Closing Bell - Closing Bell: The Fed's Next Move 8/5/24

Episode Date: August 5, 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.

All right, guys, thanks so much. Welcome to Closing Bell. I'm Scott Wobner, live from Post 9 here at the New York Stock Exchange. This make or break hour begins, of course, with the sell-off in stocks today. It is a substantial one. As fears about the economy take center stage, throw in some turmoil in Japanese markets, and the scorecard today looks like this. With 60 minutes to go in regulation regulation we have substantial declines of more than three percent almost across the board dow looks like it's heading in that direction as well but there's the nasdaq down by near four percent at this very moment the russell well hit hard today as well down about the same amount stocks only part of the story too take a look at bond yields getting a lot of attention today they were were lower as trading began, fears about the economy, but you see a bit of a reversal. There was some better

than expected economic data that did initially help stocks move off the lows as well. But as we said, as we begin this final stretch, it's a pretty ugly picture. Tech, well, the destruction's been there, as you know. I want to show you some of the mega cap names today because they are selling off hard. There's Apple down near 7 percent. Have that news, of course, that Berkshire Hathaway selling near half their stake in that stock. And that's a big weight on the market, too. We're going to ask our experts over this final stretch where the tech trade is heading in the days and the weeks ahead. It does lead us to our talk of the tape. How far will this pullback go? Let's ask our panel. Dan Greenhouse of Solus Alternative Asset Management. Stephanie Link of Hightower. And Ron Insana, iFi AI CEO. Steph and Ron are CNBC contributors. It's great to have

everybody with us today. Steph, I'm going to give you the first crack at this. Carry trade, unwind, recession fears, Berkshire selling half of its apple, all the above. Is that what's the root of today? I think 80 percent is the carry trade unwind. But then the rest, there's a lot of uncertainty. We've been talking about that. We thought volatility would increase over the last couple of weeks just because there's so many things that are unknown. And it is the economy and it is the Fed.

Are they behind the curve? It is the politics, which we haven't really talked about recently, right? And then it is the speed of the bond market and yields. The velocity has been so extreme in my mind and definitely worrisome. Now, put that all together, and where are we on the economy? Because at the end of the day, fundamentals are going to win. They may not win out today. They may not win out in the next week or two or month or two months, especially since we're seasonally in the week as part of the year. But what I would say is

the economy is still growing above trend to 2.5%. Atlanta Fed tracker's there at 2.5%. We know inflation's coming down in 2.5% around. That's good. And earnings are growing at about 10%. So in my mind, I think, is it a soft landing? Maybe it's a bumpy landing. I don't know. But I'm looking at companies that we are in the thick of reporting season, and we're listening to companies and what they're talking about, and fundamentals are actually pretty good. So, Dan, Tony Pasquarello, Goldman Sachs says, quote, I tend to think this is a drawdown within a still decent environment, really talking about what Steph is, as distinct from the start of something more serious and lasting.

What's your take on what we're witnessing today? I don't this the percentage cause, whether it's the the the carry trade or the Fed or whatever it might be, is to me, this is a silly conversation. To me, it's clearly the carry trade story from Japan. The market's down 12 plus percent. The carry trade. How many people have come on the network and overlaid the chart of the Q's and the yen over the last couple of weeks? This should not be a shock to anyone.

Is the Fed behind the curve? Maybe. I mean, listen, I don't think so. Solace doesn't, I mean, we're a hedge fund. We don't put out macroeconomic forecasts. But I can say after this morning's conversation, pretty convincingly that we don't think there should be an intermediate cut. That just seems silly to us. And to Steph's point about the economy, the ISM number this morning was super, super important. And you

knew that even beforehand. If this number was much weaker than expected, then for sure it would corroborate some of those worst fears. But service jobs are 85 percent of all jobs. Service sector is a much larger portion than the good sector. And the number was pretty good across the board. And so I think you have to take solace from that report. You, Ron, went on a bit of a tweet storm starting some 14 hours ago, essentially arguing that the Fed is behind the curve and that they need to act and act now. Well, I think they should say something now. I don't need to necessarily think like Jeremy Siegel suggested that you need a 75 basis point intermeeting cut. I think the Fed should provide some reassurance to the markets.

Remember, Scott, the Nikkei crashed. It's down 20 percent in two days. The yen has gone from 161 to 142 in a matter of a month. And that has created this disruption in financial markets that the type of which I would analogize to 1997-98, where there's a crisis of sorts going on within markets that the Fed should probably step out, assuage some fears, and then cut in September, because I do think they're behind the curve. Didn't they do that just this past Wednesday? Ron, it's only Monday.

Jay Powell on last Wednesday basically set the table for cuts coming in September, called what's happening in the labor market a normalization. Now here we are saying they need to come out and say something again? Well, I would say in the wake of what's transpired over the last 48 hours in financial markets, where we don't know who's blowing up. And as sure as I'm sitting here, when you see a carry trade like this blow up in size that may have started overseas and may have come to the United States, borrow money cheaply in Japan and buy tech stocks, buy small caps, whatever it is. You know, when that type of event takes place, typically it's incumbent upon the Fed to say they'll provide whatever liquidity is necessary.

And if this thing were to spin out of control, to do something about it. We're in the middle of this right now, and I don't think we know fully the extent to which some firm is in trouble and may provide further weakness down the road. We will speak, by the way, with a former Dallas Fed president, Richard Fisher, coming up in just a little bit. Now, whether the Fed needs to come out and say something is, you know, one argument. Ron's not the only one, though, nor is Jeremy Siegel, suggesting that they need to either say or do something. Rick Reeder of BlackRock points out on Twitter on X, excuse me, you know, within the last 20 minutes that the Fed's far too restrictive, given where the inflation picture has moved relative to where the Fed funds rate is, that they need to act, quote, sooner rather than later. He's not saying they need to come out today and do anything, but he's making the point that they risk being way behind

the curve relative to where the Fed funds rate is and inflation. And that's all fair. And I think Rick's exactly right. And to the point the discussion just had, the Fed just said, Jay Powell just said, effectively, we're going to cut in September. And the only pushback I was going to provide to Ron is Austin Goolsbee was on the network this morning. And if someone at the Fed of seniority wanted to say something to the market, it's not that hard to get in touch with Austin Goolsbee and tell him. Jackson Hole is on August 23rd. So that's probably when he's probably going to say something. He's not going to come out before. Right. But to Dan's point, Goolsbee was on CNBC today. I can assure you that many members of the Federal Reserve had no idea that there was a yen

carry trade of this magnitude that was on that was going to be unwound over this weekend and into this morning. I can assure you that that is the case. And so in that environment, the Federal Reserve, if it is taken by surprise by a market related event, does have some requirement to be at least vigilant and examine and explore what's going on to make sure that it doesn't represent unknown risk that is just now presenting itself. And that's fair. But I also just want to add, yeah, the S&P is down three and change percent right now. The equal weight's down 100 basis points less, call it two, two and a quarter. As it should be. And right now, only two sectors are underperforming the index, tech and discretionary, obviously, Tesla and Amazon.

