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tv   The Claman Countdown  FOX Business  April 28, 2021 3:00pm-4:00pm EDT

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charles: let's keep the happy thoughts. that's why we always bring you on, my man, because we make money. want to say thank you to gary. again, thank you to danielle. as i hand it over to my colleague, liz claman, we got a little bit of bump. chairman powell, he's not going to rock this market, liz. liz: -- charles: so we're waiting for liz to come on. little technical glitch there. again, chairman powell's not going to be the one who's going to rock the boat with this thing, for sure. we'll see. liz: charlie, thank you very much. this is the part that moves markets, what fed chair jerome powell is saying during the remainder of this news conference. he already said, very importantly, inflation is going to spike higher, but then it'll somehow magically disappear. so we're going to go back into the virtual room right now, but
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on the screen we're going to be cycling through a whole bunch of market shares so you can watch them move as powell speaks. let's listen in. >> -- for a number of firms that is thought to carry well understood risks. the prime brokers businesses is a well understood business, so a number of them would have had this. and it was essentially, i believe, the fact that they had the same risk position with a number of firms, and some of the firms were not aware that there were other firms that had those things. i wouldn't say it's in any way an indictment of our supervision of these firms. in some cases it seems as though they were risk management breakdowns at some of the firms, not all of them, and that's what we're looking into. >> thank you. nancy marshalling gensler. >> hi, chair powell. i'm wondering, are you planning to visit the homeless are
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encampment that's near the fed in washington that you drive by? have you been invited, and if you went, what would you be looking to learn there? >> yes, i have not had a chance to do it yet with, i've been very busy, but i will visit. i don't want to visit at a time of a lot of media attention because i don't want that to be part of the story. but i will go visit when it's no longer a news story. and i, you know, aye met with homeless people many times, a number of times anyway, let's say, and i think it's always good to talk to people and hear what's going on in their lives. what you find out is they're you. they're just us. i mean, these are people who in many cases had jobs and, you know, they have lives, and they've just found themselves in this place. it's a difficult problem though, you know, there are many, many facets of it. and i'm well aware that this is not something that the fed has all the tools for or anything like that. but i will do that when the need arises and when it's not so
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much, you know, in the public eye. >> and is there anything specifically that you would be looking to learn there? >> not really. i mean, i think i know what i'll find there. i think you connect with these people and, again, what you find is they're like you. that could be you. that could be your sister, that could be your, you know, your kid. you always feel that way in that sort of an encounterer and, you know, it just is, it's an important thing to engang in, i think -- engage in. and we bring that understanding into our lives and, frankly, into our work, the work that we do as well. >> thank you. hannah lynn. >> hi. i wanted to ask about digital currency. you've previously said a few times that you think it's important for the u.s. to get central bank --
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[inaudible] right? but with countries like china moving very quickly on -- i was wondering what you think the risks are of moving too slow on digital currency. >> right. so i think the first thing to say is that we feel an obligation to understand the technology and all of the policy issues very, very well. central bank digital currencies are now possible, and we're going to see some of them around the world, and we need to understand whether that's something that would be a good thing for the people that we serve. how would it work in our system. and there's some very, very difficult questions to answer. but i think we are engaged in a serious program to understand both the technology and the policy issues. i am, i would say this, we're the world's reserve currency,
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and that means that the dollar is used in transactions all around the world far more than any other currency, and that's because of our rule of law, our democratic institutions which are the best in the world, our economy, our industrious people, all the things that make the united states the united states. that's why they're the reserve currency. and, of course, we have open capital accounts which is essential if you're going to be the reserve currency. so those are the factors that make us the reserve currency. i am less concerned that someone, that another country might have a digital currency -- first, you know, is ask yourself the question does that mean if you were a company that's doing international business, would you then suddenly start to use that currency to do your international transactions, or would you still do them in dollars, which is what everyone does. i'm not so concerned about that. i am really concerned about getting it right. it is, it is a truckee set of --
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tricky set of questions that we have to navigate in a world where we already have, remember, a highly involved payment system, we have fed now and other immediately available funds. pretty soon everybody will be able to do what people do in other parts of the world which is just use their phone to make immediately available payments all the time. it'll be normal. and what would be the role of a central bank digital currency in that kind of an environment. far more important to do it right than it is to do it fast or feel that we need to rush to reach conclusions because other countries are moving ahead. i mean, the currency that's being used in china is not one that would work here. it's one that really allows the government to see every payment that's used, for which is used in real time. it's much more to do with things that are happening within their own financial system than it is, i think, to deal with the global, you know, sort of global
