Closing Bell - Closing Bell: Historic Fed Rate Hike Fuels Stock Rally 06/15/22

Episode Date: June 15, 2022

Stocks rallying after the Federal Reserve hiked interest rates by 75 basis points, which is the largest rate hike since 1994. Fed Chairman Jay Powell says a similar rate hike could be on the table for the central bank's next meeting as it tries to ease inflation. Former National Economic Council Director Gary Cohn says the Fed left open the possibility that it could get even more aggressive in future meetings and explains why he is more of a buyer than a seller in this market. Jefferies Chief Market Strategist David Zervos agrees and is no longer bearish over the short term. But Morgan Stanley Chief U.S. Equity Strategist Mike Wilson says he is fading the rally and reveals his top defensive plays.

Welcome to Closing Bell, everyone. I'm Sarah Eisen. Just want to show you what's happening with the market. Stocks are rallying. They pretty much rallied throughout Fed Chair Powell's press conference. It seems like we did get that news early on in the news conference, really before the question and answer session, where he talked about the next meeting, where he talked about sort of the unusual nature of the 75 basis point increase. You saw yields, especially in the short end, the two-year go down, saw the yield curve actually unflatten, steepen a little bit. You saw the dollar weaken and all of those things helping stocks rally. It's been the reverse of what we've been seeing over the last few days. Joining me now is Gary Cohn, former NEC director, former Goldman Sachs president, and now a tradition here on Fed Day where the market rallies off of a super hawkish move by the Federal Reserve.

What's your takeaway? Well, I think you characterized it right. You know, the word that Paul used was unusually large. And then he said we could do it again next month. So maybe not as unusual. And then I thought the interesting part of the conference is the question you and I were waiting for, which is the soft landing question, which you got late in the conference. And as you and I said, you know, the runway is getting narrower and shorter for the soft

landing. And then the chairman went out of his way to say he's doing his part on the equation, but what's going to happen on the supply side of the equation? And he's going to need help. And I think that's true. They're going to need help on the supply side of the equation and he's going to need help. And I think that's true. They're gonna need help on the supply side of the equation. Just moving interest rates by itself may not be enough to tamp down inflation. You know we're starting to see the responses that we'd like to see. We're starting to see some

of the consumers pull back. We're starting to see in the consumer confidence numbers. We're starting to see some layoffs in the system. We're not starting to see inflation come down though. We're not starting to see inflation come down. But you've got to see these things happen first. We've got to see the spending come out of the system a little bit. You've got to see unemployment go up a little bit because the wage price inflation has been here. So, you know, remember, these interest rate increases, they don't affect the business world and the markets instantly. Unfortunately, unfortunately, they affect the markets instantly. Unfortunately, unfortunately, they affect the consumer instantly. The consumer feels it in consumer credit. They feel it in

their mortgage instantly. But the effect in the real market and in the economy takes time for it to filter in. So the first few questions, and I would have asked this too early on, which is, can we trust your guidance? You told us last time, basically, that 75 basis points wasn't under consideration at the current meeting. And then in a crazy unusual move, a leak to the Wall Street Journal during the Fed's quiet period changed market expectations, and they followed through with it today. What do we make of the forward guidance question? Well, Steve Leisman asked the question. He literally asked the question about 75 and he got told 50 is where we're going. Yeah. Literally a month ago. And lo and behold, it was 50, it was 50, it was 50 until earlier this week. It wasn't like they leaked out 75

midway into the end of the month. Is that going to be a problem for them? Yeah. Look, they got data last week, although they played down the data they got last week and said they were watching data over the course of the month. As you said, the first, I don't know, five, seven questions were on the reliability and the trustworthiness of forward guidance. And if it's not really forward guidance and it may be just forward suggestion, what value is it? And I think that the chair was pressed on that pretty hard with the opening set of questions. Although, which is why I thought that it was unusual that he went so specific with what might happen at the next meeting, 50 or 75. He didn't rule out 100, but there will be questions. And then at the end of that long answer,

and we're data dependent. Right. So he did throw in. They clearly are. And we're dead. What about the market reaction, Gary? You're seeing buying of stocks. And yes, we have digested what? More than 100 basis points of hikes being priced in the market in the last four days. So it's been a pretty ugly setup into this Fed meeting. I guess the question then is what happens tomorrow? What happens in the next few weeks? Well, you and I were commenting the last three Fed raises. We've seen large rallies in the stock market only to be followed by test of the lows or new lows in between meetings.

