Closing Bell - Closing Bell: DoubleLine CEO Jeffrey Gundlach 6/12/24

Episode Date: June 12, 2024

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.

You're listening to Closing Bell in Progress. That was Fed Chair Powell following the decision on interest rates. Welcome to Closing Bell. I'm Scott Wapner. Let's show you the markets right now. They have been extending their record highs today. The S&P and the Nasdaq on track for new closing highs. The Dow is at the highs of the session now, even as the Federal Reserve has taken its own forecast for rate cuts

down to one this year from three back in March. As is customary, we are joined exclusively by Jeffrey Gundlach. Only today we are live in Los Angeles with the CEO, CIO and founder of Double Line Capital. Thanks for having us here. It's good to see you. Thanks for coming, Scott. So what do you make of what you saw and more importantly, what you just heard? Then big news, obviously, is the forecast down to one cut from the three we had in March. That's right. I think that's what will be remembered in this meeting,

in the history books. In past meetings, there were new ideas that were brought out. Remember, we had super core inflation was brought out at one meeting. There was three-month and six-month annualized was brought out. This one, they actually had to do the SEP, and so they had to adjust things a little bit. But he was remarkably vague in the Q&A session, basically saying, I don't know what's going to happen. And he did mention that he can't wait for the labor market to really show signs of weakening. He doesn't want to break things just to fix them, let them break and then fix them. But I think that's pretty contradictory. If the labor market is strong and stable and you're not going to wait until it starts weakening. I don't see that to be consistent with

dropping from three cuts to one cut. But the market seems to be completely focusing on his tremendous balancing act. He's the word balanced a lot of times between the labor market, which is weaker but not weak enough, and then the inflation numbers, which have kind of stalled out at about, well, it depends what you look at. There's so many different inflation numbers. But, you know, I think that the idea of getting to 2% is really interesting. And he actually brought this up very late in the press conference, and that is that the core CPI was at 2% for a very long period of time, almost in a perfectly linear fashion. And that happened all the way until, of course, the pandemic.

And then we had this spike. And so now the inflation rate is more like 2.5% for the past 20 years and almost three percent on the core PC for the last ten years so you can have pick and choose what inflation did you look at one way to think about it if you're really serious about this two percent idea over the long term and he did bring it up you would actually need inflation for the next ten years on the core CPI to be 1% per annum to get us to a 20-year run, to get us back to that 2% trend that was in place pre-pandemic. So I actually think implicitly what we have here is a growing acceptance of a higher baseline inflation rate. It seems that we're,

he said 2.7 is not that bad. I think he was quoting the PCE. So I just feel like the market is very fond of the fact that hikes still sound rhetorically like they're completely not being considered. You've said most recently you're still looking for one cut this year. Does that hold today, given what you saw in the data and what you just heard from the chair? I actually think I'm less confident there'll be one cut this year. I almost feel like the Fed is going into a reactionary mode. They're going to react much more volatile and quickly, I think, if the data starts to get bumpier. I just feel like he wants to, he's almost a trigger finger, it seems to me, on deciding whether inflation

is going to be acceptable, that he can cut rates, but what if, you know, what if there's some other problem? I feel like he would possibly go to, in the future, possibly go to Fed hike rhetoric. I think that's a potential. Even with what he said today about the report, the CPI today being better than almost anyone expected, those were his words. It was better than anybody expected. He said they made good progress. We're getting good results here, he said as well. It feels like he's building the case for cuts. Certainly they've been tilted

towards cuts ever since, I would say, November 1st, which started everything off in this rally. It was reinforced, I would say, at the last meeting where it was quite a surprise to the market. There was a fear that there would be more talk about potential hikes, that it wasn't all skewed towards rate cuts. And I feel like that was walked back a little bit today, but you have to get out a magnifying glass and look at the rhetoric. But I don't know. I think that the labor market is weakening. It's not weakening in a way that's alarming, but the unemployment rate has been going up. The household survey looks pretty bad. I mean, part-time jobs is negative. Full-time jobs, rather, is negative year-to-date on the

household survey. And he tipped his hat to the fact that we have highly contradictory data. That's because we have a highly inconsistent economy. And I think that's a theme that's been developing in commentary across the board, that some levels of the economy, those that are needs-based consumers, are getting crushed because the things that you need are still very high in price and they're not going down. It's the same thing with the money supply. We talked about this before, where the M2 was spiked dramatically in the pandemic response. And then it went negative year over year. And everyone says recession's imminent because it's negative. But the amount

of money is still a lot. M2 is still way above the pre-pandemic trend. And although people focus on this excess savings theme, the fact is that the M2 money supply is growing again, and it is still way above the pre-pandemic trend. So they're still sloshing around. It's just not evenly spread in the economy. I've been using this analogy. It's from not this CPI report, but from the one from last month. I didn't have time to do the slicing and dicing because we're doing the show today. But the inflation rate is very different depending upon what your lifestyle is. One thing, you know, used cars was the big drag on the CPI a month ago.

