Around or above 5 i think you nailed it. So far earnings havent mattered in the two weeks we started, a little less than two weeks. What mattered is geo politics and Interest Rates. Interest rates have been defined at least in large part by the fed moves. Not the only factor involved with Interest Rates but that has been a big factor and a big factor for the last 18 months which is to say that the investing environment for the last 18 months has been lousy. Company reports and earnings havent mattered anywhere near as much as Interest Rates. That will continue in my humble opinion until the fed signals it is done raising rates. It sounds like just listening to jay powell last week like that is what he wants to do but hes not going to declare Mission Accomplished too early. He doesnt want to take that risk. We have a couple more months of what appears to be kind of a lousy investing environment but when the fed signals it is done the environment changes. Josh, alphabet today. What you own has been the crown jewel since the last Earnings Period up 15 over the past three months. We talked about new record highs that that stock has been hitting so what are your expectations here and what do you think is at stake for the state of stakes given everything that has been going on and brings us to today . Let me start with the last thing you asked, the state of stocks. The forward pe on the s p 500 is now 17. 7. That is actually below the fiveyear average of 18. 7. And pretty much in line with the tenyear average. The market is not particularly expensive. That being said, we have a little bit of an earnings problem. If you pull out tech, this is another negative quarter overall for earnings just for the entirety of the s p 500. Even companies that managed to beat, gm as an example which im sure jim will do ten minutes on in a second it almost doesnt matter. The misses are being punished a lot more than the beats are being rewarded. Thats just not a great environment for investors. Nobody feels good in that kind of environment. To go back to what you were talking about with google, look, sometimes the market is more intuitive than others. Right now is one of those times. Why is alphabet the closest to a 52week high out of all of the things . Very simply they have the best earnings per share growth this year. Of all of the Companies Reporting apple is going to have 1 , negative 1 Revenue Growth, 7 earnings growth, microsoft is 8 and 12. Not bad. Alphabet is 10 and 37. 37 earnings per share growth year over year in this quarter. Thats why its stock looks the best. That is what investors are looking for. They want high quality, great Balance Sheets, big, competitive mode and earnings growth. If you deliver that stock price is getting rewarded. Amazon is the wild card to me. Im also in that one. We expect Something Like 10 to 13 Revenue Growth depending who you talk to but 107 earnings per share growth. They have drastically slowed down on spending. Theyre not trying to get the packages delivered to you in 15 seconds anymore. There is a marginal gain from doing that. I think youre going to see a bigger cash flow number here. The new ceo, the new guy is up against the wall. And i dont have an edge on which will have the best reaction. I can just tell you if either one of them were to sell off, i would buy both of them so i have a game plan for the post earnings. I have no edge going into the i have no idea. Neither does anyone else but i admit it. Those are the two i am a buyer of no matter what i got you. Look at that. Apple announcing an event for october 30th. New macs are expected. This is going to be setting up for the super bowl quarter really for apple. New macs. The Holiday Quarter for iphone. A lot of stories about that stock. The chart hasnt looked that great, down 10 in three months. Well get to more of that in a moment as we look at those shares off the news at the bottom of the screen. Meta and amazon are yours. Today you look and you say, got to get out of the gates good before we get to the ones i really care about but the idea that yesterday was a moment for the market that changed the narrative a little bit. Remember the ackman tweet . Yields came down and stocks went up and we are holding in that pattern as we get set for these earnings. So, yeah. Weve been in kind of this macro environment, right, because we havent had that many earnings. Only about 17 of the s p 500 reported but 78 have beat. Really everyone is just focusing on rates and the geo political issues like jimmy just said. I do think earnings are going to matter. This is a huge week as you mentioned. Theyll matter this week. We have the ones that report this week of the big things, 60 of the s p 500. If you add apple that is 22 of the s p 500. I will say this. Within the faang microsoft is 17 of the s p 500. Microsoft is 7 . Apple is 7 . Meta is only 2 . If they have a good number i think it will be important but the bigger ones will have more impact. I do think theyll have good quarters. I think youll see cloud reacceleration, i think youll see digital ads reaccelerate as well. I think ai is going to be the question mark. Can they actually monetize it . Are we going to be that excited again . I am not so sure. I am excited about ai for meta because last quarter it helped engagement at facebook blue by 7 . I also think reels is very attractive. Theyre gaining momentum click to message. They have 40 billion in cash and theyre buying back stock. Excuse me. 40 billion buy back and bought 10 billion last quarter and well see what else this quarter. It trades at 22 times the cheapest of the group. To joshs group actually they have better growth, the best growth of the faang. Theyll go from single digit revenues to double digit revenues the second half of this year and into next year. So i still think that is attractive. That being said you know ive been trimming it because it had a nice run. I do think amazon, retail is going to be great. I really do. The u. S. Prime, the numbers were off the charts, the two day prime, right . Thatll help. It is all about margins though, scott. 