You see that happening again? So the question, is this time different? I don't know if this time is different. What I think may be different is we finally have Fed forward guidance and the market in sync with each other. There was a big disconnect between where the forward market was pricing in interest rates and where the Fed was seeing interest rates. And I think that was creating some instability in traders minds and the markets minds creating some volatility, creating a bit of illiquidity in certain markets and the fact that those markets are now tightly related.

It makes you feel better. It makes me feel better. It makes me feel like the Fed has now gotten to the reckoning point. We're not talking to them about being behind the curve anymore. We used to talk about being behind the curve. They're clearly trying to catch up. Forward guidance has caught up. We seem to be more in sync right now. Hang on, Gary, because we do want to bring in CNBC senior economics reporter Steve Leisman, who is, of course, in the room for Chair Powell's news conference, asked a question. Steve, what were your takeaways? You know, I think the idea that it could be 50, it could be 75, we don't know. I was going to play that sound, Sarah, but I thought, hey,

that's not really telling us what we need to know. We're really on edge. I did see overall, if you look at the rate outlook here, you'll see that it came down a little bit. We're now at peak funds rate for May of 23 at 380. It had been 397. So the market, I'm balancing this as maybe a touch dovish. But I think the real issue here was when I asked Powell, hey, there's 3.8% now that you're there and you're closer to where you are, where the market is. What Gary Cohn was saying was in sync now with the market here. Does that get it done in terms of bringing down inflation to the target?

Here's what he said. I think it's certainly in the range of plausible numbers. I think we'll know when we get there, really. I mean, honestly, that would be, you would have positive real rates, I think, in inflation coming down by then. I think you'd have positive real rates across the curve. I think that, you know, the neutral rate is pretty low these days. So I would think it would. But you know what?

We're going to find that out empirically. We're not going to be completely model-driven about this. We're going to be looking at this, keeping our eyes open and reacting to incoming data, both on financial conditions and on what's happening in the economy. Sarah, the market tried to put on and wear for a while 3% as a terminal rate, and that didn't work very well. Now we're going to try to put 4% on and see how that works. And I think there's a real positive for markets here. Not that it says go out and buy, buy, buy on this score here. But if we could have some stability and where all this is going and what the number is that we need to bring inflation down,

you can start to make some intelligent investment choices rather than just speculate. Yeah, a really important point, Steve. Just really quickly. What about the projections that we got from the Fed? Because they changed, too, on their expectations for the economy and unemployment and inflation. Does it jive with what they are doing and what Wall Street is expecting? Well, it certainly makes more sense now, right? I mean, they have the unemployment rate ticking up. They have the GDP rate coming down and they have inflation coming down over time. Before, it didn't make any sense. They had inflation. You know, they had not really taken

account for what was going to happen with inflation. They had unemployment coming down and inflation coming down. Well, that doesn't make as much sense. They may not have the magnitudes yet, but at least they're in the right directions. And of course, Sarah, we will write down in history what happened today in terms of their change in the estimate for the funds rate, a one percentage point increase in the outlook from 2.8 to 3.8. You don't see that in a while. And the question is, what was it who, I forget who asked that, but are we there yet? Maybe we are. Yeah, I don't remember either. But Steve, thank you very much. Steve Leisman. Gary, it is a question now what happens to the economy.