But used cars don't affect anybody. They probably affect Hertz and Avis, but they don't affect even 20% of the population. Whereas auto insurance, that thing's been getting all the play, and it's up 22% year over year. Well, that affects every single person that drives, you know, because you are forced by law to have it. And it's not a one-time buy like used cars. It's every day, in essence, you're buying car insurance. Same thing with health insurance. What's happening societally is we're getting greater dispersion of outcomes. For example, if you just put four kids through college over the last 10 years, you've had a massive inflation rate if you were paying for your kids'

college. In my situation, I'm doing assisted living for my parents over the past 11 years. The price has gone massively higher. So the inflation rate that people are experiencing is very different than the indices, the on-average stuff. And I think that's true across the economy. And I commend Jay Powell for talking about that, the fact that the lower 50 percent of our economy is very, very stressed out. And the higher on the economy is obviously doing better with financial assets, doing better. Do you do you not believe that the economy is as good then as Chair Powell would suggest today? He used the word solid on numerous occasions. He talked about parts of

spending are picking up. The consumer is still strong and the labor market is, by all metrics, still healthy? Yes, I don't know by all metrics. One thing that's happened is we're talking about economic data reports and they're always backward looking. And then we get monthly data that ends up filtering into the quarterly GDP reports. And the monthly data is observably weaker over the past six to eight weeks. Like the economic surprise index has gone way down. Economic momentum is down. The unemployment rate is up to 4%, almost. It's 3.96.

But this has been a very long time period of the unemployment rate being stable. It's 28 months now that the unemployment rate has been at or below 4%. This hasn't happened since 1967 or 1968. Well, there are many people who thought we'd be in a recession by now. The fact is we're not, and that they thought the unemployment rate would have spiked a lot further than it has to date. Well, the labor force is shrinking. The legal labor force is shrinking. And so the labor

participation rate is going down. And so when you have the labor force participation rate going down, it causes stresses to the economy because you're having more and more people that are takers rather than payers. And I think that that's very slow to evolve, but I think that's underway. And I do think that we're going to see, if I did my own SEP, I would not have the unemployment rate where it is now at year end. I think I would have it more like at 4.4. And I think that's enough to cause a little bit of consternation about the lack of this. It's almost like we've had this sort of Goldilocks-ish stability in GEP and in the inflation rate after the big scare. But inflation will come down, I think, further,

as long as the quit rates continues to fall, which has been falling rapidly. It's not at an alarm level yet. I think that if shelter prices come down, which they should, because the inflation rate was in 2022, was way higher than what was reported. The shelter and housing was grossly understated because of the way it's constructed. But it's going to come down because the national rent roll is now 0.6 year over year. It's nowhere close to what they show is the shelter, the OER. If you actually want to be sort of optimistic about the 2% goal, I can do a magic trick for you. There's actually not a terribly complex way of looking at the inflation rate that gets you to 2% right now. It's just core CPI, less shelter. That's it. It's at 2% right now. And shelter's coming down. The other thing is if

oil prices go down, we would see further relaxation on inflation. Right now, the correlation that's the strongest for, say, the 10-year treasury yield is WTI. It's been extraordinarily strong. If it goes down, if for some unknown reason oil goes lower, and I'm not sure fundamentally it's supposed to, but I just have the sneaking suspicion that there's going to be organized pressure to get oil prices down for the election. The chart is interesting that we're looking at of the 10-year yield actually moving higher following the statement. And, Chair Powell, we were, you know, 425 earlier today, so we're moving up a little bit. Steve Leisman, our senior economics reporter, has know, 425 earlier today. So we're moving up a little bit. Steve Leisman, our senior economics reporter, has come out of the room now. He did get the first question to

