Traders stay optimistic as stock market's wild ride continues

ABC News' Linzie Janis talks to stock trader Keith Bliss of Cuttone & Co. on the NYSE floor.
11:30 | 02/09/18

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Transcript for Traders stay optimistic as stock market's wild ride continues
Hey guys on an Abbas here in New York it is Friday February 9 and a lot of people are paying very close attention to the markets today. After Dow took two major point drops just this week alone a lot of wildness a lot of volatility in the easily and it is on the floor of the New York Stock Exchange try to explain to us what. Going on here Lindsay lets just start off. With how things look today. Good morning out of actually at the Dow up about a half a percent two thirds of a percentage point right now. Stocks are opening higher after that massive sell off yesterday is looking like. Could be another volatile day he sent the Dow down. More than a thousand points on Thursday that was the sect into biggest one day point drop in history. The biggest ones on Monday you can see the shock and anguish in the faces of the traders down here on the floor. The this stock stocks now in officially in correction territory which means they are down 10% from their all time high that was just two weeks ago on January 26. Nearly two and a half million dollars in wealth wiped out in that time up. Filling the here's that a lot of people are confused about right they see that downward red air out they see the big number is. And they say hey I thought the economy was doing really well that's what I keep hearing about self. Mean what's behind these number. Yeah ironically this stock market here seems to be selling I'm good news a lot of investors we've been spoken speech speaking with its hey that this. Is actually about concern that the economy is doing so well more people have jobs wages and wrote it is moving higher. And other concerns that the Federal Reserve is gonna have to hike interest rate at a faster than expected pace. In order to katic keeping economy from overheating. Rate hikes of how it pumps the brakes. On the economy site actually debris and keep bullets from tone and company is a floor broker here urged greater. At the stock exchange thanks for being with us eat my pleasure let's hope. When he let the sell off township problem. What you were just talking about Weaver's situation report straight all I never give it to those leveled him seated in the lap of in a lack of volume quite frankly. It was on picture books are just waiting for that march that matched mark. Are we got it ironically enough in good economic news jobs. And specifically that we were at the average American workers' wages higher in January the fastest queen's throat pace that nine year. That's right so what's often not represented from the headlines of the underlying data points that you in your site. It's Great Britain through your and you. In minutes or percent it's a little bit hotter in the wanted him most economists were. Guessing wrong. Standing on. And so what they did is that led to a downstream almost a domino effect since of the markets were people think inflation is gonna kick up which means interest rates will have to raise an. He risen faster. Did people expect into things that the stock market does not life is inflation and rising rate environment lacking for. Corporate earnings of people were getting ahead of the straighten and there were some other technical factors outside of the market which really led to Solana. Generally when interest rates rising stock can move in the opposite direction just trying to it explain explain for people in the stock market kind of looking at what's going at say eight to ten months from now. It's not trading on the economy right now it's looking into the future. No that's right should nothing has. Affected the perceptions that inflation picked up certainly. The linkage between inflation in stock prices you have an overheated economy and fed. Raise interest rates and thereby they'll take money supply marketplace you don't have as much liquidity. Market you don't have as much money for companies to go borrow against in the businesses pay higher wages have withered on the news much money in the stock market. Is it valuation. On the discounted cash flows for future. Each company and its investors and traders don't think they're gonna earn more money in the future because of higher interest rates and whistles. We're talking about inflation we're talking about the economy potentially overheating horses so that that have to step in. How easy the top tax cut planes while. But this is one thing that I think the market has to balance against financial conditions have been easy for a very long time driven mostly by our own. US federal reserve bank and other monitored storage room the globe. And now the trunk tax cuts we're gonna have. More liquidity you were available cash for companies to expand their businesses pay worded or bottom line pay workers more. The fear their movies that will boost from tax cuts created an environment we US gets into further debt situation. Which we will. We all know that's going to happen but how will that testing for the economy going forward roads even them been expanding. Our own borrowing. And yet for many decades. As the birds lives to Whitman administration for many decades how will that impact their own economic outlook. Forward people who started fearful that people don't realize between noted analysts intangible obligations to US citizen review. Ten plot against me Social Security but that's an important night. And you at this budget deal had forgotten everything but that's failing so the deficit budget deal they have risen as soon as an experience parishioners in the we ran the military. And that's as an add on to the debt service and the real theories you get at some point. Far worse for investors to stop buying US paper goes good response in