Transcripts For CNBC Closing 20240703

Thats where were going to start, because thats where the pain was being felt, but now services green, financials green, tech green, health care is green, as well. We were going to say tech was mostly lower, the gain in nvidia not enough, but as we said, the situation continues to change which is why we have to watch this final stretch is closely. Our talk of the tape, when will stocks stabilize . Are they in the process of doing that. Is tomorrows jobs report the key . Do we have to wait for earnings or beyond that. Lets ask the Wharton School professor Jeremy Siegel who joins us from philadelphia. Always good it see and talk to you. Good to see you, scott. You know, market is changing and a lot of people are concerned were in the most of moving lower because rates move higher. How concerned are you right now . Well, i think there should be no question now that fed should be done. Weve had almost 50 basis points of tightening on the long end since last meeting and by the way, tightening on the long end is far more powerful at restraining spending than at the short end. So, you know, given the uncertainties, again, another theyre going to have the meeting november 1st, two weeks later another potential government shutdown, uaw, all those uncertainties on top of that. All that said the real economy is still, you know, going like fire. Goldman sachs is near 4 on Third Quarter. The atlanta fed gdp is near 5 . We havent seen these figures for a long time. The economy is chugging and thats one of the major reasons why yields are going up because strock strong Economic Growth does make for higher yields. Theres a lot of things out there that can trip things up. What happens if rates keep chugging higher for whatever reason . Because the economy is good . Obviously, a lot of focus on the deficit, amount of supply on the market whether theres enough buyers out there. What if they keep chugging higher . Again, it depends on why they keep chugging higher. If growth looks stronger than earnings well keep up with the higher rates. We have the s p selling for 17 times next years earnings. I mean, to me that is a very, very good price. Extech, selling at 14 times earnings. Europe is selling at 10 to 11 times earnings. You know, a lot of these high rates are discounted in the price of stocks and its my thesis we should be in the high teens, if not 20, for the p e ratio. Given the nearly 10 correction, i dont think weve got that far. I like stocks right now. Well, interesting to hear you say it. You think that multiple deserves to be high. Maybe even a little higher than now. How do you justify what some have said ap easy market to decipher. Were in a qt environment, rates going up and the multiple cant be justified in any way, shape, or form, against a backdrop in which earnings expectations may be a bit ahead of themselves . Well, you know, the truth of the matter is, is that we will see, you know, the Third Quarter earnings coming out soon, but 2024 earnings are basically holding up better than average over the year where they usually do come down. So, you know, right now, you know, i think the fed has to be very sensitive. Theres no question, with Mortgage Rates near 8, i dont want to be in the housing sector. Weve seen what happened to reits again. The regional banks, jay powell has to be getting phone calls from the home builders, the banks. You know, i think we have seen the high of fed funds. What i hope for is that if we do see a slowdown, im not saying were going to, but the fed is just as nimble at reducing those rates as it surged rates in 2023. And if they are, then weve got that cushion with a reasonable p e ratio. I think stocks end higher than they are on december 31st. I have Steve Liesman joining the conversation for a few moments as well, our senior economics reporter. The idea of where mary daly was speaking today, that this, these tighter financial contiditions, are the equivalent of a hike, that now the fed might not have to do as a result of all of this. Do you believe that this move has moved them significantly enough . I believe its a significant move and i think in the face of a significant move, the fed is going to move significantly. If you look at things theyve said, scott, we went back and looked at three key speakers. Mary daly saying conditions have tightened, might do away with a cut. Bostic talking about corporate debt financing, could be drag on the economy. Any official talking about lags is not one inclined to hike. Michael barr talked about the need to monitor the impact of tightening on bank credit, very much what professor was talking about. Im interested in the professors view of my work here. If i look at the 10year, scott, go back to mid july, the 10year has moved by 100 basis points in that time. I can disaggregate it to the following moves. 50 basis points between july and midseptember has been because of issues about issuance a supplydemand question, along with a stronger Economic Growth. 