So it's not as if there's this humongous, broad-based dislocation that the Fed needs to step in to ameliorate. It's really concentrated. It's not great, but it's largely concentrated in those names that, for a lot of people, had gotten overbought at highly valued. The other reason I'd argue the Fed's behind the curve, if you look at inflation break-evens, they have absolutely collapsed. The 5- and 10-year break-evens are now below the fed's target so the bond market is screaming for the fed to do something whether i am or someone else is is irrelevant but the bond market is sending a very potent message across the spectrum that it's time for the fed i would also just say that lower interest rates lower commodity cost you still have jobs out there. You still have wage growth

of 3.6 percent. All of that actually speaks very well for a consumer that's held in remarkably well, which is, to your point, the majority of the economy, about 75 percent of the economy. And the ISM services, clearly consumers are still spending on services. And the new orders were really strong. Employment numbers were really strong. So before we get in over our skis saying that we're headed for a hard landing and negative growth, we're nowhere near that right now. Does that mean we're not going to slow further from here? We probably are. But I just don't want to get so totally negative because there are opportunities that are being presented. OK, that's a good question. A good point. So where are the opportunities today? Okay.

Because I haven't heard a lot of people want to step in today if these opportunities are being created. Everybody wants to buy the dip until the dip shows up. Well, no, actually, I think we're lucky that we're in the heart of earnings season, as I mentioned, because we're learning real time what companies are doing, saying, and how they're responding to a lot of these uncertainties. Earnings season hasn't been gangbusters, has it? It's been about 10% to 11%. Actually, that's pretty darn good. That's better than what most people thought. Commentary and guidance has not been great. That's fair. In some sectors. But I'll tell you what I bought today or I added to. Eaton. Because their commentary was outstanding. Their orders grew

9 percent. Organic growth grew 9 percent. Aerospace grew grew 13%. Electrification grew 13%. They're ending the year with $11 exiting the year in terms of earnings. And the stock is down 25% in two weeks' time. And Lamb Research, oh my goodness, that stock just got hammered. In two days, it was down 20%. It's down 32% from the July 10th highs. And the company beat. They raised guidance.

And margins were very strong, up 300 basis points in gross margins and operating margins. And their commentary was also very encouraging about wafer fab equipment spend, AI spend, et cetera, et cetera. We know the stock has gone from 31 times earnings to 19 times in two and a half weeks time. To me, that's an opportunity. Am I going to catch the bottom? No, probably not. But I'll buy a little bit along the way on the way down. That's what portfolio managers do. And to add further context, for every McDonald's that we have, I would add Chipotle and Wingstop. Now, again, I'm not making the case for these stocks as particular investments, but McDonald's had not great commentary about the low income consumer,

as did any number of investors, any number of companies. But there are plenty of other companies that came out with particularly encouraging conversations about the consumer. And I just know it was not a great season. The commentary has been worse than I've seen in a couple of quarters, for sure. How are we going to determine? You look at what's happening with mega cap tech, OK? It's been driving everything, obviously. How do we know whether, you know, the bulk of the selling is over? How do we know how far stretched valuations were if, in fact, you believe that they were? They might not have been, although they might have been overinvested. Right. And so it was a correction long overdue. Absolutely.

I mean, when you have a VIX that shoots to 60 in a matter of days and then drops back down to 30, you're probably talking about, in technical terms anyway, a momentum bottom that may well be followed by a price bottom if you're talking in purely technical terms. I think what's also interesting, Scott, though, is in light of what's going on in the Middle East, the fact that oil prices and energy across the board is down when there are worries even being stated by Secretary of State Blinken that Iran could attack Israel within 24 hours and yet energy prices collapse with this. You know that there's a large amount of forced selling going on. This is the

environment, 97, 98, that could take a couple weeks, maybe a couple months to catch that price bottom. But obviously opportunity sets arise when the VIX spikes as high as it did today in an environment that's not like the great financial crisis when it hit 80. You want to address Berkshire and Apple, since it's one of your largest positions that you've been consistently, for the most part, adding to? Well. I mean, maybe trimming some, but give us your scoop here. I was buying in the spring when the stock

was at $161.70 because everybody hated it and there was never going to be an iPhone refresh cycle and services couldn't be sustainable at 14% growth or 26% of total revenue. And it was just like every day we would get up and see a downgrade or numbers cut. And so I added to it and I made it a 9% position in my portfolio, 300 basis points higher than the benchmark average. And right before earnings, I did trim that 300 extra. So I'm market weight. So I'm still big in the name because I do believe in the iPhone refresh cycle. And I do think that services is sustainable, a double digit growth.

And so and I think AI is going to be a big deal for them. It may not happen next year. It may have it may take place in two years, but I think it is going to be a big deal. Meanwhile, they're buying back a ton of stock. The valuation has come down, not as much as I'd like it to. If it comes down more, I certainly would add it right back and be overweight again. I don't really know Warren Buffett and why he's selling, but what's important is that it's still a very big position.

Sure, but it's still very large. It's his largest. Timing kind of is everything. And for somebody as legendary as Mr. Buffett to have been sitting on a mountain of cash for so long and now making that mountain even higher, one, you know, makes the speculative leap to say, well, maybe he thought prices were too high before to deploy that capital and now looks at what's happened with mega cap tech stocks. Apple had a humongous run after WWDC and maybe looks at the greater picture and says, OK,

maybe it's gotten a little bit crazy. Well, and that's one of the reasons why I was trimming to Europe. Thirty one percent since the springtime in the stock alone. But I would argue that he's had an enormous amount of cash for quite some time. And at the peak this year, the S&P 500 was at 19%. So, you know, you've got to just kind of take a step back. And if he's raising cash because, you know, he wants to have the options, whoever takes over after him, they have the options to do whatever they want with the cash,

I don't know. But I do know that it is still a very large position. And I also take the other side of Bank of America, and I will be buying that stock when I'm restricted. I will be buying that stock at one time's book at this point in time with a fabulous balance sheet, good management, cost cutting. So I don't know his positioning on that one either, but I will take the other side. Yeah, they've been selling that stock to Bank of America. And thanks for bringing that up just to make sure everybody is on the same page. You want to weigh in on this Berkshire move and Apple? What do you think it signifies? If anything,

it's all speculation, of course. Yeah. But nonetheless, timing kind of is everything. Yeah. Not having spoken to Mr. Buffett directly, it's a little bit tough. That leaves us to speculate. Sometimes we're forced to do that. Look, I mean, they've made a boatload of money in it. He has always been someone who's prudently, you know, paired his positions and rebalanced his portfolio when appropriate. I would agree with Stephanie, you know, to the extent that there will be other people running this money. Maybe he does want to give them some flexibility and not be tied to positions that pre-existed them. And so I hard to speak on his behalf. You know, he hasn't emailed me as yet. It's happened in the past.

