part to the past two months. a large part of these losses can be attributed to deleveraging that these hedge funds really had to do while these large swings were taking place during the month. it made it difficult for their algorithms to trade profitably now, the stock pickers are also struggling year to date. they're down about 5%.

. >> you can spin it both ways >>> let's focus in now on hedge funds with leslie picker >> these areindustry that will carry into 2019 first you were funds 2018 was a brutal year with about $10 billion in some high profile meltdowns. more hedge funds will shut their doors in 2019. in recent years when one hedge fund lost assets, another one up and gained them. many expect the industry to struggle overall with redemptions in the new year after a difficult fourth quarter. second, less everage hedge funds tend to borrow capital to size up their positions in more certain environments but in 2019 as rates rise and more volatility takes over, certainty may be more difficult to find. therefore, funds are expected to be more cautious and delever in the new year and lastly, responsible investing. in an attempt to shore up, hedge funds have returned to responsible investing. that means they're putting their capital into strategies that benefit society as a hole and avoid those that they believe are not like gun manufacturers and tobacco producers. a recent survey found rej funds saw a 50% incr