What does a 75 basis point increase actually mean? Well, Sarah, a lot of it was priced in the market. As we said, the Fed has caught up with the market. For consumers who are borrowing money, who have mortgages, it has an effect. 30-year rate is already well above 6%. These numbers filter into the economy very quickly on the consumer side. mortgages, it's going to have it. It has an effect. You know, these numbers, these numbers fill it filter into the economy very quickly on the consumer side. The question is, you know, where are we going? We've seen some consumer sentiment numbers get more negative. We've seen

spending come down. Look, it's going to be interesting here because we saw this big shift from people buying goods to people going back to the normal U.S. consumer buying more services. So we saw it in the numbers in the last quarter. We see people have a lot of vacations booked up for this summer. We see it in the travel numbers. We see what's going on in hotels and airplane tickets. The question I have, and I think we all have this, did people book those trips months ago? They paid for them, so they're going to go. If they had the choice to not go now, would they not go? And they're going to go on those trips months ago. They paid for them, so they're going to go. If they had the choice to not go now, would they not go? And they're going to go on those trips, and when they come back in

August or September, are they going to stop spending? It's not what we're hearing from companies. We did a financial advisor summit at CNBC today, interviewed the CFO of Royal Caribbean. He said the bookings are still coming in so strong, and they will continue to raise prices because people will pay them. I said we see it in travel. If you look at last month's unemployment data, you saw a massive shift in employment from the retail side to the leisure and hospitality side. Leisure and hospitality is growing. But remember, we're growing from a small base. We talk about hotel rooms being full and airplanes being full. But then you ask how many hotel rooms are open today versus pre-crisis level. How many airline flights are out there? So they're running at full capacity, but we're dramatically lower in the capacity that

we have. But the market is telling you that's going to slow. The cruise lines are down 50% year to date. A lot of the retailers are down 30 plus percent year to date. The market is telling you that we are going to go back into percent here to date. The market is telling you that we are going to go back into a more normalized economy. The market is telling you they're concerned about the soft landing. They're concerned about the consumer. We are seeing consumers wear down some of the spending that they had built up during the pandemic. We all know the consumer's financial position coming out of the pandemic was strong. And now they're needing to spend that savings on basically consumer staples. If you look at what the chairman talked a little bit about, what it cost to fill up your gas tank of gas today, what it cost to put food on your tables.

And housing included. And housing. Those are eating into the savings that people thought they would be able to maintain coming out of the pandemic if we didn't have this inflation. All right, two quick final questions. One on credibility. We're hearing a lot about Fed credibility. Where does it stand right now in your view? It's low. It's low.

But they will earn it back quickly. Low because they were late on inflation? Look, it's been low for a while. When we talked three months ago when they did the first raise, we said they were substantially on inflation? Look, it's been low for a while. When we talked three months ago when they did the first raise, we said they were substantially behind the curve. I think most people think they should not have allowed

the economy to get to where it is. They should not have allowed inflation to get to where it is. So they were late on the first move. They were late on QT. People don't understand why they stayed in the easy monetary policy as long as they did.

You take that and you compound on the fact that they re-guided within hours of a Fed meeting, that's not helping their confidence level. But if they get this right, and now it feels like that they're trying to get the numbers in sync with the market, they're trying to align with a more realistic view of where the economy is. They will earn credibility back. People want to believe in the Fed. They want to give them the benefit of the doubt. They're going to have to earn it back. But it sounds like you would fade the rally. You know, you were a trader for a long time. I was a trader for a long time. I was, you know, I never traded equities, though. I ran an equities division. I didn't trade equities.

You know, I actually think that I'm at the point now in the cycle with where the Fed is getting more realistic, where we are understanding their path with what's been done in the equities market. I actually think I'm much more of a buyer right now than a seller. That surprised me. Gary Cohn, thank you very much. My pleasure. Always good to have you here on a Fed day. We are getting some breaking news on vaccines for younger kids.