Watch your phone. He might have your information. The timing was quite good insofar as building a cash position right before the market gets hit as hard as it has. Is there a message in here about just these stocks in general, this cohort of stocks?

Did they get way too extended? Is this a mother in here about just these stocks in general, this cohort of stocks? Did they get way too extended? Is this a mother of all buying opportunities for an opportunity that people really believe in? And that being AI, you saw what the CapEx numbers were remarkable year on year for all of these companies. Now, in large part, it was justified, even though the market sort of took issue with certain reports and the amount of money they're spending. Now, listen, unlike Ron, Warren Buffett did email me. He enjoyed the Deadpool movie this weekend. But besides that, he did not tell me anything about Apple. What I will say to to broaden out that part of the conversation, we obviously don't know what what he sold, why he sold it, et cetera, et cetera.

But what we do know is that these to Steph's point, these stocks have had a terrific run over the last couple of months. They're all up at, not nosebleed valuations, but they're fairly expensive. And there are broader concerns. And maybe he just wanted to lighten up because they've had such a terrific run. So for the average investor watching the show, for instance, if anything, it's corroboration. And again, we don't know why, but it's corroboration that these stocks have had a terrific run and the single best investor of all time, for whatever reason, has chosen to lighten his luck. Okay, what happened to this great rotation trade? Money's supposed to come out of the mega cap name, Steph, and go into the Eatons

and go into all of these other stocks that are so sensitive to the economy, the ones that have dramatically underperformed, some of these other cyclical names. Well, obviously nothing's working today as expected on a day like this. But what about that trade? And July was a very good month for that trade. In fact, I gained relative to my benchmark because a lot of people don't own the cyclicals and the industrials and the energies and financials and that sort of thing. And Friday, totally reversed. Everything that worked in July, totally reversed on Friday. And it was just like a blood a bloodbath right so i don't know we're gonna we'll probably settle in here we're gonna see some puts and takes i still think if we're in a two percent gdp world scott which i do i kind of do so if i think that i still think that these companies

that are tied to certain themes electrification iification, I mentioned. Semiconductor build-out. Semi-manufacturing, that's a big deal. All onshoring, reshoring, housing. I mean, do you see where 30-year mortgage rate is today? 640. I mean, that's pretty great. It was at 780 in October. You probably have to get that down to below 6 to see some real demand. But I mean, there are stories here. There are themes here. And some of these stocks have just gotten hammered. So that's why I'm saying there are some opportunities. Is it all going to be cyclical? No, because I'm not even buying all cyclical. I'm buying technology. So I think you want to pick your spots. Let me come back to you about the idea that, you know, the Fed, Jay Powell chair needs to speak.

Do you think they need to act ahead of the next meeting in September? That to me sounds panicky. You know, I don't think they need to do that. They've not done it that way in the past, except during the great financial crisis and during the pandemic. Right. So it has to be the type of thing for them to do something like that. You would have to see systemic risk in our either in our financial system or somewhere overseas that requires a concerted move by central banks around the world to eliminate the possibility that some bank is going to blow up. I think maybe he doesn't necessarily need to speak. He can have a surrogate speak on his behalf. I know Austin passed it out this morning. He hinted a little bit at it, but then drew it back later. But I do, I don't believe an inter-meeting move would be wise here, not in the current context.

Can I just add to this? I find this conversation just absolutely mind-boggling to me. The stock market is almost at a record high, just off of a record high. Valuations are excessive, sure. We're down a little bit. I mean, granted, at the lows, the S&P was down, call it 10% or so, but the equal weighed about half that. The economy is still, to Steph's point, doing OK. The ISM Services Index came out and it grew. New orders went up. Employment went up. And obviously, we already talked about how important that is. Why are we talking about an intermediate cut? The only reason that people are even sort of bringing it up is because the point that Rick Reeder makes. They don't need to cut because of current economic conditions. They need to cut because they're just far too restrictive and they're

going to cause more harm than necessary because they're going to be too late. If they are offsides on August 5th, then they were offsides on September, I'm sorry, four days ago, whenever the meeting was. But just take this into account. So in 1997, they didn't raise rates because of the Asian currency crisis. In 1998, they cut because of long-term capital. 2011, 2015, 2018, there were events that took place that either kept them from doing something they planned to do or stopped raising rates and started cutting because an event occurred that threatened not just financial market stability, but economic stability. If that were this, then there would be cause for an intermediate move. That's right. But we don't know that yet.

And so thus far, would you say what we're experiencing, whatever this is, and we all agree that someone somewhere is having some trouble. Would you agree that this is LTCM or the Thai bot or Orange County? Is this anything like that thus far? Orange County also included the Mexican payslip crisis. And the tequila crisis, that's right. No, not yet. But, again, there's a lot we don't know because we haven't identified who the players are that have been really engaged in that yen trade. We'll have to leave it there.

Thanks for being here. Thank you for having me. It's great to have you on our program and here on set. That's Ron and Sana. Of course, you guys are going to hang around. We've got more to talk about. Let's send it to Steve Kovac now for a look at some of the biggest names moving into the close. I don't know how you pick on a day like today

because there are many. Yeah, let's talk about Kelanova, though, because they're safe from today's sell-off, Scott. After a report Sunday, Mars is in talks to buy the food manufacturer. Shares up about 15% now. Kelanova, of course, is the company behind products like Cheez-Its, Eggo, waffles and Pop-Tarts, everything in my pantry, basically. With today's move, though, Kelanova has a market cap of over $24 billion. Mars, which makes candies like M&Ms and Snickers, is a private company. Now let's move over to crypto because those cryptocurrencies falling hard through the weekend and into today following Friday's disappointing jobs report. And the biggest drop in Japanese markets overnight since 1987. Bitcoin today dropped below 50,000 for the first time since February.