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competition. >> thank you. michael derby. >> thank you for taking my question. i wanted to ask you another question about inflation, and it has to do with inflation expectations. a number of different surveys are showing multiyear highs in inflation expectations ratings. so i wonder if that was something you saw consistent with your inflation outlook, is that something that worries you, or do you see that it's made the success of the fed's new inflation framework, you know, making it out to the broader public in. >> right. inflation expectations before the pandemic hit, and here we think of survey, market-based survey being either households or economists and market base. you hook at all of those -- you look at all of those, and i would say that they were at the low end of what would have been consistent with a 2% inflation target. particularly 2% average
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inflation. so they were at the low end. inflation expectations actually went down a bit at the beginning of the pandemic, and now they've just moved back up to levels broadly that are where they were in 2018 or in some cases 2014. and i would say more consistent with our man kate. mandate. and we want them to be higher and, you know, on a persistent basis. we want inflation to run a little bit higher than it has been running for the last quarter of a century. we want it to average 2%, not 1.7%, and for that, we need to see inflation expectations which are consistent with that, well anchored at 2%. we don't really see that yet, but i would say that break evens have moved up in a way based on cpi, of course, but they're now at levels that are pretty close to mandate consistent whereas before they were below. we monitor inflation expectations very, very carefully, as you would obviously know. so that's where i would say it
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is. >> one small follow-up. do you have any red lines on inflation readings where, you know, you hit like a surgeon number on, say, core pc? that would be, you know, a trigger response from the fed in. >> doesn't work that way. you know, war -- can inflation measures are always going to be a bit volatile. we expect, as i mentioned, we expect core and headline pce to move up because of base effects. and, you know, and we expect that to go away. we also expect these bottleneck effects to come in. we don't know how persistent they'll be. we think they'll, you know, it's a matter of when they will pass through, not when they will pass through. but we can't be confident about the exact timing of that or the size of them. they don't seem especially large at the moment but, you know, we don't know. you know, this is all about the reopening of the economy. that's what's happening. we were in a deep, deep hole a year ago, and now with a lot of
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help from fiscal policy, some additional help from monetary policy and, you know, a great deal of help from vaccination we're seeing a strong rebound in activity. and what's happening is it's -- demand can be spurred with fiscal transfers and the saved-up physical transfers and people going back to work and things like that. supply side will take a little bit of time to adapt. new restaurants will have to be opened. the ply of various inputs -- supply of various inputs into the goods parts of the economy will have to be brought back up to speed. you're seeing some of that. that'll happen over a period of time, over coming quarters you'll' some of the bottlenecks resolved, but the last one may not be reofed for some time. -- resolved for some time. thank you. [inaudible] >> yeah, with yahoo! finance. i wanted to ask, it seems like
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the people on the outside who might not follow finance daily, they're contributing to things gamestop, now doge coin, it seems like there's interesting reach in this market, also archegos. can does the fed see a relation to those things, and is there a financial stability concern from the fed's perspective at this time? >> right. so we look at football stability for us -- financial stability for us we have a broad framework. i know many people just look at asset prices, and they looked at a some of the things that are going on in the equity market which i think do reflect froth in the equity markets. but really we try to stick to a framework for financial stability so we can talk about it the same way each time and so we can be held accountable for it. one of the areas is asset prices, and i would say some of the asset prices are high. you are seeing things in capital markets that are a bit frothy. that's a fact. i won't say it has nothing to do
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with monetary policy, but it also, it has a tremendous amount to do with vaccination and reopening of the economy. that's really what has been moving markets a lot in the last few months, is this turn away from what was a pretty dark winter to now a much faster vaccination process and a faster reopening. that's part of what's going on. the other things though, you know, leverage in the financial system not a problem. that's, that was one of the four pillars. asset prices was one. leverage in the financial system is not an issue. we have very well capitalized large banks. we have funding risks for our largest financial institutions that are also very low. we cough some funding risk -- do have some funding risk issues around money market funds, but they're not systemic right now. and the household sector is actually in pretty good shape. it was in very good shape as a relative matter before the financial crisis. sorry, the pandemic crisis hit.
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there were real concerns, of course, with high level of unemployment and loss of wages and all that, but that the household sector would weaken dramatically. that hasn't happened. so with the fiscal transfers, money on household balance sheets, they're in good shape. you see relatively low defaults and that kind of thing. so the overall financial stability picture is mixed, but on balance it's, you know, it's manageable, i would say. and, by the way, i think it's appropriate and important for financial conditions to remain accommodative to support economic activity. again, 8.5 million people who had jobs in february don't have 'em now, and, you know, there's a long way to go til we reach our goal. so that's what i would say. >> as a follow-up, you mentioned money market pressures. the fed didn't make changes to interest on reserves, what was the logic behind that? just hoping for clarityification -- clarification on that.