Meg Terrell with the details. Meg. Hey, Sarah. Well, an outside panel of advisors to the FDA has voted unanimously in favor of Moderna's COVID-19 vaccine for the youngest children, six months to five years old. The vote was 21 to zero in favor of this. The committee is now moving on to discussing and voting on Pfizer-BioNTech's vaccine. That'll come this afternoon, probably not too long

from now. You are seeing Moderna's stock up there, almost 6 percent on this. The FDA and CDC will then weigh in officially. And if they do, that would make vaccines for the youngest age group available potentially as soon as next week. It's been a long week for a lot of parents. Sarah, back to you. All right, Meg, Meg, Terrell, Meg, thank you. A lot of us now asking whether our young kids are going to get vaccinated. Morgan Stanley, chief U.S. equity strategist Mike Wilson will be here to give us his first reaction to the Fed's move in the market next. Next hour, don't miss Double Line CEO Jeffrey Gundlach's reaction to the Fed. That's coming up on Closing Bell Overtime. We are near the session highs up 4 reaction to the Fed. That's coming up on Closing Bell Overtime. We are near the session highs, up 437 on the Dow.

It's the Nasdaq that's zooming up 3.5%. We'll be right back. We are now in the Closing Bell Market Zone. CNBC Senior Markets Commentator Mike Santoli here to break down these crucial moments of the trading day. Plus, Morgan Stanley, Chief U.S. Equity Strategist Mike Wilson and Jeffrey's Chief Market Strategist on the market's reaction to the Fed's three quarters of a percentage point rate hike that we just got. Stocks are higher across the board. They're off the best levels. The Dow is up 650 at the highs.

The Nasdaq is still up nearly 3 percent. Actually, yeah, a little slipping a little below that 3 percent level. Mike, every sector positive in the S&P, consumer discretionary leading, energy is the only one actually a little bit lower. What stands out to you as far as Fed reaction? Well, in general, Sarah, obviously, scene was set for the market to have some ability to show relief if, in fact, the bond market had already gone far enough in the very short term to price in what the Fed was going to do. Roughly got that. I think as soon as you got a glimpse what the equity market always wants is signs of flexibility from the Fed. They don't want it to be dogmatic. So the idea that Powell said, maybe 50, maybe 75 next meeting, and also just the idea

that they're front-loading, not really loading on more expected hikes. All that was more or less in tune with where bonds were. You never know what the initial reaction means. You never know if it's going to actually have a rethink the next day. But we do have a nice rally. We got above Monday's open, but we're not there right now. No, still lower on the week. For more on the reaction, let's bring in Mike Wilson. He is Morgan Stanley's chief equity strategist, has been bearish all year, has been right on the markets. Mike, what did you hear today from the Fed that might dictate the next move for stocks? Yeah, I think Mike did a nice job of summarizing. I mean, we sold off hard into this meeting, both bonds and stocks. I mean, in a way like we've rarely seen, I mean, 10 percent move in stocks in three days and the bond market move was even worse. So the market was very prepared.

They even leaked the story to us. So there's relief here. We're up 2.5% after being down 10%. It doesn't really change our intermediate term view, unfortunately. I mean, I don't think this is going to solve the inflation problem overnight. And it also raises the risk of a recession because you're bringing forward rate hikes even faster. And I don't think it's going to help the bond market. So, in other words, you're in this vice still that we've been talking about all year.

The reason we've been bearish is because the Fed is hiking into a slowdown and they don't really have a lot of options. They have to continue to do that. So what would it take, Mike, to make you feel better, to make you feel that it was priced in, the weakness that we are going to get here in the economy, even potential recession? Yeah, so we've been very explicit about this $3,400 level, maybe $3,500, and that's really based on our valuation work that assumes no recession, but some degradation in earnings from the margin pressure, and then the appropriate multiple. The one thing we've gotten wrong this year was that rates went up even faster than we expected.