the chair. And I feel like once again, Steve, we had a more hawkish statement, maybe a more dovish Fed chair. You asked the question, too, that the statement and even the forecast for PCE by the Fed, in your words, seems to ignore the better data that we've gotten recently, including today. Were you surprised by that? I was, Scott. It feels a little bit like the Fed came out of its hole in March, saw its shadow, and kind of went back in and said six more months of inflation. I think they sort of ignored the progress that we've had in April and May. Now, I get that they were somewhat spooked by what we saw in January through March, but it

seems increasingly clear to me that what we saw in those three months was very much residual seasonality. Jeff was talking earlier about the change in motor vehicle insurance that now has come off. It did seem like a beginning of the year adjustment to price or catch up from the increase in auto prices in the past. And Jeff brought us something really interesting that I'm just wondering about right now. I'm wondering if indeed the Fed even has a bias to cut anymore. I don't know that. It feels a little bit like there was something of a coup of the hawks inside the committee when it came to the statement. It said, no, forget May,

forget April. All that matters is January, February, and March. And then also, forget what we're seeing, and Jeff talked about this too, this cross. Inflation's been coming down. Unemployment's been ticking up with 0.6. I get that the payroll number was high, but we look at the unemployment rate to see the ratio of those who want jobs to those who can get them. It has been ticking up. Jeff's forecast of 4.4 for the unemployment rate, by the way, is exactly the forecast from the Fed survey we had. So yeah, there is this tendency. Now, I think you're right to pick up. things did change if the data showed this weakness powell would change but right now the forecast of the fed and the statement seems to me to be

really seriously scott leaning on the hawkish side yeah really good insight uh steve leesman thank you you want to opine yeah on that i i think he's just spot on and just about everything he said i'd also want to point out that and i think he kind of alluded to it but didn't fully articulate it, there's a seasonality to the inflation data. And it's strange because it's supposed to be seasonally adjusted. And yet, over the last 14 years on average, and it happens most years, so it's not that it's just the average.

It's also quite consistent over time. The first quarter is by far the highest inflation quarter, followed by the second quarter, followed by the weaker in the second half. And that fact was ignored November 1st when they did the rhetorical pivot by doing the three-month annualized that we're taking, second half types of numbers and annualizing them. But it's quite likely that that seasonality will continue. And particularly, Steve's right on when he says the auto insurance thing is very important because some things are adjusted at year end. That happens with rents a lot. It happens with auto insurance and things. And I believe that we're going to see the inflation rate settle in on the

headline CPI. We have a model that's quite simplistic, but it's been very helpful over the years. We think it's going to settle in at about two and a half to two and three quarter percent on the headline CPI throughout most of the rest of this year. So Chair Powell said, hey, 2.7 on the PCE. He didn't quote it as the PCE, just called it inflation. He seemed content with that. And if this headline CPI settles in on that, you would think that they would be, maybe would have gone to two cuts instead of one. So the one does have a little bit of a hawkish tilt to it, but the contextualization with all of the rhetoric shows to me that I agree with Steve. I'm not really sure that they're biased to do anything anymore.

I think that they're waiting and seeing, and it was abundantly clear by the repetition during the press conference of You know the dual mandate. He's been on this scene for the whole hiking cycle, but he repeated himself kind of An astonishing many times today So if you don't if you don't know truly then what the the bias is anymore from the Fed then what? Investment decisions would you make as a result? And would any of your prior change as a result of the ambiguity you're seemingly suggesting exists today? We've been for a while now operating under the investment theme of higher for longer from the Fed. And higher for longer means that you can expect very good returns out of certain parts of, say, the fixed income market.

Like today, double B bank loans, I've talked about this in past appearances, double B bank loans are very low risk and they have a spread that is about 290 basis points over SOFR. So you're talking about yields with an eight handle. So even if the Fed cuts once, twice, you're still talking about something that is very attractive and the risk is very, very low. And I think that what I take away from Powell's Q&A today is that you're probably going to be earning that eight handle yield for a while now. And the default risk is very, very low. So the bond market has been incredibly stable. We've seen the yield curve at negative 45 basis points or so, twos, tens, and it's still there with all the gyrations that we've had. We had the 10-year Treasury go from 3.9 up to 4.8. The yield curve