50 more basis points since midseptember has been from fed rhetoric. I think whats interesting here, just to talk about how you began your show, what the fed give, the fed can take away. If it feels like things are too tight or restrictive, it can ease back. Its not taking aware the quarter point cut key for the market. Its the idea of building in more rate cuts next year which they took away in the september meeting and can put them fac inflation comes down and economy koolz. How did student liesman do . He did well. Theyre going to do in the next meeting, once you start going out 6, 8, 12 months, you know, theyre guesses. Lets look and see which way the wind is going. Theyre going to wait and see. If we get a slowdown from all these factors, i think theres no direction to go. Dont forget were in a political year. Theres a lot of political courses. The lending, the small, the small look what happened to small caps because they lie on the banks that are being pressured and community banks, you know, the political pressure is going to be extremely great for them not to keep on raising rates. I think we saw the last one, once the market says you know what, the fed is done, lets hope they loosen as appropriately, but the sigh of relief that the fed is done is going to give the market a rally. Goes back to what we talked about over the last month or so the fed has made a pivot of sorts away from erring on the side of doing too much than too little and making the mistakes that were decades old that jay powell doesnt want to make, to not not want to do too much undue harm to an economy hanging in there and the move in rates on top of that. I think professor siegel would agree my having an english degree would not be a good background for covering the fedefed fed, except it is. Mary dalying day she believes Monetary Policy is restrictive. Bostic, hardly a radical or a pioneer, used the phrase sufficiently restrictive, thats important. Thats the metric that chair powell has used to say, that weve done enough here. I think the other thing that mary daly talked about using this language about risks being balanced. You have to go back to greenspan when he said risks are balanced there was no longer any need for hikes. I dont know that fed is harkening back to that language from 20 years ago, but when risks are balanced theres no predisposition in order to hike anymore. Thats off the table. Just a little bit of argument professor siegel. He is right, the feds forecasts are terrible, however it does set the benchmark for where the market tries to figure out what is the trade here. If the fed is hawkish and i have a more dovish outlook and a reason for that then i make a trade based on the feds outlook. It is almost certainly wrong, but its the benchmark i have to trade against. Yeah. Professor . Yeah. I mean, most certain. I think what youve said, steve, early on, is that neutral rate, you know, which the fed thinks is a half a Percent Inflation corrected, i mean, were seeing real rates, 10year, 2. 5, we havent seen and the economy is still chugging. What is the neutral rate is going up, we saw that in the dot plot and i think that idea is whats being embedded in the long bonds. Its just not as low as it was for 10 years. The economy is chugging along. In the face of these rates. Basic take a look at claims and almost everything. Were moving. I think that that is affecting the fed. Professor, if theres a world of a higher neutral rate that means a world of an economy that runs hotter than we thought, which means a world of better profits . Yeah. Absolutely. Lets just those go together, night. Were getting 4. 5 to 5 . Dont forget, the fed at the beginning of the year said we would barely get to 1 . Weve had two quarters of 2, this quarter of 4 to 5. Were more than twice what they thought. If we can accelerate our long run to 2 to 3 by ai or whatever you say, i mean, that does mean higher rates but higher profit growth. And, you know, equities can withstand that. I think that is one thing thats really important in terms of how to think. Bonds, you know, they dont get the growth. They get the promised return, whatever it is. The stocks will get the growth if ai actually does accelerate growth going into 2024, 25, and 26. Youve taken us to our next segue. Steve liesman i say goodbye to you and thank you for being a part of this conversation. We welcome in now contributor Joe Terranova of Virtus Investment partner. You heard the professor lay out his case this can be good for stocks. Liesman talking about what the fed may be do and what they may do. You need to make the investment decision, you to what . Stocks in q4 will rally based on earnings and weve already been given a glimpse into what is coming with a lot of earnings revisions that moved higher towards q3 which is uncharacteristic relative to the past. I agree with professor siegel and the Federal Reserve should be done. I think the Federal Reserve unfortunately is adding to the bond markets volatility. A lot of people think they should be done, he says they are done. I think they are because of what we witnessed in the bond market . Yes . I believe they are done because what has gone on in the long end of the curve is impacting the real economy. Households, the corporations, the ability to get capital at reasonable yields, thats no longer present. That is going to choke off consumer spending. That is going to choke off capex. What weve wbsed so far this week in the oil markets with gasoline, demand plummeting, evidence to q4, we are going to begin to see that economy is contracting. I understand 3. 