And the surprising thing to us, Sarah, is that as rates have gone up, yeah, multiples have come down, but the equity risk premium component of the PE has actually lower today than it was at year end, even though the risks of growth are higher. So we just think the multiple is still too low for us to get excited because, remember, you have to have upside. And if earnings are going to be coming down over the next two or three quarters, you're not going to get bailed out by that. So $3,400, $3,500 on a price basis, we get more bullish.

And then we get more bullish if we felt like we had visibility on the soft landing scenario. I mean, the chair said the same thing. We don't know if they're going to be able to do this. But if we had more evidence that that was happening, then that clearly would get us more bullish. I think the path is certainly narrower after the triple rate hike today. You're talking Broadmark. You're talking about the S&P, Mike. What about the Nasdaq, though, which has seen a lot more damage? And you've got the Nasdaq 100 off more than 30 percent from its recent highs. Has that done more work beyond just the multiple correction

as far as pricing in and earnings slowdown? It really hasn't, Sarah, unfortunately. We just haven't seen the earnings revisions yet to the degree we need to in either index at the index level. I mean, it's kind of surprising to us, quite frankly, that the forward 12-month estimates for both the NASDAQ 100 and the S&P 500 are still going up. So there's work to do on both indices. The NASDAQ is down more simply because it was more extended on valuation at the beginning of this year. And, you know, as we've been saying

all year, we think that the technology sector itself has more risk of payback and demand than, say, the average company within the S&P, which has things like energy and materials that are actually benefiting from the inflation. Where are you hedging? Where are you recommending people go during this time of weakness where we're getting hit by higher rates and, of course, a weaker economy and all those inflation issues? We've been pretty steadfast in that, too. We've just been very defensively positioned, overweight healthcare, REITs, and utilities pretty much all year. We've been underweight the cyclicals for the most part, and we've had kind of an overweight in energy in certain parts of energy like the integrated oils.

And so it's just a very late cycle, classic late cycle portfolio, very defensive, and it's done really well. And so I don't see any reason to change that, particularly after 75 basis point hike today. Well, there is this bullish view that I've heard. I'm curious to get your view on it, that after the 75 basis point hike today and the Fed clearly willing, it's willing, it's going to go far to fight inflation, that it brings us closer to the recession. It brings us closer to where we need to go to bring down inflation. And on the other side of that will be cuts. And ultimately, that is going to be bullish. Absolutely. We're definitely not there yet. I don't want to put the cart in front of the horse. If we're going to have a recession,

I mean, we've got to price that first. So we're not calling for a recession yet, but the odds are increasing. If your bullish view is that you want to buy the recession, I wholeheartedly agree with that. But that's not where we are yet, Sarah. You can't buy the recession before it happens, right? It's just premature for that. So you think that how far? So we're not pricing in a recession at all.

That's your bottom line. Some stocks are. I mean, one of the reasons why I like the defensive leadership is telling you exactly what you just said. Like the market internally is betting that the odds of a soft landing are going down. Like I would say the internals of the equity market are probably saying 50-50-50 on a recession in the next 12 months, whereas maybe the bond market and the yield curve are saying something lower than that. And as I like to say, the best strategist in the world is the internals of the equity market. So it's leaning in that direction. But I mean, don't kid yourself. If we actually had a recession, the earnings revisions are going to be much,

much worse than what we're forecasting. You're probably looking at something sub $200 for next year. And the market's not priced for that at $3,800. I mean, we would trade probably close to $3,000 on something like that. What if inflation numbers start to come down materially? And that's not priced in either at this point because we got a few fake outs there. Yeah. Well, I mean, look, don't forget that inflation, OK, at the end point is probably close to peaking. I'm not sure it's going to come down in the measures that the Fed looks at. That's one problem with what's going on here. Like we may see deflation in consumer goods and areas where there's inventory now building. And that'll be helpful to some degree. And maybe we get some relief in commodities at some point, too, on demand destruction. We'll