didn't move twos to tens. I mean, some days, but on a trend basis. And now we've had the rate come all the way down to four and a quarter, and it's still at that level. So the market seems to be saying, I don't know what's going to happen either, but we're biased to think that the economy is going to weaken and the Fed, you know, on the margin is more likely to cut. But I think the odds of cuts obviously went down today because when you go from three to one, that's newsworthy. Then why is the equity market, do you think, reacting the way that it is? We're likely going to put in new closing highs for both the S&P and the NASDAQ once again. Well, yields are down a lot this week on the 10-year. That's spurred things. The inflation data today doesn't hurt at all. The stock market really needs rate cuts, I think, to sustain, or they need the earnings projections for the coming 12 months, which have

been upgraded. I think that's helped a lot. They're up about 14 percent now for the S&P 500. That's a big number. And I worry about that, but that's in the psyche of the market right now. Does it need the rate cuts, or does it need the belief that there are going to be eventual rate cuts? And frankly, nothing that the Fed chair said today leads you to believe that the next move is not a cut, does it? No, the overall takeaway from today's meeting and press conference has to be that there's more like odds that the next move is a cut. But those odds have gone down. And I also think that they're, I'm just going to repeat this. I think they're going to, I think the rhetoric from the Fed is going to change fairly dramatically between now and year

end, because I don't think this data is going to be sideways to the extent that it has been. I think the economy is going to be weakening. I think employment is going to go up to 4.4. And I think that's going to be enough to change the way they're looking at things. But when we started this year, I remember the pricing in the bond market was seven cuts this year. Can you believe it? Seven 25 basis point rate cuts. That just seemed crazy. Feels like an eternity ago. It seems almost impossible. People could have thought that. And yet the bond market hasn't really changed very much this year. But are rates then done for the most part going up if you think things economically are going to weaken a bit from here? My game plan remains the same. And that is that rates that rates peaked for this cycle back in October of 2022, I guess it was, or 2023. But 2023, they peaked.

And I thought they would start falling as the inflation rate came down. And that happened. And I think we've seen the peak for this cycle in the longer-term bond yields and probably in the Fed funds rate. But I do believe that when the next recession comes, the Fed will act much more aggressively than they think they will. And I think that it will be problematic and that we will see significant reactions at the long the long end, to inflationary fears and excessive treasury supply. The one thing that's helping the bond market and what hurt the bond market last October was there was tremendous net supply. There was auction after auction. The bond market couldn't digest it. That's down a lot right now. So the supply problem in the near term isn't that bad. But I think in the economic weakness that will come one day, it's like waiting for Godot, you know, waiting for the economic weakness.

But when it comes, I think we're going to have a scare on the government reaction being inflationary again. You still sound skeptical that Powell is going to be able to pull this off, that they're going to get the soft landing that the market seems to be placing its high hopes on. Are you still looking for a recession? Yes. It's a question of when. It's been a long time coming. Many of the recession indicators flagged a year or two years ago. But this was a crazy cycle with all that government spending and then the retraction of the liquidity. But I felt like Powell himself was less confident today than I've heard him, I'd say in about a year. Interesting. Because he seemed to have some mojo back in November, and I think he seemed to be pretty confident the earlier meetings this year.

This was like an economist talking, not a private equity guy, which is more of his background. You know, he's sort of like, on the one hand, this, on the other hand, that. I don't know what to look at. It's not one thing. I just felt like he said almost nothing today. Well, doesn't he have to balance the balance? He has to balance the risks. Right.

Sure. He said that specifically about cutting too late, but he's cutting too early. But clearly in past meetings, there's been there's been meetings where he's shown up more hawkish than people thought, more dovish than people thought. This one, he didn't. He just seemed a little bit, wanted to keep all of his options open. So that's why I think Steve is on to something, which is I'm not even sure that they're truly biased to cut. They're sort of biased to biased, to be biased to cut, is I think where they are. Let's run through a few investment ideas. Gold,

we talked about it before. Yeah, I've been bullish on gold all year. It had coming off one of its worst day in some three years. Well, that was the employment report. Yeah. But it's back up to, you know, twenty three hundred plus handle. It's still quite strong. It's a 15, 17 percent year to date. I just think it needs to take a break. I mean, it went up over 20 percent in about four months. So that to take a break. But I believe gold is a worldwide economic thing, central bank thing. I think it has to do with worldwide indebtedness. And I think gold should be accumulated on weakness for sure. And even at the level today, I think it's worth dollar cost averaging. I own gold. I've been positive.