7 gdp in q3, looking until rearview mirror. This is an economy that is going to contract significantly. And the Federal Reserve needs to be mindful of that and mindful of what theyve done with the rhetoric and the price of oil is down 10 since the last fed meeting. The fever to break in the move in rates when you need, you know, whether its fed rhetoric or what have you, weakening economy, something has to happen to break the fever. If it doesnt break the stock market is not going to feel well. I never said that i think that fever will break because i think the fever is going to persist. You ask yourself the question who is going to come in and be sig want cant buyer of treasuries. Lower equity prices is what is the catalyst for there to be buying in the treasury market. The jobs report which was weaker. Listen, next week, thursday, cpi is important. Lets not just place solely tomorrow on what jobs report will be. So one way or another, tomorrows jobs report is going to have a Significant Impact on the group because right now we are moving in such a volatile nature in fixed income and thats an uncomfortable place for investors to be in. What about earnings . You have a tick up for Earnings Growth modestly for the Current Quarter and then Fourth Quarter earnings tick up beyond that and beyond. 4 its party time again. Thats where earnings estimates are. You have to decide whether, you know, as an investor you believe in that or not. Thats everything to where you think the market, the price relative to earnings should be trading. And the poison for earnings is leverage. Companies that have Leverage Companies that are in need of leverage, those are the companies i dont want to own. So many come on the network and talk about the importance of quality, but quality is back and proving itself to be valuable in the marketplace. Companies are out performing companies that rely on leverage and i think thats a theme within the equity market thats rare as we move towards the end of the year. Where you have high degree of confidence to invest in the equity market, in energy i have a high degree of confidence in energy if youve seen this remarkable pullback in the price of crude from where it was just a week or so ago. What gives you confidence to invest in energy with oil pulling back and the economy taking a hit from the move in rates. I believe what is going on with the supplydemand imbalance a lance in energy its secular in its nature. Secular in its nature and, in fact, what weve seen over the last several days with oil pulling back, is nothing more than kind of repositioning the market which was at historically long levels when you look at the commitment of traders for speculators. Want to know what Energy Stocks have done over the last week. Down 8 . Almost 8 . Okay. Not only double what you thought, double the under performance of everything else. Yeah. As oil has pulled back, because look, when oil was going up, its not like the stocks went up perfectly in tandem. Now oil is coming down hard, who knows if that continues, these stocks are going down harder than that. Ill pull it up as were speaking, the xle, what youre looking at. There are stocks in the Energy Universe which are more high beta stocks which are down even significantly more than that. But i still believe the fundamentals are strong in the Energy Market and its one of the few places that you can find that type of conviction beyond the magnificent seven because the magnificent seven they are the very definition of what quality is. Jobs report in the morning, a quick thought, after adp, it seems to be binary. Weaker number good for stocks, hotter number no good because you get a hotter number, then you have the risk of rates continuing to go up and stocks continuing to go down, that is fair . Its fair, but i see significant volatility either way. I think tomorrow is going to be a very dramatic roller coaster ride. Well see you. Thanks. Our thanks to the professor as well. Had technical issues at the end with professor siegel. Our question of the day, how many more times will the feds raise rates, one, two, or none . Head to cnbcclosingbell on x to vote. Now lets get a check on top stocks to watch. Pippa stevens is here with that. Hey. Gm shares are hitting their lowest level since 2020 as the wall street journal reports 20 million of the automakers vehicles have a dangerous airbag part. U. S. Regulators are weighing a recall among the largest in u. S. History according to the report. Elsewhere in autos, rivian is having its worst day on record as the ev maker announces plans to offer 1. 5 billion worth of convertible green bonds. Its the second time rivian has sought to raise capital through a green bond in less than a year. The shares down 22 . Pippa stevens, thank you so much. Well talk to you in just a little bit. Were just Getting Started here. Up next, navigating recession risks. Bny melon sonya messkin is flagging serious downside head and parts of the market shes steering clear you have and where shes seeing strength, right after the break. Live from the new york stock exchange. Youre watching closing bell on cnbc. What do you see on the horizon . Uncertainty . Or opportunity. Whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined Risk Management are needed most. Drawing on deep expertise across the worlds public and private markets in pursuit of longterm returns. Pgim. Our investments shape tomorrow today. Opportunity is using data to create a competitive advantage. Its raising capital