The First Look - Adam Shapiro, Fox Business

Good morning welcome back to the financials -- boy oh boy we've had a tough week on Wall Street so far Dow down 97 points yesterday. We're still sitting on a -- year to date on the Dow up five point 1%. The NASDAQ is still up twelve point 7% year to date and the S&P 500 up seven point 7%. Been a rocky road largely based on what's going on in Europe. However it seems to be turning around June I see that futures are in positive territory first I would be able to say that quite -- Yeah Nolan and I don't get your party had on just yet -- but it does look good Dow futures up 47 points NASDAQ up twelve. S&P 500 is up nine. The ten year US treasuries even -- and that's at one point 895. Slightly up their gold is down sixty cents and then oil's trading down three cents. And lower than last week it's 96 dollars 77 cents a barrel -- well Adam Shapiro is in New York with the Fox Business Network. He joins us to give us an update on what's going on with the stock market Adam good morning and welcome to the show. And good morning view. You know about 6:30 this morning futures were negative territory in Europe was trading down all of sudden it turned around it seemed like around seven maybe 7:30 this morning things started to turnaround what happened. -- it's getting pretty dramatic here as I'm talking here right now futures Europe what's the point of two things happen when we got initial claims for unemployment yeah. And that was you know it was down a thousand they revised up a match that lets remember everybody was saying it was the largest drop in several decades there's several quarters. But they've revised -- were down -- to -- 400000 the trend is down that's all good the other thing that's happening is that. You're seeing in Europe. In this is a little perplexing but you're trading up today and you're seeing the the English are saying that they're not going to pump more money into the system. Which you would think would have an adverse effect on the market -- but they're gonna hold the line even their teetering on recession. You must -- hands. Part of the must be confident that their confidence exactly and they are very worried about and patient and you also -- -- strong economic numbers out of Germany. Not destroying out of France yet -- compared to that day so it's a little perplexing especially we got numbers out of China which has China is slowing down their export import numbers were not good internal consumption in China is essentially not growing. And Europe is China's largest trading partner. So none of this makes any. Now be -- it does I don't I had to write it right with inconsistencies. Make. But you know we've walks we watch stocks sell off pretty significantly I mean you seem to doubt go from what twelve or thirteen and change down to twelve AC had you know good 56% correction in the Dow. -- -- -- Or -- has pretty good year so far they -- But one thing that is did the good news if you will is the price of oil it's -- a good ten dollars a barrel we've got will this morning votes up a little today against ninety's yeah. Couple things you know a couple things that oil first. The threat of Israel attacking Iran seems to have been removed for the time being. Total that right till November. But the election so that that that's been removed from the president of the price that. The other issues that the dollar we -- treasuries. You know the dollar was gaining strength. And when the dollar gained strength commodities could at a prep school goes down. Oil goes down and that's what we saw and now treasuries -- little bit you know people actually leaving -- -- go back in the spot. Oh -- -- -- checkbook picnic it oil where. You know right now we're watching oil the host city of this. Now but I just attack Vegas it's it just if it seems strange it would I don't understand that when I have many of the get a good explanation for his. Oil down ten dollars a barrel and gold also -- Okay so here's buckled down this is easier to explain because -- like trying to explain -- to -- to attempt later. The problem we gold is that you're getting central banks you can have from our Central Bank we've had different members of the federal reserves they elect. We've seen no immediate need to inject money into the system and political doing deciding list today. And you're seeing the ECB say that to these years of inflation which is what people spot gold right now -- content. -- -- That'd -- if we have because there's still a lot of people speculating that the Fed Ben Bernanke and the Fed will have another round of quantitative easing in July. And from his self preservation perspective that's probably not a bad idea. It depend he -- be more concerned we placating inflation fears and indeed that the formula would be inject money into the system to try to put people back to work you know it doesn't seem to be as. He leans more to let's not have inflation and he does too. Let's put people back to work and remember there's dual -- that the sped up employment and inflation but we don't have. You know depending who you ask you don't have the kind of inflation that would upset that we reserve and try to create inflation. And would tell what are your expectations for Greece what do