we've got it down it's off pretty significantly here 425 points as
investors react to a deepening political crisis in Europe this global sell-off
really being fueled by the prospect of fresh elections in Italy another
election that could turn into a referendum on the entire European Union
and there's a lot of talk about whether or not a European debt crisis is back
I'm Josh Reagan welcome everyone to the intelligence reports
I know as we watch this cell if you see the financial stocks are really leading
the market lower right now this political turmoil in Europe causing kind
of a panic shall we say on Wall Street will Italy actually leave the Euro we
have our all-star panel here to break it down also what is this tell you about
global ISM all around the world I mean it's actually quite similar what you're
seeing in some parts of Europe along with what you see right here in the
United States of America we're on it plus the top North Korean official is on
his way right now to the United States to discuss terms of
the on-again off-again summit is a continent is it not between President
Trump and Kim Jong GaN will this actually go forward we've got new
developments straight ahead lots as we said ABC is canceling
Roseanne following a very controversial Twitter rant from the star of the show
Roseanne Barr we've got some Intel for you but first let's get back to these
markets off 434 and one of their mobility issues falling it all live on
the floor the New York Stock Exchange and oh my goodness it kind of feels like
a deja vu we went through this a few years back Nepal and it all sort of
surfaced right around a similar time and what do you know all summer we talked
about the threat of the EU breaking up in the European debt crisis and now it's
back to haunt us again right that's exactly right and what we're seeing now
is the political turmoil and uncertainty and Colin somewhat of a crisis in Italy
and with that we're seeing markets selling off really there is concern
around the globe about what will happen here there they had an
anti-establishment party they were trying to put together was blocked by
the president by the Prime Minister and with that they were not able to do it
but the question is whether or not there will be votes going forward and as you
noted whether or not they will choose they're really against the the euro and
the eurozone all together so we'll see what comes of that in the meantime the
euro is dropping our stocks here at home you can see the Dow down 432 points it's
moved back into the negative for the year 2018 and we're seeing financials
selling off with that concerns about what's going on in Italy it's
across the board here's a look at our banks you noted that the financials are
among the biggest loggers and look at Goldman Sachs analyst 4% just like JP
Morgan down about four and a half percent
Wells Fargo three and a half percent Morgan Stanley five and a half percent
so the financials in particular getting hit hard as the ten-year bond yield
which recently hit highs has now turned to the other way and now a two point
eight one percent so concerns and also Moody's had already been looking at
Italy for a possible downgrade they have a lot of debt they have a very big
economy and so now we have to see what happens going forward but this reminds
us of brexit and it reminds us of so many years ago during the financial
crisis when we started talking about the pigs all the nations right Portugal
Italy Ireland Greece and Spain so this is now Italy front and center back to
you so much Nicole yeah kind of touch feel like deja vu to a certain extent
but you know no one should be surprised by any of this because you know what
this really is this is a revolt against globalist globalism the the system in
which too many people have lost out in I mean we saw that happen right here in
good old USA right I mean wasn't that in part what this election in 2016 was
about and then lo and behold you see that taking route in the UK and you see
that taking hold in places like Italy Italy which is struggling as a welfare
state with all the immigrants that are coming into Italy right now from African
nations and they're coming into this country and they're challenged to
support themselves and the Italians who are up against it themselves feel as
though they're taking on unnecessary burdens and then you also add on to that
the fact that when they switch to the euro a lot of them had a harder time
selling their goods I'll use Portugal as an example because the Portugal and
Spain as well we're very big in the textile industry and I can remember
being there during the height of the European debt crisis and talking to
Portuguese manufacturers textile manufacturers that had owned factories
it had had some of these factories and their families for many many years and
they said it's so hard to compete because we used to compete on our
currency and we actually had a shot against the likes of China well now we
don't have that shot anymore same thing is going on in Italy not as big as a
textile area although they do have silk in Como right up by Lake Como where I
was married actually but you know for a two trillion dollar economy that that
relies on the manufacturing of some high-end products the manufacturing of
wine and pasta and olive oil and they want to send all this abroad well it's
harder when your euro is worth that much more so maybe they're thinking to
themselves we're better off going back to the lira
I said from the beginning this was an innovative exciting experiment but I
didn't think it would work because you have too many countries the euro that is
if too many countries with too many different kinds of populations different
languages different histories different cultures and you're trying to force them
all together Allah United States of America believe me it's hard enough for
us right now we're increasingly becoming uncover noble so Europe wants to go down
that path and they have no Alexander Hamilton so how will they do that and
what is the future of the euro zone joining me right now Bell Point chief