to help companies change the world. Opportunity is making the dream of Home Ownership a reality. And driving the world forward to a Greener Energy future. [applause] sometimes the only thing standing between you and opportunity is someone who can make the connection. At ice, we connect people to opportunity. Welcome back to closing bell. Stocks struggling a bit again today making a run at positive territory for the close. Well see. Ahead of the jobs report tomorrow morning, of course. Here to share her outlook sonia meskin, welcome. Nice to have you on our program. Everything hang on rates . Is that where this conversation begins and enends . If rates go up stocks have a problem. The data matters too, but sometimes in certain regimes it happens that good news is bad new and we may get that result tomorrow. What is your general outlook for where the stock market goes from here . We are relatively sanguine on the market because a lot hinges on Profit Margins. If the consumer remains strong, Profit Margins remain robust. Of course, rates present an issue and refinancing present an issue, so were cautiously optimistic. One of the issues as rates go up, prices go down, presents the opportunity to a greater extent that has existed outside of the stock market, so its like i go to the bank, i can get more on my cash in the bank andi take less risk than i might take in the market. Bonds might present a better opportunity. Risk we riskreward is skewed. Bonds could present a good opportunity, the strong Balance Sheet that corporates exhibit. Higher risk premium means higher potential returns. You mentioned profits, you feel like earnings expectations have got toon optimistic . Weve had three or so quarters of negative growth, the corner where weve turned, troughed, and now well move up and away, does that sound lodgegical . We had gotten pessimistic and some of the pessimism hasnt materialized. On the other hand, weve had stronger Economic Growth that we anticipated at the start of the year and thats a positive. Soft landing then . Potentially. We think the probability has risen compared to the start of the year, and we also think the distribution are fatter than the market is pricing in. So you say theres more possibility of a soft landing, the rise in rates, though, sort of throws that into question, does it not. Yes. Theres a possibility that i think is being priced in a bit more now of a delayed landing. A landing that, you know, may materialize towards the end of the year and may be harsher than the soft landing. If profits get squeezed, if inflation stays relatively strong, the labor market stays strong and the fed stays higher for longer but feels they need to step on the brakes harder, well in that case, we might get a harsher landing. How do you View Technology with so much focus on the nasdaq and the magnificent seven . How do you view it moving forward from here . Great question. Long duration stocks, softer when the premium goes up. Longer term growth expectations of these magnificent seven are higher as well, and for some good reason. Its a balancing act. How due o you view Utilities Sector no one talks about until you witness the upset to the degree weve had in that space, which has been epic, to say the least. Right. They dont have the growth expectations of ai priced in, right, so that brings them down more when the premium rises. These are fairly safe companies, so that should be a positive long term especially when the cycle turns, as it was at some point. Its good to welcome you to our program and see you soon. Thank you for being here. Sonia meskin joining us at post nine. Up next, trading the volatility. Bill miller the fourth of miller value partners, will break down his investment playbook and where he sees opportunity, if anywhere, right now. As cnbc celebrates hispanic heritage we are sharing the stories of hispanic Business Leaders with you. Heres citis head of investment for latin america. My dominican roots have shaped the person i am today and have allowed me to bring the best of me and my culture to work. Being latino can be your super power. I believe it generates a diversity of thought and inclusion. 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Were back on closing bell. Major averages well off lows since may of 2. Our next guest finding opportunity amidst the volatility. Joining me bill miller iv, welcome back. Nice to see you. Great to see you, scott. Thanks for having me. Where is the opportunity . The markets have been rocky to say the least. Theres opportunity all over the place. Were Value Investors and like to look where the expectation gaps are the biggest in what we think is going to happen and what markets implied expectations are. There are a lot of things throughout that are highly investable and we find very compelling. One of the groups we dont find as compelling are the tech names that trade at 20 to 40 times earnings with massive expectations for continued growth at a time where people are increasingly concerned about the economy. If you look at whats been going on for broadly within the markets the fed has been taking capital out of the system. So capital is becoming more scarce which means rely on external financing, whether its real estate, venture backed deals, those are not doing too well because capital has a cost. Things are working normally again, unlike how they