And crypto related stocks like Robinhood, Coinbase, MicroStrategy and Marathon Digital, they're all falling in sympathy as well, Scott. Steve Kovach, thank you. Come back to you in just a little bit for more stocks on the move. We're all over this sell-off, of course. Recession fears one of the culprits for the global market meltdown. That's after Friday's disappointing jobs report. Let's bring in former Dallas Fed President Richard Fisher now. Mr. Fisher, it's good to have you on. Thanks for being with us. Yeah, thank you, Scott. Good to see you. I'm sure you've heard some of the calls made on this network today that the Fed needs to do some emergency action. You laugh, but what's your reaction?

Well, it's a little bit eerie that started in Japan. It was off over 12 percent in Taipei. Taiwan was off over 8 percent. And when I say eerie, it reminds me of 1987. October 18th is when things started selling off in Hong Kong. And of course, we had a dramatic move 20% down on October 19th, 87 here. Now what did the Fed do? Alan Greenspan on October 20th, so the day after the huge downward slope, came in and

said simply the Fed is ready to provide liquidity to support the economy and the financial system. Did nothing else. And I think this business of asking the Fed to react with a cut, I agree with Ron and Sana, who just said, maybe because we've been friends for, I guess, 30 years now, that it would be panicky and it might send the wrong signal. The Fed will always act if something occurs that threatens the credit system or the economy. And it's not clear that what's happened the last few days, including today with the Dow off over a thousand, that's going to impact the economy significantly or threaten the credit system.

If it does, then they would move. And the other thing I would say, Scott, is remember they have the Jackson Hole meeting coming up in two weeks. That's right. That'll be a very interesting session to watch and see what kind of signals that are sent. I don't see any need to move intra-meeting unless there is a threat to the credit system. And we can't say we see that yet after just a couple of days of harsh market reaction. Ron made the point, though, that the Fed shouldn't do anything before September,

but they should say something now along the lines of what you suggested Greenspan did back then, that Fed Chair Powell should come out and say, we will provide liquidity. He said exactly what you say. Should he do that? Should the chair come out today and say, in light of these global developments, the Fed will be there to provide whatever liquidity is necessary,

if it is needed? I'm not sure he should say that today, but he should have it in his back pocket. And again, we have Jackson Hole in literally two weeks from tomorrow. So I think there's no such thing at the Fed as instant analysis. And the one thing I disagree with Ron on, which is rare, is of course they were aware of the Japanese carry trade. Everybody's aware of it. And the Fed brains have been watching that very carefully. But they have to be careful not to just have instant analysis and react like so many people appear to do today. Their job is to think things through, be calm, reassuring,

and make sure that it's not threatening the credit system. We did see a big pop-up in spreads today, triple Cs and junk, and we saw it starting over the weekend. So maybe that's sending a signal. We'll have to see, Ron. We'll just have to see, Scott, and see whether or not that requires some statement from the Fed.

But I'd have it in my back pocket just in case. That doesn't mean you cut necessarily. It does mean you could provide some reassurance by a simple statement like Greenspan made at 87. But this isn't 87. This isn't 20 percent in one day. We'll just have to wait and see what obtains. Do you think they're already too late, though, to cut? The point that Rick Reeder of BlackRock makes today is they're already far too restrictive, given where inflation

is relative to Target and then especially relative to where the Fed funds is already, that they're way too restrictive now and they need to do something sooner rather than later, even if the economy is still in a relatively stable place. I'm quoting from his post on social media a short time ago. Well, Rick is one of the giants in the business. I have enormous respect for him. But again, here I beg to differ. I don't think they need to cut right away. I think there is room for them to move in September.

I'm not of the view that they need, at least as of now, to move 50 basis points or more. Some have even said 75 basis points. I think they've done a good job. Inflation is coming down. We're disciplining further. The economy is still growing, although weakening. And thus far, despite all the criticism that Powell and the committee have faced, they've done a pretty good job.

We're still not landing, and it's not clear if we're going to have a harsh landing yet. We're still not landing and it's not clear we're going to have a harsh landing yet. We'll just have to see. But why would you want to move before September if you have a chance to make a statement at Jackson Hole where you have almost all the other good central bankers around you and see what you can come up with that may be reassuring? Well, I mean, I guess I would only suggest that just because there aren't credit issues today doesn't necessarily mean that there won't be any related credit issues over the coming days, if not weeks, that would be well before. Two weeks is an eternity in anything.

So anything can happen between now and Jackson Hole. Yeah. At my age, two weeks is an eternity, by the way. But we'll have to just see. And again, I'd have something in my back pocket. I'm sure they do if they need to provide reassurance to market. The other thing, Scott, to bear in mind, unlike 1987, when we had portfolio insurance and index arbitrage, which proved to be quite phony, Today, we're much more trading intensive, much more algo driven, much more momentum driven. And you want to make sure this isn't just

a reversal of what we've seen recently on the upside and isn't momentary. And if it's not momentary, then I think you need to think about what you're going to say to do. I mean, Ron's first instinct in looking at the market today, and obviously, given how long he's looked at financial markets on days like today, suggests that somebody somewhere is having a problem and a large one at that. To what degree is the Fed thinking about that? They're monitoring Scott constantly. I mean, nobody has better databases or monitoring mechanisms than the Federal Reserve. So and especially given the fact they let the horse out of the barn, as I've said many times on this and other shows on CNBC, on inflation, they're watching things even more closely than they did before. So it may be they'll have a better sense. I'm sure they are talking nonstop to the

big bankers and other credit allocators to see if there are problems. And if they detect that there are problems, then I expect them to make a statement at some point. Richard, we'll talk to you. I'm sorry, finish your thought, please. Their job isn't just to, Scott, just to satisfy market operators. Their job is to make to, Scott, just to satisfy market operators. Their job is to make sure the economy is stable and the credit system is functioning properly. I hear you. It's good to have you. Great insights, and I appreciate you sharing those with our viewers.

Richard, thank you. We'll see you soon. Richard Fisher, former Dallas mayor and president. Mag7 getting hit, as you know. Deirdre Bosa is following all of those stocks today. Dee? Hey, Scott. Brittle sell-off.