see. The problem, though, is that inflation at the endpoint coming down may not be good for margins, right? Because remember, the cost inflation is still accelerating. The PPI is actually still accelerating because of the inventory cost, the logistics cost, and the inventory cost works with a delay. The old life, though, lasts in first out. So we're going to get the cost inventories actually accelerating. And so if endpoint inflation comes down too quickly, like deflation in the consumer goods space, for example, the margins are going to get really crushed like we've seen with some of the retailers here recently. Well, there may be a celebration right now in the markets but clearly uh not changing your mind mike

wilson thank you for joining us with your first take on the fed from morgan stanley thanks sarah appreciate it home builder stocks are lower on fears that those mortgage rates will continue to march higher after the fed's rate hike diana olick joins us diana in recent earnings reports the builders say they continue to have strong demand and strong pricing power. Does that how does that still hold with the Fed doing what it's doing and mortgage rates spiking? Well, the short answer, Sarah, is it doesn't hold anymore. Those earnings reports were about a month ago. And in just the past two weeks, we've seen mortgage rates go from where they had kind of settled in the low 5 percent range in May to six and a quarter percent in just the last couple of days.

And that means that builders are going to have to, you know, come to terms with an entirely new market. In fact, I interviewed John Burns, a John Burns real estate consultant in our financial advisor summit, and he tracks these builders very closely. And he said in just the last couple of weeks, he's still seen builder prices come down. He's seeing a slowdown among the builders. Tomorrow, we'll get the home construction report that is housing starts and building permits. But those are for May. So again, you have to wonder what are the builders thinking right now? Builders sentiment out this morning dropped to the lowest level since June of 2020. Just the very start of the pandemic,

builders are seeing less buyer traffic, lower sales, and their expectations over the next six months are much lower as well. And they're particularly seeing that in the West, which is where so much of that more high-end home building happens, Sarah. Yeah, and we've seen it in the stocks as well. Diana Olick, Diana, thank you. Mike, one of the few parts of the consumer discretionary sector right now that is not trading higher, you've got Lennard, D.R. Horton, and Pulte at the bottom of the list there. What's priced in as far as a slowdown in housing at this point? I mean, I think what's priced in is obviously the peak of the cycle. If you look at their valuations, that clearly says that they

are going to trade with yields. Yields have actually backed up just a little bit. So I would say the homebuilders have already kind of priced in this stutter step in the growth path. What's really complicated, though, is everyone knows it's going to take a hit on pricing and affordability when rates go up. But there still is a massive shortage just in a long-term basis of single-family homes. And so it seems as if there's still a residual optimism that this cycle is going to be somehow different because there is, at some price, going to be demand for more building. Let's hit the broad market. Major averages now well off the session highs, but we are still seeing some sizable gains. The S&P is up 1.3 percent. David Zervos joins us, Jeffrey's chief market strategist. David, Mike Wilson and Morgan Stanley just told us he's fading the rally.

Gary Cohn, former president of Goldman Sachs, said that he's actually leaning more toward being a buyer after the Fed. What was your takeaway about what it means for stocks? So I think, first of all, I think Jay did a fantastic job of outlining why they did this and giving us some guidance into how they're going to operate at the end of the year. The inflation expectation data, particularly the sentiment data that came out from the University of Michigan, I think really got the committee on edge and got them to think that they can't mess around with that. They can't mess around with 40 years of inflation fighting credibility that has been built up from Paul Volcker to Alan Greenspan to Ben Bernanke to Janet Yellen. And I think they're going to be pretty fierce about it. And that's what the 75 tips is. And I think the market,

it's funny to talk to clients earlier this week and bips is. And I think the market, it's funny to talk to clients earlier this week and tell them, hey, I think the market would actually rally on a 75 and a strong Fed telling you they really are on top of this, rather than a weak Fed at 50 bips that said, hey, don't worry about it. We're just going to play fast and loose with these expectations. He did the right thing. He got the right market market reaction we'll see if it holds i'd probably lean a little bit more short term in gary's camp uh we've come a long way down yeah come a long way down you know i haven't been that positive on your show for quite some time i'm curious why i i feel like the the best bullish argument for the market right now is positioning which isn't a very strong argument i don don't know, David, what are you thinking? You know, I think it's a little bit of positioning, a little bit