may have over the past decade. There are a lot of opportunities actually out there. We like things that arent invested heavily in the magnificent seven. But the magnificent stock names, you know, obviously, none of which you own, trade at the v valuations they do at the growth they provide having Balance Sheets that look better than the companies that Value Investors are wondering where is the economy going to be, et cetera, how do you answer that . Well, it comes down to the expectations for that growth moving forward, and what sort of continued growth at a massive scale you need to justify the valuations. Apple is a shrinking Company Trading at 28 times earnings. Want own that . Buy back overvalued stock. I dont want to own that. There are things we want to own that might make people throw up in their mouth actually. One name i like here is at t. Trades at the Biggest Discount on a price to earnings basis relative to the market it has. A lot of people hate it and go multidecade low. Guess what . It has a 16 Free Cash Flow yield half coming back to you as an investor and the other half to pay down debt. Theyre doing things with a low valuation and theres a lot of things out there like that that we want to buy. I know you like stellantis and you, obviously, must have an opinion on how the uaw strike is going to turn out and how its going to end and when it might because right now the two sides seem as far apart as theyve been since the beginning of this whole affair. How do you think about that as it relate to the performance of the stocks . Yeah. My only opinion on when that may end is that it will end eventually because the workers need money and the car Companies Need workers. So theres a Good Exchange there to be had. The way i look at it, stellantis trades at 1. 5 times trailing ebit, a low valuation. It is assuming profits will collapse or me might keep printing money, who knows. Its buying back stock, its debt is covered by cash on the Balance Sheet yielding 8 . Yeah, i understand theres a strike going on. That will get worked out. The expectations are so low were getting paid to wait and why not. You feel like thats the better play than either General Motors or ford . I think in a lot of these cases the entire sectors have gotten smacked around. I like stellantis because the Management Team is heavily aligned and carlos is doing great job, great track record executing against the goals and we like that one. Verizon versus at t, we think at t is marginally cheaper but both good bets in this environment. How do you view whats been happening in the bond market with rates going up and pressure on stocks . When that reaches a real significant breaking point . Yes, stocks have been upset by it, but we havent seen any massive pullback in equities by any degree. Some of the measures we look at regarding liquidity are starting to dry up in the past couple weeks, so it is starting to reach a breaking point. We hope we see some sort of tone shift in the next fed meeting to a dovish hold or a cut. The rates are above where inflation readings are coming in. The system works. Theyre taking air out of the balloon here. The system is working, scott. So agree, rates are slowing things down. Bonds are investable again and they werent for a while. The volatility has knocked them down and they are investable again. I think having an actual cost of capital out there in the world is a good thing. It hurts your case, though, does it not, for saying that look, i like small cap and mid cap stocks in this environment because it puts more potential pressure on the economy. Theyre more sensitive as weve seen from the performance of the russell,000. They sure are. Valuation wise they trade at the Biggest Discounts they have to the market. Its important it keep in mind the other prong on the feds mandate is maximum employment or output. The fed does not want to crash the economy. We look at the volatility in the bond market and the expectations for continued volatility in the bond market, that means you have to put less of a signal value on whats coming out around rates because theyre subject to change at any time. The 2 and 10year spread, people say its forecasting recession. Its changed a ton in the past couple days, so maybe not. Are you looking to put more cash to work . You said about opportunities that exist in bonds that havent for an awfully long time until the fed started doing this whole thing, is there still too much opportunity elsewhere for cash you would have otherwise deployed into stocks . Well, again, at t, at 7. 5 , very consistent Free Cash Flow generation. We think that ongoing reliability deserve morse of a premium given some of the volatility out there, so there are a lot of really compelling equities to buy. I think you can buy bonds or equities here, but as long as you Pay Attention to valuation on them. All right. Well see you soon. Good to catch up with you. Bill miller joining us right there. Up next tracking the biggest movers as we head into the close. Pippa stevens is standing by with that. Pippa. Scott, one consumer stock hitting a fiveyear low after a cyberattack. Weve got all the details coming up next. birds chirping go. And go and go and go. but what if you. Stop . You work hard, its time for a bank thatll work hard for you. Everbank brings security and a guarantee that youll earn a yield in the top 5 of