The bears have long argued that lofty tech valuations support the case for a rotation trade. Multiples have certainly been rich and getting richer in the age of generative AI. On July 10, when the Nasdaq hit a record high, this is where the Mag7 stood in terms of their forward price-to-earnings ratios. Now, though, after more than a trillion dollars in market cap lost between them in one week alone, those valuations, take a look, they've come back down to earth somewhat. Now, the latest earnings raised a ton of questions over returns and monetization and Gen AI. CEOs are saying the more CapEx, the better. But investors are increasingly focused and worried about the impact on earnings. Adding more fuel to those worries and the sell off is a report over the weekend that NVIDIA is now delaying Blackwell,

its next AI chip. Meanwhile, take a look at Alphabet shares. This just happened in the last 30 minutes, this ruling. They took another leg lower after losing its DOJ antitrust suit over search. At the heart of the case are Google's payments to Apple to be the default search engine on iPhones. That's a deal worth tens of billions of dollars, one that regulators say lets Google illegally monopolize the market for online search and related advertising. This decision, a major victory for the DOJ and only the first in a wave of antitrust cases against big tech. We'll have to wait longer for the remedies. This initial finding, Scott, is about Google's liability. We've reached out to Google, but we haven't heard back yet.

Okay. Dee, thank you. It's George Abosa. Joining me now, the so-called dean of valuation, Aswath Damodar, at NYU Stern School of Business, a professor of finance. Good to see you today. What do you make of what's happening, especially related to mega caps and the growth trade? I think it's in a sense a correction that we've been waiting for all year because people have

been warning us about this. But I think that, you know, some perspective is needed here. I mean, you look at these stocks, clearly the last week has been horrific. Look at them again, it's a month ago, again, horrific. But you go back to the start of the year. I mean, come easy, go easy. You've added trillions in market cap. You're losing a trillion in market cap. So from that perspective, I think some of this cleaning up is long overdue. So I'm not surprised. I'm just surprised it happened so quickly and essentially in such a compressed time frame. Yeah. The interesting thing of speaking with you, of course, is you're not only a trusted observer, you're a shareholder in many of these companies. So take me inside your own head today on how you're looking at

this pullback, whether it's an opportunity you see or you're simply waiting because you think more is to come. No, all year I've been saying I would not buy these companies at prevailing market prices starting in March, other than Tesla, which I added earlier this year. At the same time, though, I would not be in a hurry to sell them because I think they remain. I mean, in spite of all of the bad news you've heard about them in the earnings reports, they continue to make money. It's relative to expectations they might have underdelivered. But look at the revenue and earnings numbers. They've come in surprisingly close to expectations outside, again, of Tesla, which had that underperformance

in earnings. I just think the mood has shifted. What would have been good news two months ago is now bad news. And that's the nature of markets. And I'm letting it ride in my portfolio. And there's pain in my portfolio. But again, with perspective, I'm OK with that pain. When you heard about the

Berkshire move and Apple, your reaction was what? I think that Berkshire is just overinvested in Apple. Any company that ends up with 30 percent of its portfolio in one company is asking for trouble. That's always been a problem. Now, I think that I'm glad they got out from under the prom before it was, in a sense, too late. So I think they were dealing with a portfolio concentration problem. And I don't think of it as a signal that they think Apple is overvalued. I just think it's a signal that having 30 percent of your portfolio in one company is never a good idea. Well, I mean, they certainly enjoyed the fruits of the run on the way up. Yeah. But I think you don't want to risk an entire company on one stock.

And I think that's always, even when times are good, it's never a good idea. So the fact that they made money on it doesn't take away from the fact that strategically and tactically, it was a bad idea to have that much money in one stock. Did you think there was a direct relationship and maybe as extreme a relationship as appears to have existed between the carry trade and the move in these tech stocks? You know what? Anytime you have a correction, we look for something to blame. The carry trade, central bankers. The truth is nobody really really knows what causes corrections. It's a collection of things coming together at a point in time and a mood shift on top. And I think that there is no one thing that I would point to. I mean, the carry trade contributes, the Fed not acting sooner

contributes. None of them, though, is decisive in explaining what happened over it. Really, I mean, if you look at the triggers, it's been incredibly quick. And a week ago, none of this was foreseen. Today, everybody claims to have seen this coming. So I think that the reality, it's a collection of things coming together and a shifting of the mood that causes these big shifts in markets.

Professor, I appreciate your time as always. We'll see you soon. Aswath Damodaran, NYU. Thank you. Let's get back to Steve Kovach now for a look at the key stocks that he continues to watch. Tell us what you see now. Hey there, Scott. Yeah, shares of Tyson Foods, they're not chickening out today. They're up 3% after delivering strong earnings report. They beat EPS estimates by 20 cents and had a slight beat on revenue. Now let's go over to CrowdStrike, one of the rare tech names that were in positive

territory today. This coming after over the weekend, a lawyer for the cybersecurity firm responded to Delta Airlines allegations it's liable for $500 billion in damages related to that global IT outage that caused Delta to cancel flights for several days in a row. The lawyer for CrowdStrike said Delta declined an offer to have on-site tech support, and the CrowdStrike attorney also noted other airlines were able to recover days faster than Delta did. Scott? Yeah, it is notable. In a sea of red, you do have some stocks in the green AMD, of course, CrowdStrike among those. Hard to find, but that's why you got to look. Steve, thank you. I appreciate that. Steve Kovach, we're continuing the sell-off in the last hour of trading here. We are off of session lows,

not all that much. The Dow is still down 1,000 points, both the Dow and the S&P having their worst days since 2022. Joining me now is Ed Yardeni of Yardeni Research. Ed, it's good to have you. You made the case multiple times on our program. Fed doesn't need to cut. Everything's good. Look at the data and the economy. You still feel that way today? Well, obviously not, Scott. you made the case thank you multiple times on our program fed doesn't need to cut everything's good look at the data in the economy you still feel that way today well obviously not scott uh clearly the issue here in my opinion is the carry trade and uh as we saw the bank of japan starting to raise interest rates and to tighten something that they were resisting doing that really unleashed this carry trade turmoil, in my opinion. And we've seen that clearly in the strength of the yen.

And as the yen is strengthened, a lot of the carry traders had to scramble to cover their shorts in the yen. And when they did that, they had to cover a lot of the assets that they owned. So I kind of view this as very similar to 1987, where we had a tremendous sell-off that was largely internally related to the market. And I think a lot of what's going on now is, in fact, related to these carry trades. And I think once they wash out, and I think it'll happen pretty quickly here, I think the market will stabilize and we'll be back looking at the fundamentals of the economy. And notwithstanding Friday's numbers, I think the economy is fine. The labor market's fine. There were some weather effects that depressed employment in July, and I think we'll discover that in the next few weeks. So just to be clear, you don't think that the Fed should do anything? No, no, no, no.