they look like after they get easy theory they're gonna be booted from the eurozone they're gonna leave voluntarily but they're going to be. -- sitting. The eurozone from most divert from everything I've been able to read their their on their way out. -- looks like a twenty year old college student for hand after the party you know what I mean they are about it -- -- it's been a lot of people you had a board member from the ECB actually it's time for -- to leave the Euro. So no one knows what did -- going to tail when they leave Europe in Europe but it went now ramping up that the apple happen. For Greece it's. It could be calamity but there aren't being calamity look at their unemployment look at what they've had to cut. Root services and have a point happy that they they leave the Euro my date that the socialists to form a government make it -- and all of these austerity plan to heck with the -- Weird we're on it that outright default -- pain -- The very next day. When they've wiped their books clean and there will be. People ready to increase money because that'll have no obligation to know you don't pay -- interest now but but they're better bet than they are at the table for the electable cling to their -- have obligations in the building two billion the year. But what you would get does -- do you do can't plan on getting 8% interest on your money when you know these people don't pay their bills. In make up. -- they don't pay their bills now the dictator built for a good 2030 year -- you know. The you know if you look at the history of default but it Brazil or Mexico -- Tina Tina and all the countries that the -- France you know -- -- -- land bubble with the with the French default mean. If you look at all of the default in history. The lenders are ready to go right back and expect Sony because when you -- -- its claim. You know you've got to try to make the pain and -- period going forward and if you're paying 8% on 50000 dollars. You know you'd -- higher than you might have to pay about what you wiped out billions and billions. He got some that's acquitted yeah it's a. Free cash if you suspect sketch pad and a title and as always choke back yeah. Now going to be texting to watch I remember going to Greece prior to them being a member of the Euro zone. And I guess we're using -- at the time so again you have to get ready to go back to drive. -- -- But here's the thing is that -- I wish I could you view -- -- this is what will happen finance certain but we've never been here before we've never tried to -- the country from defaulting. We've always said let them go bust and clean up the -- that's in the history. Forever. -- -- but and the cleanup we we haven't clean anything up here we -- delay. And no one knows what it means for -- to leave the Euro. Known as the program -- that would be what what happens in Europe what happens with the Spanish thank you you're staying. You know we we don't talk about it a lot the Spanish government -- -- -- that the going to do a kind of what we did this study group and I'm gonna belt wanna I think the fourth largest bank. And then take partial control of that back. What happens with Spain but that happened to Italy Portugal and the right development and and they table you know in the United States it doesn't affect that that's not true as effective or not because invested in has -- -- because we've sold insurance. That a default swaps yeah. On the debt that might be defaults -- That's right we're we're gonna get -- when Greece defaults I I think everybody's gonna wish they'd done this a couple years ago they in retrospect. After Greece defaults are supported the moneyweek pumped into them for the last two years was just you know bad money yet. Do you ever the -- Derrick Rose grant from the Federal Reserve of Boston on your air we do we do thank you should ask you wrote a Paper I read it 2008. About why it's better. Let bubbles to. Collapse coming clean up a new type about the housing bubble but the point you just made -- the game with these that the default. The pain you suffer through these these collapses is just as bad opinion suffer if you try to delay the collapse. Because it's all artificial. It's gonna happen is just a year just delaying the inevitable so. And you see without that the citizenry in Greece is reacting it is not 87 of their people who have committed suicide. Over what they're experiencing there has bestowed this delay in this attempt to trying to keep them from the collapse it has been just as painful. It's going to be worse though you know there there you know the people that are complaining are complaining about wages are complaining about retirement checks and benefits. All of those are gonna go away so you thought your -- you know you're miserable on a thousand Euro per month pension -- to try to live on a thousand -- You know you it's it's going to be even worse and inflation's gonna be terrible increase. I think he added he those are all valid again but I don't think any of us really know what's gonna happen until that. Well will wait and see another it's going to be pleasant no no it won't. Adam we got to run thanks you're Todd capture for our domestic -- -- Shapiro Fox Business Network joining us today on the financial exchange.