competitive accounts. Going, thats what got you where you want to be. Were the partners for your next move. Everbank. Advantage, you. In the u. S. We see millions of Cyber Threats each year. That rate is increasing as more and more businesses everbank. Move to the cloud. So, the question is. Cyber attack as cyber criminals expand their toolkit, we must expand as well. We need to rethink. Next level moments, need the next level network. [speaker continues in the background] the network with 24 7 builtin security. Chip . At t business. Were about 15 away from the close and get back to Pippa Stevens for a look at the key stocks shes watching. Clorox hitting its lowest level since 2018 after saying it now expects net sales to fall 23 to 28 due to the impact of a cyberattack thats compared with its previous guidance for a slight gain. The Company Forecasting an adjusted loss, below the adjusted profit. Analysts expected those shares down almost 6 . On the other hand lamb westin, as the potato producer raises fullyear revenue and forecast and cites demand actions, having its best day since 2020 with shares up 8. 5 . Thank you so much. Last chance to weigh in on our question of the day. How many more times will the fed raise Interest Rates . One, two, none . You can head to cnbc closing bell on x. The results after this break. Icy hot. Ice works fast. Heat makes it last. Feel the power of contrast therapy. So you can rise from pain. Icy hot. At humana, we believe your healthcare should evolve with you, and part of that evolution means choosing the right medicare plan for you. Humana can help. Hi, my name is sam davis and im going to tell you about Medicare Advantage Prescription Drug plans that can provide more coverage than original medicare, including Prescription Drug coverage, all wrapped up into one convenient plan. With original medicare youre covered for hospital stays and Doctor Office visits, but you have to meet a deductible for each. And then youre still responsible for 20 of the cost. Next, lets look at Medicare Supplement plans. 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But the same aipowered security that protects all of google also defends these services for everyone who lives here. Power e trades awardwinning trading app makes trading easier. With its customizable options chain, easytouse tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. E trade from morgan stanley. Power e trades easytouse tools make complex trading less complicated. Custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. E trade from morgan stanley. Were now in the closing bell market zone. Senior commentator mike santoli here to break down the crucial moments of the trading day, and it staples having their worst day since january. Whether this breakdown is a sign of worse to come. Courtney reagan shares what to expect from levi. Whats on your mind, interesting reversal late day . Market, often as i say almost every month, likes to put itself in a neutral spot before the jobs number. The fact that you have had the bond yields come off, clearly is the prerequisite for stocks stabilizing. I wonder if youve been bearish and correct for two months, an 8 pullback in the s p, the stock down twice as much as that from its high, the index has held above this 4200 level for three days, you have higher lows each day, you have to at least be asking yourself if its enough for now on the downside. Now the jobs number and the yield response tomorrow is going to probably, you know, tell you one way or the other if thats the case, and it is a little bit of a make or break type area for this market. Its just a routine pullback or something worse. Pretty telling comments from the San Francisco fed president mary daly, at the new York Economic Club and suggested that move that weve seen in the bond market, this tightening of credit, financial conditions, is equivalent to a rate hike. Sure. And thus, they may be done. In fact, professor siegel was on with us, as you heard at the top of the show, said stocks can go up because the fed is done. Listen. We have seen the high of fed funds. What i hope for is that if we do see a slowdown, im not saying were going to, but the fed is just as nimble at reducing those rates as it surged rates in 2023. And if they are, then weve got that cushion with a reasonable p e ratio. I think stocks do end higher than they are right now on december 31st. Thats professor siegel. Hope is a dangerous thing. Of course. We said that. Is the professor going to be disappointed hoping for something that doesnt come in terms of rate cuts . The first question is whether that you want to hope for. I doubt the fed will be cutting in 75 basis point chunks three or four meetings in a row in hiking and i dont think the fed needs to be outright done in a declarative way for stocks to recover and get back up toward the july highs under the right conditions. Mainly because the fed hasnt been done since october of last year when stocks bottomed. There were 3 fed funds. Were above 5 . To your point about mary daly, the sensitivity to the overall picture in terms of what rates at this level is doing to the growth picture and for that matter to the inflation story. So much going on right now is disflationry. Not just the xwrooen gasoline stuff. Pricing power throughout the economy. Investors are questioning it. Theres clearance