You're asking me, you know, that was my opinion before what we saw happening here in the credit markets. I think the Fed is going to do something. And I think the markets are expecting 50 basis points in September. And that may very well be what happens if this calamity in the carry trade continues. So I'm not of the opinion that we're not going to have an interest rate cut. No, I understand that. I mean, do they need to do something now? Do they need to either say something or do something before September in light of the

turmoil that you just spoke about? Yeah, I think they absolutely will say something. I don't know if they'll do something. I think what they may they may very well obviously try to verbally calm the situation down. Perhaps they'll mention that from their perspective, the economy is still doing well. But I think they will say what Goolsbee said this morning, and that is, you know, they're ready to help the economy if necessary. And that may very well be necessary coming up sooner rather than later. We'll see. Ed, I appreciate you. Thank you. Talk to you soon. That's Ed Yardeni. Joining us now on the CNBC Newsline is BlackRock's Rick Reeder. He joins

us exclusively. It's good to talk to you. Thank you so much for calling in. We obviously have highlighted, Rick, your post on social media within the last hour. You've heard a lot of the conversation, and I'm sure you've spoken with many people today about what the Fed should do, if anything. You make the argument that it's time. This is what you say. The need for the Fed to move the Fed funds rate closer to four percent to four point five percent sooner rather than later. Are you making the argument that the Fed needs to move intermeeting? So, no, not necessarily. I mean, by the way, the markets are pricing in that they're moving well through that over the certainly over the next year and a half. Listen, I think the funds rate is price strong for if you have inflation. I mean, look at today, the inflation break-even mark of five-year inflation traded down to $175.

You know, it's back to $192. If you've got inflation, the market's expecting inflation well below 2%. The three-month, six-month moving average of inflation is right at two, just above two. And you have an economy moderating five and three-eighths off of 2% inflation. It's not the right number when you have clearly pressure on lower income. You see that in all the earnings numbers that I think you've got to move. Do they have to panic and do intermeeting? No, but I think some communication to the effect of the markets

or we have a market surprising and they are they are they are anticipating moving somewhat i think evolving that communication would be helpful but it but if you suggested that that is is already way too restrictive uh... should they have moved last week are they already too late i do this and i think that that is the ability to get the product the price is wrong in terms of our interest rates are should they have moved last week you know where they set up to move for uh... last week they really didn't set up communication wise to move in july

but should they uh... you should they set up the communications such that in a pragmatic way without panic that you know interest rates need to come down or should come down and Should they set up the communications such that in a pragmatic way, without panic, that interest rates need to come down or should come down, and they're respectful of the fact that the dual mandate is very much in play, i.e., unemployment or employment, you're starting to see real slack. And with slack building and inflation down to target, then you've got to move the funds rate down.

So I think they can set up for it, and I think the communication, they could have pragmatic communication, that they are respectful of a change in where we are in terms of the economy. Listen, I'll say one thing, and I heard bits and pieces of what was on before me. I think the economy's in fine shape. I think it's slowing, and I think it's slowing, and you're building slack, and you clearly have a durable nature to inflation coming down, so the Fed should move the rate to where it's appropriate. But what are you seeing or hearing on your end from those you're

either talking to today or of what you're looking at in terms of the unraveling here of this carry trade? So the first thing I've been coming in this morning and watching Japan move like it did, I mean, that's not that is not a normal condition to see equities in Japan. Now, some of that I think is emblematic of this. A lot of crowded positions. There's a lot of people have piled in the same trades, Japan being an example thereof. So you're witnessing, and certainly over the last week or so, a lot of these crowded positions almost on cue. The crowded positions have come uh... come under some pressure some of that i think it's just a natural you know in the in the month of august liquidity is not great you've got crowding and so you're getting some

rebalance relative that there's some by the right part of what makes this an interesting market is uh... is there some stuff to do with i mean there's so there's some things to trade in the market or overshooting a bunch of places such as where says the global CIO of BlackRock. I had a feeling you may have said. Listen, I think the front end of the U.S. rates curve has moved to an extraordinary amount with a Fed that surely hasn't chronicled their move in anywhere close to that. That is signaling clearly in terms of where that market is, is signaling a recession.

I think the inflation market has come down dramatically. And, I mean, if you look at the move today, I mean, you're talking about where do we go. I mean, you've got 25, almost 30 base points moving inflation today, and now we've rebounded. The front end of the yield curve, if you look at the move, what was it, over 30 base points today. I mean, there are opportunities across these markets where you're seeing some extreme moves and we're taking advantage of some of them. By the way, I would say the same thing on the equity market. I mean, some of the names that have reported good earnings and buying back their stock that are down

mid to high single digits, there's some opportunities in some of those as well. Interesting. Do you worry about what isn't today that could be tomorrow, so to speak? Credit is acting reasonably well in the face of all of this. Do you worry about that changing? How are you thinking about that? So there's a couple of things. I mean, first of all, credit is in the best fundamental shape I've ever seen it, probably in my entire career. They've turned their debt out.

The cash flow coverage is still good. I mean, the high-yield market is not junk anymore. It is in really good shape in terms of credit quality, much more in the way of BBs, a lot of high-yield that's moving up into investment grade. So I think credit's holding up well. Part of what you described, we did some tactical positioning and reducing some of the investment-grade credit because you're going to get a lot of supply at lower rates.

Investment-grade credit, I don't think, is very interesting. I think the high-yield market would still get you a lot of yield with technicals that are really good and fundamentals that are superb. I don't think it's wrong that particularly the high-yield market holds in well. The so-called rotation trade, I mean, as long as we're sitting here worried that the economy is slowing much faster than either people thought, and including the Fed. Is that trade done for right now, this rotation out of mega cap tech, for example, and into these underperforming, more cyclical areas of the stock market? That trade can't work if we're sitting here obsessing over a recession.

Scott, I don't really understand. You know, the whole idea is there had to be a, you know, with Feds easing so you go into small caps or into value. I'm not sure I understand it. The Fed's just moving from a very restrictive level. By the way, they haven't moved yet. They're moving from a very restrictive level, presumably to a still restrictive level. So this whole idea that I've got to buy into asset classes that are, if the economy slows, will be harder in terms of from a performance from earnings per second.