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>> right. so the federal funds rate has been well at target range, and we have the ability to use oured administrative tools to make sure that that remains the case. we do expect further downward pressure on rates through asset. purchases and also runoff in the treasury general account. but at this point, we didn't see a need to deploy our toolses to support -- tools to support rates. and, of course, we will do so if the need does arise. >> thank you. [inaudible] >> hi, chair powell. i wanted to ask a similar question. we are seeing elevated market valuations, and some economists are concerned that the economy might overheat at least for a period of time. so should the fed and other regulators be thinking about tightening capital requirements or extending oversight to the
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nonbank sectors so that financial stability risk todays as low as it has been many -- stays as low as it has been? thank you. >> so i think capital requirements for banks are, to me, went up tremendously really over the course of the ten year between the financial crisis and the arrival of the pandemic. and the banks really made it through a real stress test very well and passed three of our -- two of our stress the tests and then as another one that's pending. so capital is in a good place as far as i'm concerned in the banking system. but to your point, what we saw was so what kind of happened during the pandemic crisis that requires attention. and number one is money market funds and corporate bond funds where we saw run dynamics again, and we need to, we're looking at
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that. so we're looking at ways if people around the world are looking at ways to make those vehicles resilient so that they don't have to be, you know, supported by the government whenever there's, you know, severely stressed market conditions. it's a private business. they need to have the wherewithal to stay in business and not just count on the fed and others around the world to come in. so that was that. the other one is treasury market structure. dealers are committing less capital to that activity now than they were 10 or 15 years ago. and the need for capital is higher because there's so much more supply of treasuries. and so there are some questions about treasury market structure, and there's a lot of careful work going on to understand whether there'sing something we can do about this because we, you know, the u.s. treasury market is probably the most
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single important, single most important market in the economy in the world. it needs to be liquid, it needs to function well for the good of our economy and the good of our citizens. so it's not clear what, where that tapings you -- where that takes you, but we are taking a careful look, and the treasury department is really going to be leading this. treasury market structure and all the various aspects of that to make sure that we do have a resilient, strong treasury market that can work even in difficult times. as you know, at the very beginning of the financial, of this recent crisis there was such a demand for selling treasuries including by foreign central banks that really the dealers couldn't handle the volume. and so what was happening was the market was really starting to lose function, and that's, that was a really serious problem which we had to solve
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through really massive asset purchases. and, you know, so we'd like to see if there isn't something we can do to -- do we need to build against that kind of extreme tail risk, and if so, what would that look like. >> thank you. edward lawrence rms. >> thank you, fed chairman, for the question. so i'm interested in your thoughts, there's so much fiscal health and accommodation, you said today that vaccinations will follow the normal economic conditions or lead to more normal economic conditions later this year. when do you see the economy being able to stand on its own feet, so to speak? and along those lines with the fiscal spending and accommodation, you talked about with transitory inflation does more spending need to be injected into the system or would that affect the transitory nature of the inflation? thank you. >> well, when will the economy be able to stand on its own feet. i'm not sure what the exact
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nature of that question is. >> well, what i'm saying is, you know, when will you need to lower the amount of treasuries you're buying, sort of taper off a little bit, when can it stand without having that support from the monetary policy side, and then further transitory -- >> okay, sorry. so we have, we've articulated our it's for that, as you know, and that is just we'll continue asset purchases at this pace until we see substantial further progress, and we're going to communicate well in advance of any decision we're going to let, you know, the public know that that's what we're thinking and so there'll be a lot of warning and that kind of thing. that's substantial further progress toward our goal. that's really all it is. it doesn't have any expersonal virus-related, specific requirement, although i do think, you know, the virus will need to continue to be controlled for us to achieve those economic goals. but it's really the economic goals. now, your second question, sorry, just say again. i didn't quite get that
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question. >> sure. with all the fiscal pending that's happened and the accommodation, does the system need more spending either9 from the fiscal side or would more spending affect the transitory nature of the inflation and put those upward pressures on inflation long term many. >> so it's up to congress. we're not an adviser to congress, you know? we don't weigh in on specific fiscal bills or proposals. that's really between elected parties, you know? basically fiscal policy is the province of people who stand for democratic election and win, and they get to make those very difficult decisions, and they get to be accountable to the voters. we didn't do any of that, we don't have a seat at that table, we don't seek a seat at that table. so that's really something for and the administration to deal with. >> thank you. greg rob.