this case of course that would be the worst Paulson treatments. Average investor do right now someone that sitting at home worrying about their 401 heck. Well certainly as an old war. If you're 65 who told you can you. The Sox get rid of your that'll fit your 45 year old into the starting pretty. My my perception in my mind it's always been hooked me the stock market it's always been this return of any assets possibly. Keep your hands on whether to commodity upon. Like right now sitting right here that the sell off so violent shows we. Like crazy and he. Against it alternatively use the markets are vastly. I think it's a buying opportunity I do to us that we work mostly we've institutional investors. We're the let us but it's. Six students things when your best opportunities. At the last two years ago buying stocks that are. Back here's. The part of the market dismissed basically threw the baby out about sold everything. It matter part of that was because retail investor convicted mutual fund complexes and in to exchange traded funds in the redeeming their shares therefore. They had to raise cash. When they do that would put complexes capsules doctorates they can. It sounds like you think this action might be dot. Friday's going to be tough today's going to be tough and the reason is because Friday's suit in the investor and her mystery that we it's unlikely that they're gonna come back in and buying. On Friday. You never know we're coming. On Saturday and Sunday from geo political plan. And rank and during the second worst week for the Dallas fans are during the worst week for the Dow since you've got an eight that's right it's gets human nature to have. Urge to go in five would you. You think the world is coming to an instance if that. People should be courageous confident you know grab on to that anchor in the winds because I think this is an excellent buying opportunity. Your values. On down means weakness that names the SP 500 games. And really. Haven't had to turn out well that the selling pressure in the zones choose your return for the one way he definitely should snapped back may not happen today that it will be coming sessions. And collections are par for the course we'd be happy corrections every so often we in the nineteen year bull market practice that's right but you gotta remember and forget. It's been a nine year old market but it hasn't gone straight up. The last time we had agreed to sell off back in August points and sixteen. The market pullback in their health news be very healthy if they clear out some of it's almost you think of it like a forest you know catching on fire area all the clear up the hands. You right side your valuation. Change your perspective on where the market is to be respected and normalcy. Balance that against tap. Interest rate environment and you only invite. Nothing fundamentally change US economy still doing well relatively well as opposed to last year's. Monetary policy still here accommodating. Recovery in the midst of us first quarter earnings season with her fourth quarter earnings season rather witches. By all accounts excellent of the top bunk cells bottom line revenue and none of the fundamentals change this was. The mass sell off again and was because of interest rates that was scorer but there were technical factors and the market which led to the tumbling that actually this week. Is it fair to say that that this is a whole new world that the that the era of rock bottom interest rates may be over and that this correction is part of an adult a wider. A reality check here. I mean listen to eat it if it is true when you when you think that you. Historically the average federal funds rate the rate that. Guys were historically that's been around 4% and its vision on. But they're real and a nominal basis pegged to zero for a long long time. People forget that the people forget that the market went into convulsions spasms and started entering into this very huge monetary policy which murder they're policy would. Britney became a new. When they're buying bonds called Operation Twist the market did not react very well for those things but we just couldn't see what was in game it would. So as we come out of those extra workers after policies or its gonna market's gonna specification. And when we see these photographs that you trader going I. This and just looking like you're shocked at and it anguish having. It's obviously very it's a different situation for every investor but what you guys feeling like the emotions you're going there on the floor. Well a lot of times those pictures taken out of context they're they're not necessarily take pictures of history in the river whose fuel and we. The outside world declined to get a lot pictures of the specialist guys back here group managing in the stocks and individual names maybe something's gone against them in a position to that's right. It may have that reaction or. And they've just lost a lot of money into the system managed in like what's right. Right let's look at these are good but not nightly of them. Thank you very much for helping us put that in perspective keep split from atoning company thanks very much. And on the just at just put it into perspective even more you know stock market that's still significantly higher than they were one year goes to the average 401K investors still looking. At a gain of about 12%. From a year ago the message is don't panic. Don't and a different now that is the word on this Friday Lindsay did it live there on the New York Stock Exchange well I think Lindsay. Thanks solid you for watching as well stay right here for your latest market news a head over to Any time. Better yet download ABC news that we'll send all add information rights to area thanks for watching for now I'm on an Abbas. And the feedback here since.

This transcript has been automatically generated and may not be 100% accurate.

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