That was my real asset pick at our Double N Roundtable Prime first week of January. I had no idea it was going to go up so much. But that's the way markets work, you know. India seems to be a hot pick lately, though you've been talking about it for quite some time. Do you still like it? Love it for the long term. I wouldn't even look at it. I would buy it and don't open your statement because when it goes down 20 percent, and it

will from time to time, don't sell yourself out. I think India will be the strongest. The Biden administration, the president himself repeatedly makes the comment that the U.S. is the strongest economy in the world. That's obviously not true. India is probably the strongest economy in the world, at least on a present basis and going forward. Their manufacturing economy has a lot of tailwinds and their demographics have a lot of tailwinds. So that's my number one long-term buy and hold. INDA, it's an ETF. I don't have anything to do with it, but you can buy that. Speaking of President Biden, you've been critical of him. You posted on X recently about what you called chaos at universities.

Yeah. The wars in Ukraine, Gaza, the interest expense on the debt. Does that mean you're supporting former President Trump in the upcoming election? I don't support, I've never supported a presidential candidate personally. I've never endorsed one and I don't give any money to them because I've got other things to do. But I think the problem that the Biden administration has is they've glued together a group of constituencies, and a lot of them are ethnic groups, a lot of them are socioeconomic groups, a lot of them are immigrant versus rural versus, you know, city versus rural. But what's been revealed with the Israeli Hamas situation is when you glue constituents together, they're not monolithic,

and they don't always agree with each other, even if within the subsectors, they're somewhat homogeneous. But you've gotten to a point where some of these constituencies are exactly on the opposite side of this issue, Hamas and Israel, and it's sort of starting to fall apart. And it's sort of metaphoric for the tensions that are clearly building within the country. How many times do you read our institutions are falling apart? I used to talk about how that would become a number one news item. I talked about it 15 years ago, but now people are saying it out in the open. You know, people don't believe in churches anymore. People don't believe in the Justice Department to the extent that they used to. People used to think the FBI was absolutely,

you know, unquestionably excellent. But the former president, in some ways, some would suggest is the one who is attacking the institutions and criticizing. Oh, I don't think it's I don't think there's any one source of this. I think it's just the fact that we have so much wealth inequality and we have so much power that's concentrated in an ever smaller group. And people are starting to realize that they're being ignored by what they used to think was the establishment. This is a lot like 1968. I did a webcast yesterday, and I entitled it 1968, because I was talking about how the lack of cooperation that led to a lot of difficulties around that time period are in evidence today. And I think it's sort of the volatility of

our perceived reality. You know, when you're a kid, at least when I was a kid, you think that everything's going to be the same forever. Nothing will ever change, but things always change. And then you get to my age now, I'm going to be 65 this year, you realize nothing's off the table. Everything can change. And I think everything will change in the next four to six years. Given your concerns about the deficit, the former president wants to double down on the tax cuts. They're going to expire. He wants to renew them. Would that be a good or bad idea? I think it's a bad idea. I think to expand the deficit at even a higher rate than we're doing right now is suicidal. Perhaps four and a half trillion dollars, according to some estimates.

In a fiscal year. Yeah, well, right now we're running at two trillion. So then the interest expense... That would add, renewing the tax cuts would add $4.5 trillion to the deficit, according to the Senate committee on the budget. Over what time period? That I'm not sure. They usually use 10 years. I'll take the over. But nonetheless, it expands the deficit. Absolutely.

And you think it would be a mistake. And the interest expense, absolutely. And I think the interest expense is underappreciated. It's getting more attention, but it's underappreciated. It's going up a lot, and it's higher for longer. And one cut instead of three, if we're going to use that as a base case, this means that the interest expense is going to go much higher. We're going to be over a trillion dollars in interest expense soon on the deficit. And when a recession comes, historically, in the old days, the deficit

would go up by 4% of GDP. In the last three recessions, they were worse and there were weird situations with the pandemic. They went up by 9% of GDP on average. But let's just take the middle of that and say it goes up by 6 percentage points. We'd be looking at a deficit of like three, three and a half trillion dollars per year. And that is not serviceable. And so we're going to have to work on solutions. And that's going to involve restructuring the unfunded liabilities. And it's going to be interesting to see how they manage the Treasury debt, because they made a big mistake when interest rates were held at zero forever and long rates went down to about one and a half to two percent they should have if they should have borrowed at those levels but they didn't because 25 basis points was cheaper than one one and three-quarter