That doesn't make a lot of sense to me. Owning some of the defensive names in an economy, by the way, it's not just the economy. You've got geopolitical risk. You've got an election coming up. There are some defensive names that throw off a lot of free cash in some sectors that are pretty attractive. You look at energy today, and there's some opportunities in some of those places. Where there are some, you know, we were looking today at some of the health care spaces that are more defensive. That makes some sense to me. But just to go into small cap value because the Fed's going from very restrictive to restrictive, that doesn't make a

lot of intuitive sense to me. As your own view on rate cuts evolved since last Wednesday, whereas you came away from Chair Powell's commentary and said, OK, I think they're going to cut X number of times. And now, given this turmoil, you say, well, I think it's actually going to be different now. So I think you have to respect the payroll report was was pretty not only the payroll report, you know, the claims data was a bit softer. You know, if you look at the Joltz report and you look at the actual hires versus openings, that was a bit softer. So I think at the margin, you should assume that, gosh, the Fed, clearly the other side of the mandate away from inflation has shown real building of slack. And so can you move a bit more? I think so. I mean, you know, we've talked about on your show a bunch of times to own the

five-year part of the yield curve, whereas the fulcrum point of the yield curve, where the Fed could clearly bring down where rates are going to get to over the next couple of years or so, that's still attractive. And, you know, I've said it before, owning yield in that part of the curve and just sitting on that yield makes sense. The belly of the curve, that's what you've liked for an awfully long time. Yes, sir. Yeah, no, still, I will say we've made quite a move, and so we've lightened up a little bit, but, yeah, I still think it makes sense.

Rick, I'm going to let you run. I can't thank you enough for sharing your wisdom with our viewers on a day like this. Thanks. We'll talk to you soon. Thank you. Thank you, sir. That's Rick Reeder of BlackRock joining us. We're in the closing bell market zone now.

CNBC Senior Markets Correspondent Bob Pisani is here with us, along with Solis' Dan Greenhouse, Hightower's Stephanie Link, to break down these crucial final moments of a rough trading day, to say the least. Phil LeBeau is looking ahead to lucid earnings in overtime. Kate Rooney is following the moves in Amazon today in the fintech space as well. I'll turn to you first, Bob. Thanks for making your way up to post nine. You want to give us your opinion, thoughts on what you've seen from start to near finish? This really was something at the open. There really was a whoosh. And there were signs of a selling climax at the open. I don't know if this is the bottom, but it was pretty amazing.

You look at the industrials, you look at technology. The XLK, the technology ETF, down 7% at the open. That was an amazing whoosh. Look at the low print there. We were down 7%. By 12 o'clock, we were down, what, 1.5%. That's an amazing number. And what was interesting to see was all the consumer staples were up to flat at the open.

You look at a Procter & Gamble, for example. That was 170 at the open. There's consumer staples. What are Procter & Gamble? It's 170. Look at that. And all of those stocks were up. And as the market turned around, as tech started doing better, they started selling off consumer staples. So there's the tug of war, the recessionary play right there. They can't decide right now. If we're going to a recession, you want Procter & Gamble. There it is. But wait a minute.

Maybe we're not going into a recession. Tech starts coming back. Let's sell Procter & Gamble and buy tech. They're fighting this out. And the answer is we don't know. And the market doesn't know. And there are people that are on both sides of this. That's why this is such a fascinating day to watch right now.

All right. So, Steph, you've given us your thoughts at the beginning of the program, and now you've in totality had the opportunity to hear what the Yardenis of the world, the Rick Readers have had to say. What are your thoughts now? Well, I will just say that the Russell 1000 growth is losing to the Russell 1000 value to Dan's point earlier about the market cap weighted S&P versus the equal weight. So you are seeing a return to the laggers that we saw on Friday. We'll see if that lasts. We have a lot of data to get through. We have a CPI print next week, a PPI print next week. We do have Jackson

Hall. And so I think you're going to still see volatility. I still say you use that volatility where there's good fundamentals, good cash flows, good management teams that have navigated themselves out of problems before really high quality blue chips on sale. And it's not just technology. I don't know. You heard Rick Reeder. I'd love your reaction. It sounded like he didn't believe the hype to begin with, with the rotation trade, which was really predicated on the idea that the Fed is going to cut rates, yields are going to fall for the right reason. And thus, those are the stocks to be in. Has to fall for the right reason. That's right. I have to be right at two, two and a half percent. And the earnings still need to come through. But it's not just I'm blanketing,

owning cyclical, Scott. We talked about themes. There are some very, very powerful themes that are happening that are decades long, including AI. But also we talked about on-shoring, re-shoring, et cetera, et cetera. So I think you want to be careful in terms of what cyclicals you own. I'm not in small caps. I'm in quality industrials, quality energy. He likes energy. That's cyclical.

I'm in quality semi-cap equipment names. And also, as we mentioned before, rates coming down, that's good for the consumer. That's good for corporations. Commodities are coming down. That's positive. Unless it's all too late for a consumer that's already tapped out as it begins with. I don't buy that they are tapped out. I just don't. They still have jobs. I know Jolt's was disappointing, but there's still 1.1 jobs available for one unemployed person. Well, Starbucks, McDonald's, it's a lot of commentary. We could get into that. Well, Starbucks has issues, way overpriced.

McDonald's. The coffee or the stock? Both. They have issues. Listen, to Steph's point, the issue for the consumer is one of jobs. And at the end of the day, to reiterate a point that Steve Leisman's making on air, 114,000 jobs in virtually any other environment is still pretty good. Is it less than we thought? Yes.

Is it impacted by the hurricane a bit more than the BLS wanted to believe or convey to the market? I think so, probably to the tune of somewhere around 35,000 to 50,000 jobs. So as long as the job market is still strong, even though it's not as strong as it just was, I think you still have to have a positive outlook on the consumer. And again, I will meet your McDonald's with Chipotle. I will, you're $400 billion for Deadpool this weekend. Shake Shack? Shake Shack's results were great. Stock was up a lot. Also has some of its own issues. But at the end of the day, I think the consumer is still doing okay. The credit cards have largely echoed that point. And I think it's important to reiterate. Steph, you mentioned energy

and I know you got to run diamond back. Yeah. Earnings are after the bell. Yeah. I mean, yeah. And it's done well this year. It's pulled back 10 percent from its highs, but it's still up 20 percent on the year. It's had a good year. And I think that you're going to continue to see them reducing costs. They cut rigs. They're cutting crew. We already know their realized losses from the derivatives and that sort of thing. We already know their realized pricing. So it's not going to be that surprising. But the big thing I want to talk about and listen to and ask questions about is Endeavor, because that has totally changed the company. They're now the number three player in Permian. That's where you want to be. This stock trades at 10 times forward

estimates. If it's down, I'm a buyer. Can't thank you enough for coming in here, Steph, sitting at post nine with us. We'll let you run because I know you have to go. Phil LeBeau is watching Lucid. They're after the bell too. Phil? Scott, we're not expecting a whole lot from Lucid. The expectation is for a sizable loss yet again.