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>> hi. greging rob from market watch. thank you so much for the opportunity. wanted to circle back to the housing market. it's just kind of confusing that the question and your answer, you know, the housing market strong, prices are up, and yet the fed e is buying $40 billion per month in mortgage-related assets. why that, and are those purchaseses playing a role at all in pushing up prices? >> yeah, i, i mean, we tart thed buying mbs because the mortgage-backed security market was really experiencing severe dysfunction, and we sort of articulated, you know, what our exit path is from that. t not meant to provide direct to housing market. that was never the intent. it was really just to keep that as -- it's a very close registration to the treasury
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market and a very important market on it own, and that's why we bought mbs2. again, not an intention to send help to the housing market which was really not, not a problem this time at all. so, and, you know, it's a situation where we will taper asset purchases when the time comes to do that, and those purchases come to zero over time, and that time is not yet. >> thank you. >> thank you. and last question will go to mike mckey. >> thank you, mr. chairman. since i am last, let me go back to paul's question, the first question, and ask him -- ask you whether, not whether you're thinking about thinking of tapering, but why your not. we're seeing bank lend fall, the markets seem to be operating well. are you afraid of a taper tantrum, or is it as one money manager put it, if you get out
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of the market, there aren't enough buyers for all the treasury debt, so rates would have to go way up. what do we get for $120 billion a month that we couldn't get for less? >> it's really not more complicated than this. we articulated the substantial further progress test at our december meeting and really for the next couple of months made relatively little progress toward our goals and very, very substantial further progress from december. and then vaccination started to get more widespread, the economy reopened, we got a really nice job report for march. it doesn't constitute substantial further progress. it's not close to substantial furthering progress. we're hopeful that we will see along this path a way to that goal, and we believe we will. just is a question of when. and so when the time comes for us to talk about talking about it, we'll do that.
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but that time is not now. it's -- we're just not -- one great jobs report, it's not enough. you know, we're going to act on actual data, not on a forecast, and we're just going to need to see more data. it's no more complicated than that. >> -- rates where they are doesn't change anything, but does it change anything if you fully tapered a bit, if you spent less? would you still get the same effect? >> if we bought less -- you're very faint, so if someone has volume, if we bought less, no, i think the effect is proportional to the amount we with buy. we have tried to create accommodative financial conditions to support economic activity, and we did that, and we articulated that, you know, the tests for withdrawing that accommodation. and we think, you know, so we're waiting to see those tests to be fulfilled both for asset purchases and for liftoff of
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rates. and, you know, when the tests are fulfilled, we'll go ahead. we've done this before. we did it after the last crisis, and we'll do it, maybe we'll do it as those tests arefied, we'll do it. and the only thing that will guide us is are the tests met. that's what we focused on, have the macroeconomic conditions that we've articulated, are they been realized. that will be the test for tapering asset purchases and for raising interest rates. >> thank you very much. >> thank you. liz: was it me or did he just start to get frustrated there? i mean, listen, i get it. he was getting this question about why wouldn't you taper, why wouldn't you with cut down on these bond purchases, but this is a significant moment.
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federal reserve chairman jay powell coming out during the q and a part of this news conference got pushed hard on why the fed isn't even thinking about thinking about slowing it monthly purchases of $120 billion in government treasuries per month, every month, even as the economy snaps back. but you can see that the dow took a leg down -- this is an intraday chart -- also flip it to the s&p 500. far-right part of your chart. the dow and the s&p had also -- at least the s&p had turned around, butted but suddenly we d to see a reversal when jay powell acknowledged the word as it per taped to the raging stock market. and inflation? paul says don't worry about it. listen to how he put it. >> 12-month measures are likely to move well above 2% over the next few months as the very low inflation readings recorded in march and april of next year
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drop out of the calculation. you saw it in the march cpi reading, and you'll see it later this week in the pce price data. liz: okay. so he's actually admitting that, yes, you'll start to see, if you haven't already, rising prices, but don't worry, they will magically disagree. began speak at 2:30 p.m. eastern, now the nasdaq has started to fall. we've been waiting on apple and facebook earnings after the bell, so we are about 43 minutes from that. in the meantime, the 10-year treasury yield went as high as 1.64%. we're seeing some wicking movements there. let's get to john sylvia and all-around fedex ebert jon hilsenrath. the s&p started jumping when powell was asked when the
