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Thank you very much for this. And to learn more , we invite Lou Basenese, a Fox Business contributor, and Jordan Ricciardi, a senior wealth strategist at UBS, to join the conversation. Nice to see you both. Thank you for being here. here with you. Yes, I like it. I like it. This is my favorite country in the world, besides the United States.
Lou, the last time we had a Nasdaq drop like this was in April, on Liberation Day. This is the last time I really seriously invested in this market on a large scale. I usually only choose SPY. Yes. Because the VIX has gone above 30. Today, if we can put the VIX on the screen, it looks like it's up 61%.
This is a volatility index. When it rises, it means that the markets are falling. It grew by 61%. Is it 61 or 62? It's like 67%. Very close to the 30 mark, which is the entry point for you and me, right? entry point. This is a key threshold, but I will say that you did something after Liberation Day that most people don't do, right?
Everyone is starting to get scared. You see red on the screen and run out of the store, even if the items are on sale. And what interests me most today is that it all started with AI stock trading. You saw all these names initially trading on the Nasdaq, but you saw green on the screen in consumer staples, utilities, and healthcare.
And then, throughout the day, sales went up all over the front. So this suggests that this is not a fundamental sell-off where everyone is panicking about some kind of deterioration. It's simple: hey, risk reduction. Let's, you know, risk , risk, fear is high because of the VIX index . Treasury bonds, you know, yields were low because people were buying safety.
So I'm not worried that this will be, you know, the start of something worse . I actually think this will be Liberation Day 2.0 because the market has gone up 50-60% since then. Jordan, unfair question, but I'll ask it anyway. What will happen tomorrow? Look, if I were a female bettor , I would say the market, and I am one.
I am a lifelong investor. That's right . So I think maybe tomorrow we'll fall, but I think next week we'll continue to make money, corporations will continue to beat expectations. We also have an interesting IPO cycle going on. I think we'll have a different story starting next week. But can it stop growth right now ?
I mean, yesterday everyone was saying, " Okay, we're going to have a divided Congress." This is usually good for stocks. This means that nothing will be done. But others look deeper and think it could slow down the economy in some states. You are absolutely right. Yesterday we saw growth because investors initially rejoiced at the divided government.
But today, investors have woken up to a sobering reality. A Democratic victory means less spending on AI infrastructure. So, the question now is, can we achieve such lofty goals at such a valuation and expected returns? And today, many investors said, "No." That's why money has moved out of the technology sector into other areas and into Treasury bonds.
This is a game of safety. Lou, you and I adore AI. I love AI, like everyone else, but we're going against the trend. According to surveys, 70% of Americans have great doubts about AI, especially regarding data centers. But we live with it. They say, "Just not in my yard." I have a data center literally next door.
I live in Manhattan. They are everywhere here. They are everywhere. Many cities have them . Most people don't even realize it. There is one representative from Ohio, from the Ohio Board of Trade . He appeared on Fox Business today. He partially represents the interests of data centers. He promotes them.
But listen to what he said earlier today. Run. Communities should know that we have been building data centers in Columbus and central Ohio for over 50 years. We have been building hyperscale data centers—Meta, Google , Amazon, Vantage, QTS—in Columbus and central Ohio for over 10 years. There was no increase in pollution.
There was no damage to the water supply systems. There was no increase in cancer rates that people are talking about at the hearings. Yes, he is pushing his agenda, but at the same time it is supported by facts . The truth. Winston Churchill said that a lie can travel halfway around the world while the truth is still putting on its pants, and that's exactly what happened with AI data centers, right?
It was bad messaging, bad marketing, and worse—disinformation. The idea that they deplete water resources is fundamentally wrong. Closed-loop systems only need to be topped up once every decade . This is directly from the leaders of the companies that are building the latest. Um, listen, we need smart and responsible policies that ensure you pay for your energy.
But these are things that these companies can afford . Um, I want to quickly make a key point. Listen, we haven't stopped building data centers now . Many of them are in the pipeline, they are being built and will bring economic benefits and new jobs. The question is, what will it look like in 2, 3, 4 years?
What will this pace be? And I think that's what the market rewards. I have to, I have to take issue with you on one point, Jordan, which is the fact that Hinojosa, the newly elected governor of Texas, is talking about imposing a moratorium on data centers. God knows what will happen. By the way, we saw the previous governor, Abbott, very strongly oppose it at the end of his election campaign, saying that data center companies are too arrogant, they haven't spent enough time with the community to assess their needs and what they want.
There is some truth to this, and, again, public opinion is definitely against them right now. No, that's absolutely correct, but I will say that Lou made a very valid point. Much of the data infrastructure is already under construction. You can't stop it. It's about the future of data infrastructure.
So yes, I think there will be a slowdown in infrastructure due to this moratorium, but ultimately, the overall market looks good. This morning, the number of initial claims for unemployment benefits came in lower than expected . Productivity is increasing. Oil has come down a bit, and ultimately, if infrastructure spending is lower, borrowing costs are lower, interest rates remain lower, the Fed may not raise rates in December.
This is a good macroeconomic foundation. Lou, 5 seconds. If the VIX volatility index rises above 30, and it is close to that now, will you buy ? I bought, but I'm a long-term investor , not a day trader. So you don't give up on your long-term wealth plans because of one day's market activity. pay the same amount of capital gains tax as speculators.
I try not to do that. If these democratic socialists get their way , a wealth tax will soon be in place . Okay, great. Be sure to like and subscribe to the latest Fox Business news on YouTube. And you can watch full shows that are currently airing on Fox.
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