The real question, three things you really want to watch if you're a Lucid investor, and these are tough days to be a lucid investor given where the stock is. What's going on with the cash burn in liquidity? Ended the first quarter with about $4.7 billion in liquidity. Is that eroded? Is it about the same? What's happened there?

Inventory levels, they were a little elevated at the end of first quarter. And then what's the update when it comes to the next vehicle, the Gravity SUV? Keep in mind that their Q2 deliveries, they were a record high, in part because they slashed their prices. That's some of the good news there. And then there's also the question of the restructuring that they announced in May. I think they cut 600 jobs as part of continuing to say we can do better in terms of our costs. We get those numbers shortly after the closing bell. And then Peter Rawlinson comes up next hour on closing bell over time. Scott, back to you. Phil, appreciate it as always. Phil LeBeau to Kay Rooney now on what's taking place with Amazon

today. Some of the fintech names to tell us. Hey, Scott. Yeah. So the Amazon story is partially what we've heard about with big tech sell off. Some are blaming the carry trade and the AI narrative unwinding. But then you've also got some fears around the consumer. So Amazon's core e-commerce business is very much exposed to weaker spending. CEO Andy Jassy really reminded investors of that on the earnings call last week, describing customers as cautious and that lower revenue forecast is not going to help in this uncertain environment, especially as it's planning to bulk up that spending to compete in AI. And then you got fintech, a pivot here, but one of the weakest subsectors within tech. PayPal, Block, Robinhood, all in recent years are starting to look a lot more like banks.

So they've got credit cards, they've got cash accounts, and they make interest income. That's increasingly important. They're now more exposed to weaker spending and lower interest rates. Robinhood is the biggest laggard of that group. It's also some outages overnight thanks to a trading partner. Schwab and Fidelity also saw some downtime today. They say all of those have now been resolved. Scott, back to you. OK, Rooney, thank you so much for that.

Turn back to Bob Pizzai. I mean, the great unknown here, I guess, is on a couple of fronts. Number one, what's the ultimate fallout from the unwind of the carry trade? Who may be hurt and where and to what degree, if anybody, in fact, is, and whether the deleveraging is finished. Right. We don't know the size of the in-carry trade. This is a problem. You know, people have taken stabs at this.

It's trillions of dollars. We don't know. One thing is for sure, that Nikkei down 12%, that is not a discussion about the GDP of the United States going from 2% to 1% and taking down global stock multiples. No, that might be worth 2%, 3%, 4% decline, not 12%. That is the yen carry trade unwinding. And that is a stark smack in the face about how big this is. And nobody's paid any attention to it.

On the recession, if the assumption of the recession is wrong, earnings are not wildly overvalued. We're 15% growth in 2025. Maybe it goes to 10%, but that's going to be fine for overall. The S&P can handle 10% earnings growth. The important thing is the market could be a buy again, potentially, if we just settle this recession fear. And I don't think we're going to be able to do that anytime soon. Bob, we went from last Wednesday, okay, the chair of the Fed set the table for rate cuts in September. He was dovish, undeniably so. Stock market liked it a lot. So here today

on Monday after a jobs report that was, I don't know, concerning to some, we've decided we're having a recession? Yeah, that's exactly right. I mean, that's where we are literally in this. That's right. And we gained this out today. We were talking about multiples of 19 on the S&P on Friday. If you take it to a recession multiple, take it, say, to 15, which is the lower end of a recessionary multiple, and, you know, go to 5% earnings growth, you could be at 3,800. You could gain out all sorts of numbers between here and the high 3,000s, depending on how you feel about earnings. And if you tell me where the GDP is going to be six months from now, if you say it's 2% six months from now, we are then arguably oversold.

But if you say we're going to be 0% six months from now, now you've got all sorts of issues. Even though, you know, look, the Fed chair himself spoke about the difficulty in reading GDP to try and decide the current health of the economy. It is the labor market that they are focused on right now more than anything else. This seems to be that there's a fear in the market that the labor market is going to crater or is in the process of doing that at a time when the chairman of the Federal Reserve says it's simply normalized.

Well, listen, Paul Samuelson, I think it is, has a very famous saying that the stock market has predicted nine of the last five recessions. There's an inherent volatility in equity pricing that gets exposed. I mean, it's all the time there, but it gets exposed in moments like this. So the part about the labor market, I think most economists will tell you that the unemployment rate, while lagging, is the single best all-encompassing number for the labor market and what's going on. I would put forth jobless claims given its timely nature, but an unemployment rate that is moving up two-tenths in a given month and has been increasing for not all immigration reasons. There are people losing their jobs here. This is the argument, should be more worrisome to the Fed. And I think that's the message that a lot of people in the market hold. I don't think that's entirely accurate as

of yet, but again, that's what the equity market does. You wake up tomorrow morning and you are thinking about what more than than anything else. You see the futures. Who knows what they're going to look like. But the story you need to know most about first thing tomorrow morning. This part of the earnings season is a lot of consumer focused companies. And I want to hear what those guys have to say. If there's any weakness beyond the lower-income consumer, we know that already. Additional commentary on that front, not particularly helpful. But is there something going on here that the companies that have reported thus far haven't seen? Do we need to hear from the Fed? Caterpillar and Uber tomorrow.

Two nice cross-sections of the industrial and consumer stocks we'll get tomorrow. We'll get our news. The argument was made in certain places on this program today. The Fed, at minimum, needs to say something, that they're watching what's going on, that they'll provide any necessary liquidity should that be needed. Richard Fisher, the former Dallas Fed president, said on this program that Powell, Chair Powell, should have the notes and something written in his back pocket

and may have to break it out. I'll tell you what I'd like to hear. Are they surprised by the magnitude of the move in the Nikkei, for example? It's reflective of what's going on with the yen carry trade. I don't think they, I'll bet you they were surprised. I was shocked. I'll bet you they were shocked, too. And that, to the extent that that caught them off sides, maybe you're right.

Let me ask you a quick question. We've been doing this a long time. Do you think the Fed coming out today in 2024 and saying we'll provide liquidity carries the same weight that it did in 1987? No. Because we, well, why? I would argue because we already know that. Well, we already know what?

That it was the Fed would step in if something went. We've got 30 years of them doing that. Fed words are powerful. I think you know that. And I'm just saying, is it as powerful as some people want it to be? We shall see what the next day brings. I'll look forward to being here with you

to cover all of it. We're watching stocks here hit towards the close here, about 15 seconds or so to go. We'll be red substantially so across the board. Looks like the Dow will be down about a little more than 1,000 points. Quite a day.