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central bank would start tapering its $7.78 trillion balance sheet, bloated by any saturdays. here's what he said, and then i want you to the to comment. >> no, it is not time yet. we've said we would let the public know when it is time to have that conversation, and we said we'd do that well in advance of any decision to tape orer our -- taper our purchases. liz: okay, john. is that the key moment or is the froth comment about the markets the key moment in you tell us. >> i think that was the key moment, and the froth comment was maybe people taking a little bit of money off the table. frankly, one of the things that i found interesting in today's press conference -- well, two things. one was the questions that the fed chairman was getting. looked at housing prices, stock prices, look at inflation. and what that tells me is the
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pressure is starting to build there. and i think what -- the fed doesn't want to get ahead of it. he said we're watching the data so let's watch a couple of jobs reports. there's one coming up next week. it might on the take another couple of really strong jobs reports before the fed says, all right, let's have this conversation about what this might look like when we stop, when we start the tapering. he doesn't want to get ahead of himself. but that's not to say that, you know, they're not going to be there within the next couple of months if we continue to have a really good jobs numbers. liz: okay. john civil ya, here's what -- sylvia, here's what worries me. we have a very strong labor market that's ooh come back although you saw the little bit of, shall i say, annoyance where we had one good jobs numbers,
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we've seen the job gapes, we have vaccinations helping to reverse the lockdown after-effect, new businesses are starting to open up, and we do have good economic data pretty much across the board. so how does the fed avoid not getting caught by its own tail if they're behind the curve? >> well, for me, i would have voted for stock tapering. let's be up front on that. liz: okay. >> i'll build on jon's comment. a year ago inflation expectations were 2.3%, in march a one year ahead survey was 3.7%. inflation expectations are not well anchored. in terms of inflation being transitory, no. the fed purposefully does not want this inflation move to be transstory. 2019 inflation was 1.8%, and the
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latest cpi markets 2.6. the fed is very happy with that. and again, i'll pick up on jon's comments, i think a lot of the questions to powell were well placed because it's pretty clear that if you're in cash and you're in government bond funds, you're losing money. now you're going to push beam into real assets, housing. and so, again, i think jon's got it right on target. the fed is misplaced with respect to oakes. liz: jon hilsenrath, the mention of the word inflation. bank of america scrubs and twitter and tries to figure out when we start to see increases. they have been looking for all
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of the conference calls for earns, and the number of mentions of inflation have jumped, have tripled and are hitting the highest level since 2006. you've got campbell's soup, kraft all saying we are seeing higher material costs here. >> yeah. you know, it's a complicateed issue, and i kind of think the economy right now and all the indicators it's spitting out is like think about a patient on an emergency room table after she has a heart attack. you've got these ekgs and signals flying up and down, and, you know, we had a major shock to this economy last years which is kind of like that ekg going way off the charts. and, you know, i think we're going to be feeling the after shocks of that for the next several months.
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and the patient isn't kind of normalized or stabilized. we are going to see some pretty wacky things going on with inflation i think for next year. but the question in the fed's mind is going to be touch of this stuff is lasting, you know, how much of it is just this weird place we're in after the pandemic, and they're ott not going to know that for a while, and the lesson they're taking for the last 20 years where they've the consistently been below the numbers is they're going to believe it when they see it, they'd rather be on the side of being a little late than being early. it's not quite right the -- that's the way they're operating. i think the bottom line for viewers out this is, you know, in terms of your investment portfolio, the fed is pumping millions -- trillions of dollars into the economy and so is the
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federal government. and, like, that's a green light until something changes. liz: yeah, i know. and a lot is changing as we speak. we still have the dow down about 119, off the earlier lows, but the s&p's up 2 points, nasdaq9. john and jon, great to see you both. let us get to that. the king of search is reigning supply in what's left of this final hour of trade. alphabet posting it second straight quarter of record afts after the bell yesterday. cloud services and ad sales gaining confidence that bag to thing's games will hold post-pandemic. the announcement of -- we're off the highs of what we have seep. nasdaq, as we can see, is still
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struggling just a bit. we're trying to see if it can get into positive territory. it is a full green light for google buddies appointing dip into the red for microsoft. shares sliding. stay at home demand link9 inn, teams and gaming consoling x box all posting great numbers. but in a way case of when you try your best and don't succeed, a 46% jump in its glooging could competitive -- not enough for investors after yesterday's record high action that sent microsoft's fully value over $2 trillion. yep, market cap now above $2 trillion joining apple. we've got microsoft pulling back by 2.7%. and the earnings train running over spotify at this hour. the star power of joe rogan and harry and meghan not enough to keep monthly actors engages.