of fatigue, a little bit of we've come a long way. But I'll tell you, sir, the one thing that's really got me thinking in the last few months about how deep this cut can go as we bring demand lower is just nominal growth. It's so high. We had 12% nominal growth last year, and we're going to have maybe double-digit nominal growth this year with high inflation and modest low yield growth. And it's just hard for assets like capital, real assets, whether it's capital, equity capital, real estate, or commodities, to go down when there's that much nominal income.

So if the Fed gets this right and doesn't do anything too stupid, too draconian, messes up demand much, I think we actually got a pretty good chance of holding some of these levels, at least for a while until we see what happens. But doesn't it really quickly, David, doesn't it depend on a soft landing? Chair Powell was asked about that. He sort of said he still thinks he can do a softish landing, but he didn't commit. He said, I don't want to be a handicapper. And he said there are things that are out of our control as well on the supply side of inflation. What what does the path to a soft landing look like right now? I don't think it matters as much as you're saying. I think the soft landing would be nice, but a modest recession, a couple of

quarters of minus one, minus one and a half growth, the unemployment rate back up in the high fours, maybe low five. We lose the five million extra job openings that probably are way too much out of the 12 million that we have. All that's healthy. So I think the stocks are going to look through a lot of stuff. It's the longest stated asset out there. It's permanent capital. And they look very much into the future. And as you were saying earlier, Sarah, there's an idea that as we get this 75 and we get more aggressive, that we get to the end sooner. So stocks like to get to the end sooner. So I don't know that we've set the bottom in this thing. Maybe we have, maybe we haven't. But I think we've come a long way. And you have to respect how much we've come. And you have to respect that there's a lot of dollars in the system coming

from nominal income growth. And that's supportive in the end. David Zervos changing his tune from Jeffries. Thank you very much for joining us with some Fed reaction and also some applause for Fed Chair Powell. Two minutes to go in the trading day. Mike, what do you see in the market internal? Still higher across the board. Yeah, it's pretty broad too, Sarah. So there is a little bit of a grab back for the risk assets that have been dumped so hard over the last week or 10 days. You see they're pretty much 4 to 1 advancing versus declining volume. That's solid.

It's not really sopping up a lot, you know, a huge percentage of the weakness we've seen. But it's definitely in the win column for the day. Take a look at high yield debt relative to treasuries. Obviously, spreads have widened out in terms of junk bond spreads. It's coming back a little bit. This is a proxy for the spreads. It's not at alarming levels, but it was getting up to those late 2018 areas that did concern the Fed at some point. So that's a little bit constructive, at least in the short term. This is a quarter-to-date look. And then the volatility index really came in, mostly because the Fed meeting's over. So you have a big catalyst out of the way.

We have a big options expiration on Friday. It seems like we're loading a lot of the potential volatility sources into this week. Should have a cleaner market, kind of cleaner positioning into month end when you might get a rebalancing benefit towards stocks. But, you know, we still got two days before that happens, Sarah. Into the close. Just want to point out Bitcoin prices because they actually had been rebounding and now have given up those gains into the close a little bit weaker. We'll keep an eye on that just as a as a risk sentiment kind of barometer. You've got almost almost every sector higher in the S&P right now into the close.

Consumer discretionary leads. Energy is the only sector that is down right now. And the staples are underperforming. Materials, utilities, and health care. That's at the bottom of the list. Discretionary is working. Technology is working really well today. A lot of the beaten down names like in the ARK Innovation ETF soaring. That ETF is up 6.5% into the close. You've got treasury yields off of their highs of the session. That's helping fuel the rally. And the dollar is weaker, all in reaction to the Fed and its triple supersized interest rate hike. That's going to do it for me on Closing Bell.