percent and it's always short-termism but we should have planned on that and we'll see what happens as this stuff comes rolling off I'll just remind everybody we have between this calendar year and the next two, $17 trillion of treasuries that are being refinanced. And many of them are going to be 400 basis points higher. So this is going to be a really big issue. I doubt it will affect this presidential election, but it's going to be front and center in 2028. We will see you next Fed meeting. I appreciate you having us here at your headquarters in Los Angeles. That's Jeffrey Gundlach of Double Line Capital joining us live. Thank you. Thank you, Scott. Up next, another big pop in Apple shares. As you know, the stock is

rallying once again following its announcements at WWDC. We break it down next. back in los angeles we're now in the closing bell market zone cbc senior markets commentator mike santoli here to break down these crucial moments of the trading day plus steve kovac on apple's second day of record-breaking gains and christina parts and evils looking ahead to broadcom earnings they are out in overtime today but steve kovac it's you that i'm going to begin with today because these have been two pretty remarkable days for Apple shares. Yeah, that's an understatement, Scott. I remember you and I were in Cupertino just 48 hours ago watching the stock go down on those artificial intelligence announcements. And then all of a sudden, just overnight the next day, we saw the street just really accept it and say, you know,

these artificial intelligence features are going to drive more iPhone sales. They're going to, they are new, they are novel, they are exciting. People are going to want to get their hands on them. Because keep in mind, Scott, the big story here beyond what the AI features can actually do, it's the hardware that they can run on. Right now, unless you have an iPhone 15 Pro, you're not going to be able to use it, plus some newer iPad and Mac models, of course, but it's the phone that matters the most. So we'll find out for sure in the fall if people are going to really upgrade for those AI features. And just over the last couple of days, just some more reporting on these AI features, that I want to mention. Not everything is going to launch on day one on iOS 18.

That's especially true for the ChatGPT partnership. All they're saying right now is that's going to come later in 2024. Same for some other features, Scott. All right, good stuff, Steve Kovach. Thank you very much. Christina, I know NVIDIA, it sucks all the oxygen out of the room, but Broadcom, they are going to report earnings today in overtime. Tell us what to expect. Broadcom is also considered an AI darling,

but that's because they're the go-to custom AI chip designer for tech giants. And although I have to say many aren't expecting the full year guide of $50 billion to change with this earnings report, there is hope that $10 billion number, it's an AI revenue number the company provided last quarter, will go up, driven by billions of dollars in spending promises from who else? Hyperscalers like Google and Meta. Two of those are Broadcom customers. But it's not just about chip design for this company. 40 percent of Broadcom's income stems from stable software revenue streams. We know software has been weaker as of late. Look at the IGV year to date. But Broadcom's recently acquired VMware could help offset any type of cyclical trends that we're seeing. So that means potentially a, I'm calling

it a triple threat for Broadcom. Soaring AI demand should help both its custom chip business and its networking business, think Ethernet, where yes, it does compete with NVIDIA. Secondly, the VMware synergies, and lastly, a recovery, possibly, in enterprise chip business, making Broadcom a popular AI play year to date. The stock is up about 34 percent. Options market is pricing in a six percent swing post earnings. So you could see some movement there. Scott. All right. Yep. Christina, thank you. Christina Partsenevel is to Mike Santoli now. And Michael, here we are. We had another Fed meeting. We had a statement and then a news conference from the chair. Stocks are still hanging on to these closing highs for the S&P and the Nasdaq today. We're off the best levels,

though. What's your takeaway? We are. Markets rationally celebrating the CPI number, which is a resumption of disinflation. I do think that we had a very broad rally. A lot of the pressure came off the average stock because we thought we'd get a clear view, perhaps, to a rate-cutting sequence. Didn't really get that in the press conference. So, breadth has come off. I always caution, sometimes it's the next day after a Fed presser when you get the cleaner response. But I think the Fed's operating

from a strong position of flexibility. Powell had the opportunity to take September off the table. He did not, even though he took June off the table back in the early part of the year, March. So I do think you can sort of say they can do what they want. We're one year on hold, and the economy's doing fine, and inflation's coming down, and they have optionality to do what is necessary in the coming months. All right, good stuff. That's Mike Santoli. Closing highs for the S&P 500 and the NASDAQ as well.

So overtime now with Morgan and John.