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the key metric coming in at near -- [inaudible] starbucks trying to fuel the buzz with a positive forecast, but a miss on quarterly sales estimates in the first three months of the year is creating a stir into the close and not in a good way. we're down 3.5% for starbucks. on the flip side, it's an all-out shopping spree for shopify in this final hour. shares jumping 11% after the e-commerce architect doubled profit estimates as revenue growth surged 110% in the nurse quarter. shopify, of course, is the, if any, that a whole bunch of companies out there get on line sales and conduct online sales. folks, we're going to give you a year to date between apple and facebook's spock stock
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market. facebook up about 2% year the date. apple, kind of flat. we're now 24 minutes away from two of the biggest names in tech will report earnings after the bell with ample expected to blow past. is one a better bet for the post-pandemic future than the other? scott bauer, teddy weisberg. kind of dead money so far here to date. what's your spidey sense telling you? >> yeah, you have two really different looks here. i love apple, liz, but a the expectations are just over the top here. i'm a little concerned about that, but i think that they are going to crush, absolutely crush estimates here if they show that the mac book sells continue at
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these historic levels. they had their first $100 billion revenue quarter last wall street. i am not buying ahead of the print here. i would buy iten op any bullback. i think there will be opportunity to get into it after the print. facebook, people love it. i'm very concerned about facebook here. i actually think there could be an issue going out with guidance here given some of the recent commentary about the new apple app store issue. so i'm very nervous about their guidance. again, i would not buy this ahead of the print. i'm not worried about this flying to the upside, but i'd buy these on any dips. liz: teddy, scott just treaded on your flag. i've known you long enough -- >> uh-ohment. [laughter] liz: you've owned facebook since
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its ipo in 2012. on monday apple rolled out the new feature that's going to allow users to opt out of tracking and which which has infuriated a whole bunch of small businesses because they use that to track and target ads. how to you expect that's going to hit earns in the future? >> well, of course, i don't have a crystal ball, but in terms of whether you would buy here's of these tocks, prior to the earnings. buying stocks before the earnings is a big guessing game, and i think no matter what you with always wait until after the equity earnings report. any miss is usually a negative problem. but in terms of facebook, i think facebook's a cheap stock. i understand there'll always be some kind of competition, but it's a pretty clever company.
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i suspect there's no company in the world that has the footprint that facebook has. and you pointed out we've been long the stock since a few months after the ipo. we continue to be long the stock and on any weakness we would be a buyer of this stock. liz: yeah. pe 27 which is sort of quaint by today's standards. really quickly, scott bauer, tell me about the price action in the markets and what you think it says about what powell blurted out, and that is status quo, cheap money for as far as the eye can see. >> liz are, you picked up on it really well. i think he did get frustrated toward the end, but the market didn't blink, the market did not really selloff on that. and in the past when we've seen a little bit of hesitation or the algos have picked up maybe some body language or something, we have seen some big reactions in the marketplace. we didn't see that here. we didn't see bond rates really
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change very much at all. so i think the market really took this intact and, i think, is looking ahead to the unimeeting and commentary. that one, to me, could be a big market mover. liz? liz: and i do have to say he did get frustrated. we're cutting that sound bite, it came closer to the end -- oh, you know what? every we have with it. okay, i want you guys to hear this, and all of our viewers can tell me, is it me? >> no. liz: here was his response to as to why he is not going to scale back the stimulus buying of bonds. let's listen in to how jay powell reacted. no sign. yea. [laughter] i'm told -- okay, hold on, we're going to get it. i guess that he just feels like he's scared and that all federal
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reserve chiefs are there. they to do not want to see a taper tantrum. they don't want to see the markets completely freak out, teddy. teddy? >> yes. well, liz -- i'm here, i'm here. i think, actually, the fed is going to overplay their hand here. i think the real risk for the markets and for the fed is that they get caught flat-footed here, so if he's squirming, he's nervous, i think he has a right to be because i think they have a potential problem. liz: well, he has a right to be because when you have all these reporters needling you over and over again, yeah, it becomes a problem. i do need everybody to look at the dow transports. a pretty significant reversal here because had been higher and now falling. not a huge fall but, or to me, when you start to see this on a fed day right around the time that the report came out that they're leaving rates 0-.25
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which, by the way, those are intensive care unit with emergency rates, not annual check-up, everything's fine rates. we're closer to annual check-up -- i'm sorry, we are not in an emergency situation anymore. we will continue to watch all of this and more. we are 8 minutes before -- 18 minutes before the hour. dow jones industrials down 04 points. keep -- 104 points. the s&p is still above the flat line. any gain here is a record, so we're up 4 points, so we may see a record close for the s&p. all right. after taking hits in the archegos fire sale last month, discovery's stock, look at that, it is sliding as its investment in the launch. of its new streaming service took a chunk out of its bottom line results. subscriber numbers are currently at 15 million, and then you could look at viacom. viacom's tock is sinking after -- yeah, about 2.5% to