strategist David Nelson and empyrion Wealth Management president Kimberly
Faust good to see you both I you know I look at it and and while it's so great
to think up this idea of how they can all be united in the United States and
Europe David the reality is is that it takes more than a common currency to
have that kind of unification unquestionably true you need a common
government and that's simply they don't have that and you can't support a common
currency without a common government and you're learning that lesson and it's
translating in all sorts of markets I look at credit default swaps for Italy
right now there's sovereign debt those credit default swaps are explode
right now that's translating this pushing money into US Treasuries here
mm-hmm that translation is just to back up so we explain so because this is a
sovereign debt market right it Italy has to sell its debt it sells people is
throwing their debt a lot of American financial forms actually hold this stuff
which is why we watched today exit question why would they want to do that
very very poorly yeah but as you point out as people look for safe havens it's
actually pushing the yield and the 10-year Treasury money is the US
Treasuries is pushing it into the US dollar that's translating over to our
financial system financial stocks are doing very poorly the dollar going up
gives us even more concern about the oil markets and oil prices you put it all
together you get a really sloppy market and a risk off day like today and it's
pretty ugly though we may actually be able to go to Italy right now at the
dollar it's about a buck 15 to buy a euro right now and those are levels that
we certainly haven't seen not in the last ten months and we've broken all
sorts of support at this point let me ask you Kimberly your thoughts on what I
was just explaining which is that there is this revolt going on that we're
seeing not just here in the USA but all around the world in other words
Americans and Europeans are saying enough like this whole global system
where those with capital are rewarded but labor is unfairly punished it's not
working and so they're trying to take their governments back and you see this
rise if you would in a populist sentiment yeah I I agree but here's the
problem is like you said before or Trish is that you know the euro or the year
the eurozone is many different countries and they really can't support themselves
on their own I mean in Italy has 2.7 trillion dollars in debt that's only
behind Japan and Greece under the third largest economy in the eurozone so you
know them trying to create their own I mean like you said it's hard up in the
united states i mean united we fought we now do we stand divided we fall
so for these folks to try and you know exit it's kind of like blech sit we've
seen this before we see this movie I'm not sure if they cared
there strong enough on their own to do this I applaud them to you know have the
freedom sent in to revolt and to have a better life but but if they kind of you
know isn't everyone going at that point I mean we're already talking about Spain
right now which is looking at the same thing David
you you know you you've got a number of countries over there that are saying
we're this is not this hasn't worked out but tentacles nobody ever thought the
tentacle spread everywhere and even earlier this month you saw the Turkish
lira head I believe a record low and it translates to large cap US
multinationals here in this country the dollar goes up makes it difficult to
sell and it speaks to the fact that domestically based countries companies
in this country are doing a lot better our economy is doing just fine
data points that support that we're the one game in town that seems to be
supporting this whole global okay no don't in that case is this market
overreacting as we watch it now that's off 459 or our investors simply you know
really voicing their concerns and fears about some kind of systemic crisis now
don't forget there's a big difference between say the economy having a hiccup
or a challenge and an actual debt crisis and if we've got the concern about a
European debt crisis that's that's increasingly sort of formulating in
investors Minds then that's a whole other kind of one
well a European debt crisis we can't get it through through it unscathed you know
as as strong as we are right now there will be repercussions but right now I
look here in the economy in the United States hard for me to get really
concerned when I see intermodal and rails areas of our economy that touch
every fabric of our economy doing exceedingly well some companies even
raising prices 15% and can't even meet the demand at this point so it does
spread it is a risk but I think we'll come through it just fine all right
you agree with that Kimberly I do I think we're gonna be fine I think that
the fundamentals of the of the earnings of the companies United States are
strong I think were to be as I said before Trish probably in my opinion
higher in this mark at the end of the year then we will be here okay and
investors would have to remember that you know basically you know three things
they need to be allocation they need to figure out where
their assets are their their stocks to their bonds and where they're located
diversification is your friend always in volatile markets and rebalance you know
rebalance your portfolio whatever limits are down thank you thank you thank you
good stuff from both of you appreciate it
we are following these markets everyone done 865 we're going to be falling
throughout the hour maybe this is a buying opportunity I know one guest
who's on says it absolutely positively is plus next is the summit with North
Korea actually back on the top North Korean official is on his way to the US
right now to discuss terms of the on-again off-again summit between
President Trump and Kim jong-un we have the latest Intel for you next
don't go anywhere is the market increasingly makes its way down 500
points only thinking the grain is coca-cola though
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