where we could be okay. Historically a fed pause is more bullish than the first cut because that usually means maybe the economy is taking a leg down. Back to we just got the dot plot from the last meeting and why you need to be so careful if reading into too much of what is essentially a projection that means almost next to nothing because its not really a prediction of anything and the noechlts rates has dictated a lot since that. Absolutely. The movement in rates has been so sharp and dramatic in magnitude that its created so many rationales behind it. Yes, its part of what the fed is expected to do and tried to convey about their intention in not cutting rates, but everyone is talking about positioning and supply and, you know, everything around the sun. Also, the surveyibiribility sto. All that stuff on the table, it burns out at some level. Bonds are more oversold than stocks are and see if it matters. Staples, speaking of burning out getting burned out big time, clorox, the cyberattack, staple stocks the worst sector. Especially the food based one. Pepsi has been off. Cocacola today. Schmuckers. Yes. Pepsico has been, you know, over the years, the massive out performer in food. What walmart had to say about consumer behavior, also what conagra had to say about trading down. So the concerns about maybe people are going to be consuming less in the way of snack food, packaged food over time with the weight loss drugs is one piece of it. Another piece is, i think the street became convinced they got too aggressive on pricing when they had the ability to do that and people are trading down or the unit growth will be a struggle for a while. All that stuff in the mix and theyve, you know, at this point i think you might be able to say its starting to look ka pit tu laer to in terms of the stock action but i dont know where you call the turn. Courtney reagan, levi, what should we look for . Theyre out after the bell. Investors want to know if levis business has improved in the united states, its biggest region and wholesale business. Those were areas that were weak last quarter and led the denim maker to slash its profit forecast for the year. The ceo said the quarter its reporting today u. S. Wholesale trends were improving thanks to better in stock inventory. The question is did that continue as the quarter wore on . Well find out. Levi said it was lowering prices on some of its more price sensitive items like the 502 and 512 jeans. Has that impacted margins . China has been better for levie and the business is back. Thats what he said last quarter. Does that hold up . Levi strauss shares down 6 since it reported slightly better of the xrt over time. Well have to see whaand the details will be important in this one. Well see courtney in ot when levi hits the tape. Tomorrow jobs report needs to come in no shocker in line with adp or weaker will be cheered by the market. I dont think people will be concerned bay somewhat softer than expected number. I think it is worth remembering the last jobs report we had downward revisions in that moment where people are wondering if the numbers can be taken at face value. The jobs report since june has not been some massive market mover, but its important as part of the picture. Weekly claims continue to look really reassuring in terms of, you know, right around the 200,000 level and not seeing a spike. You know, i think the market is going to sort of outsource its reaction to what treasuries do. If it seems as if, you know i cant imagine its going to be an acceleration of wage growth that will further inflame the treasury yield yields but that is the last thing we have to get out of the way and we want the nom get out of the way and see if the oversold, border line washout conditions in parts of the stock market, especially the cyclical parts of the market, gets kind of a reversal. Im looking at the biggest stock in the market, apple, up. Maybe the key to apples stabilizing was downgrading it. Its up two days in a row since the call you dont see every day. It had a steep bullback. Pull back. Im joking, of course. People did give up on it in the short term. The big stocks are still acting somewhat as defensive. Yeah. Nvidia up 1. 5 . Microsoft. Its split today. Tesla is in the red as is meta, alphabet, amazon, broadcom barely hanging on. One of the things that the larger stocks in the market are killing the smaller stocks. The micro cap etf is kind of in freefall. They are the ones that generate cash and dont have to soak up capital and liquidity. I guess that Still Matters for now. To me its about macro for the moment is, but investors deeply want to i think turn their sights to Company Specific stuff starting at about a weeks a time when you start to get the earnings coming through and all that. Those macro worries up with the russell. So keep your eyes there. Looks like were going to go out modestly in the red. Sets us up for tomorrow and you up for o. T. Stocks ending fractionally lower but pairing the worse of the losses in todays trading as treasury yields edged lower. That is the scorecard on wall street. The action just Getting Started. Im morgan brennan. Jon fortt will join us with highlights from his conversation with Hedge Fund Founder jeff oven from inclusive capital partners. Ahead this hour, Katie Stockton breaks down the key levels to watch in thep s p 500 s p follow