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discovery's loss of 3.6%. viacom's dropping after citigroup cut its price target to $56 from 92. okay, we're at 41 right now, say its runup was clearly driven by one single firm after shares got tangled up in bill wang's margin call meltdown. bill wang, of course, runs the family business called archegos. citi boosting its rating on the shares to a buy. and as we said, discovery falling right now 3.6%. the crown of the world's richest man is now perched firmly back on amazon ceo's jeff bezos head as chatter intensifies ahead of tomorrow's earnings report. charlie gasparino, now what? >> you know, liz, i think -- i could be wrong, i'm looking at my notes here, but i could be wrong, i made and you made jeff
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bezos even richer. i think -- liz: oh, my god, i thought you were going to say i made and you made a mistake. >> no, yet. [laughter] over the last couple days, we've been reporting the9 chatter among traders and investors that will at some point be splitting its shares at $3,400 or whatever it is right now, 3,472. a lot of people, a lot of investors say it's too expensive for the average retail buyer to hold. amazon's stock has been largely flat over the last nine months. one of the reasons why is because it's gotten so expensive, and plus jeff jeff bezos is financing his new space exploration company that's rivaling elon musk's spacex. his ex-wife, mckenzie, is sharing stock for her charitable stuff. put all this together, you don't
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have retail participating, investors are saying if it's not tomorrow, it's going to be some time in 2021 where they believe that bezos, that amazon split its stock. not two for one, obviously, because that would still make it pretty high. a little less than $2,000 a shareful what we hear from people like scott redler, he's predicting a 7 to 1 stock split. the investor who was on your show a lot, liz, that he believes -- liz: trader. red dog. >> yeah, red dog. if it doesn't come tomorrow, it's going to come sometime in 2021. it's inevitable because you need retail participation in the stock given the fact that it's largely gnat lined in recent months -- flat lined. and if you look at unwith of the biggest gains its got after the last year was after we reported the investor chatter about a
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stock split. as we did that, it was fascinating. bezos then reclaimed the crown as the world's richest can -- liz: do we get a commission? [laughter] >> he's worth now, by the way, $202 billion as when we last checked. and i think musk is at more than $78 billion. just chump change for these guys. it's interesting how, you know, we put a couple hundred billion dollars in his pocket, little old me and you. isn't thattic sick? here's the irony, tomorrow they don't do the stock split, they're all predicting it's coming in 2021, maybe tomorrow. you know, one thing that redler mentioned to us and it's a good point, or you know, they've been flat lining except for the recent pops for the last nine
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months despite good solid earnings. they're going to have solid earnings tomorrow. so it's obviously a technical factor with the share of the stock being at $3,000, being so high that retail can't get involved. there is not total unanimity on this stock splis stuff. we've talked to other investors, though they were kind of in the minority that say because you can buy fractional shares, you know, people who participated, i don't think that's the same as, you know, splitting the stock and actually getting in the dow jones industrial average. that's one of the reasons why they're not in the dow, because their share price is so high. and that's a good selling point. liz: right. >> we're going to talk about this tomorrow, free earnings. we're going to have a nice show. as you already know. liz: yeah. we'll have it out. amazon earnings tomorrow and apple and facebook coming out in 12 minutes. when we come back, much more
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straight ahead. we are down about 120 points on the dow. s&p though still clinging to 3 points of gains. stay tuned, we're coming right back. and it won't matter what hit you. what matters is you're down. and there's nothing down there with you but the choice that will define you. do you stay down? or. do you find, somewhere deep inside of you, the resilience to get up. ♪♪ [announcer] and this fight is a long way from over, leonard is coming back. ♪♪ ♪♪
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♪♪ liz: all right. as we look at the markets, it is a mixed picture here. dow is down 150. what was the low of the session, jackie? you know, we're getting close to that, i think. s&p has now reversed. the low for the dow is a loss of 179. the s&p is struggle to stay in the green. russell up 3 points and now the dow transports are still deeply in the red are, down 28. i told you federal reserve chair, jay powell, it appeared got a little annoyed because he had reporters pressing him if the economy's decent, why do we still need to keep buying still la story purchases of bonds? here's where we feel he got a littlage anticipated.
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listen. >> constitute substantial further progress. it's not close. we're hopeful that we will see along this path a way to that goal, and we believe we will. it just is a question of when. so when the time comes for us to talk about talking about it, we'll do that. but that time is not now. we're just not, we're not that far. we're going to act on actual data, not on a forecast, and we're just going to need to see more data. it's no more complicated than that. liz: ooh. let's get to larry kudlow, host of "kudlow." do you know him? a great guy and he head some great moves during the -- made some great moves during the height of the crisis. larry, we have a strong economy. i worry that inflation will run away from us. larry: well, it's a very justified, meritedded worry, liz. i think you're actually right. you know, i know jay quite well. he's a good man, works hard.
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but we never really, you know, he kept raising interest rates in 2018 when there was no inflation just because the economy was i growing strong, and he almost took us into a recession, and i've never really forgotten that or forgiven that. president trump used to weigh in, i weighed in a lot, and we were right. they finally lowered rates, and that led to the pre-pandemic boom. but we'll put all that aside. you're right, the fed is a little too -- if you know the economy's going to run hot, and they're going to let it run hot. that's okay, i'm good with that. but somehow i think jay could refine that message. but it's always a hard thing. right now i'm going to give him a pass, how he's that? but i'm going to give you an a, because your question, your penetrate thing question is exactly right. [laughter] liz: yes. i get an a from professor kudlow. and we've got joe biden speaking tonight. the president is going to unveil at another big plan. this is the american families
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plan which i gotta say, larry, it is another huge check9 that the taxpayers could possibly write if it's approved, and yet a lot of those taxpayers are saying we like it. we like this idea. larry: well, i don't know if that's true. i think a lot of people approve. i don't like polls. i only look at rasmussen or ibd tips poll. i think people liked the first relief plan in january. i don't think the more they learned about this so-called infrastructure stuff with gigantic tax hikes and social welfare spending, i don't think they're going to like it, liz. i think it's going to be a hole lot less popular -- whole lot less popular. i am concerned two things, the speech tonight. one, there's a war on investment on the tax side and, number two, frankly, there's a war on work and work effort. the expansion of the social safety net and social welfare
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programs, they've removed all the work incentives, lizzie. that's a very bad thing. what was done under clinton, you know, with gingrich and it was bipartisan 25 years ago, they are removing that. and i think that is, that in some cays is more important than -- ways is more important than the taxes. it's a very pernicious thing liz: do you like "fox news polls," larry? they show an approval rating of 54%. larry: how much? liz: i know you're, larry kudlow, look at that, devil smile. larry kudlow airs at the top of the hour. see you then, larry, fox business will have full coverage of the president's joint address to congress, first 100 days beginning 8:55 p.m. eastern time. no need to change the channel. we have a very busy day on wall street, certainly one "after the bell." we need not one, but two closers to break it all down.
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wilmington trust chief economist luke tilly, payne capital management president, ryan payne. >> great to be here. liz: ryan, what is the first thing you bought, thinking about buying, now that the fed has spoken once again? >> goes back to what you said, liz, the one thing the fed is not addressing. you have to be living under a rock to not see inflationary pressure. corn prices up 8%. wheat, soybeans highest level since 1993. housing prices up 17% year-over-year in march. the one theme, market telling you, even if the fed is not telling you, that ignoring a pink elephant in the room, don't look at it, it is not there, inflationary pressure is real. you have to have inflationary hedges in your portfolio. that is what i'm seeing most investors are missing. liz: what are they above i get to luke because i need to know. what are you buying? >> have commodities in your
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portfolio. that is direct correlation to prices going up. you want to have foreign markets in your portfolio as well, we're starting to see a weaker dollar. immediate profits become more important than growth stocks like tesla, that have profits priced in for 175 years. so i think old school stocks over new school stocks. whether delta air lines or as the economy reopens. that is great place. i love old school oil. anything old school looks good. liz: exxonmobil reports on friday along with chevron. okay, luke, when do you think that the fed should begin raising rates or at least not get ahead of ourselves, at least tapering the massive bond purchases to shrink down the bloated balance sheet because we're looking to a strong economy, are we not? >> looking at a strong economy in terms of sequential growth but we're still a long way away from the benchmarks they set especially the labor market one, we're 8.4 million jobs in the
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hole. if we added 500,000 jobs a month, we wouldn't get back to pre-pandemic levels until august of 2022. that would not equal the trend. we have people graduating from school. takes a long time for the labor market being fully recovered. we expect some of that inflation to move in, not rampant inflation but enough to raise long term interest rates. we don't expect the fed to hike, steepening yield curve has us favoring value stocks, cyclical stocks, industrials, materials. really things that had been doing well up until the past couple weeks, growth has taken over. we think over the course of this we think it will turn back to values of cyclicals, liz. liz: you have great, pointed comments. thank you, ryan, luke, very jam-packed day. we need to tell everybody, we're heading into the final bell here. what does that mean? means right up to the bell, apple earnings, facebook
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earnings. stay tuned. it is going to be wild. tomorrow amazon earnings. [closing bell rings] you have to watch that go around. that will do it for "the claman countdown" on this federal reserve day, rates remain at zero to quarter of a percent. time for larry kudlow on "kudlow" ♪. larry: hello, everyone, welcome back to "kudlow." i'm larry kudlow. great pleasure. folks, get ready, edge of your seats. president joe biden will finally bite the bullet with a major address to congress and the rest of the country tonight. this will represent his 98 day in office. we'll round it up to 100 day speech. this is completely serious. he plans to reform america's economy, its culture, it is race relations, of course taxing, spending, and regulating policies.


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