3. 9 operating margins last quarter up from 1. 9 which was expected and they think they can get to mid single digits. That is important. Aws 12 growth last quarter. They need to see that accelerate to see the stock do better. In terms, jim, of the play time is over in terms of the stocks went up a lot, right . Year to date. Microsoft up 37 . Microsoft 54. Meta 160. Apple 33. Nvidia 194. The days of stocks going up on ai hype while you are delivering declining Revenue Growth that is why im saying play time is over. These companies now need to live up to the stock hype dont they . I agree with you. I see a somewhat benign set of circumstances that can happen that people may not like. Lets say take alphabet tonight. Say they beat by a little bit and the stock is up by 1 tomorrow and through the end of the year up 4 . I am overweight alphabet. I like the stock a lot. The point im driving at is i take what you just said at face value and i agree. It doesnt mean there is a trap door opening up under the stocks. It doesnt mean youll get the 45 per annum returns that if you look at apple or alphabet over the last seven years youve gotten that. You may just get average market returns in these stocks. That is why for some time ive said im comfortable with these stocks. I am under weight them because i see better Growth Potential in share prices elsewhere. That is what i am setting up here. These stocks can do just fine, actually track and maybe even create what the market returns are. I think it is hard for them to do really badly. I think it is hard for them to do really well after the games you just talked about. They have come in a little bit i think if they are weak, though, if they get bought into the end of the year i think you have chase. Youve been talking about that for the last six months. I think that is going to happen. If any of the stocks are weak, no the any of them that is why there is a perceived floor under some of the names. I would say maybe apple is the wild card because there are questions about what is happening in china, market share with wawa. Lets show everybody the invitation apple put out moments ago. I briefly referenced it but here you go. October 30th, 5 00 pacific time. So that is going to be an interesting event leading into what is really the most important the Holiday Quarter with the new phone and now these products that will be introduced, you know, that is going to matter a lot. The set up is better. 12 from its highs. So is amazon. I think there is more upside to amazon. But the set ups are much better than at their highs. Apple is usually not down into the print. Thats what im saying. The set up is good. There was a report this week that reports in early november. Usually youre talking okay apple ramps up into the Earnings Report and you wonder is there going to be a sale on the news. Here the stock is going the opposite direction. Which is a good thing i think. An important aspect being missed and i thought youd touch on this, share buybacks. Theyll matter for apple. If the stock goes down as you just suggested possibly it might thats great because they have the cash flows with which to buy back their shares i am not suggest go possibly it might. Im saying it has been down into the number. Im just going off what youre saying. It applies all across Corporate America. A couple industrials. Cleveland cliffs and general motors, these guys are buying back a lot of stock with good results. This is what ive been saying about a lot of these companies that have done well particularly cyclicals for two years the share prices languished. Per versely that is good. Cash flows are there. They are buying back shares. Applies to tech and nontech. We have a pretty good day going here. I do want to touch on what jamie dimon and ray dalio are saying over in saudi arabia at a conference where theyre looking at the environment. They see deficits increasing. They see elevated rates. You know, theyre warning like they are prone to do. Here is jamie dimon. Fiscal spending more than ever in peace time with this omnipotent feeling Central Banks and governments can manage through all this stuff o i am cautious about what what will happen next year. Whether the whole curve goes up 100 basis points, be prepared for it. I dont know if it is going to happen. That is dimon first. Josh, you want to opine on what he is talking about . In other words the outlook is murky, gloomy because of these deficits that continue to go up. Interest rates. All of the risks and at some point governments and Central Banks wont be able to do anything about it. They might have to because we cant continue to add to the deficit and overall debt pile at the rate of this fall. That is one reason why i think the 7 and 10year treasury is extremely attractive. For people that want to lock in a 5 rate and are worried about the gloomy environment treasuries can do two things from these levels for you even if there is another hike of the fed fund rate. Why not . What is the difference . To jamies point it doesnt even matter anymore. If there is or isnt it doesnt matter. If you can lock in ten years at 5 and you think there is some sort of really tough year coming next year youre going to see inflation rates continue to drop into that environment and so in real terms you get a really nice risk free rate of return on the portfolio of treasuries and it is a better option quite frankly for intermediate to longer term money that you have. This is not for money youre planning on spending in six months but this is for money that is not going to be in the stock bucket. You cant take equity risk with it. You want to earn a solid rate of return and lock something in not have to worry about the Interest Rate picture for a few cycles. That is what i would be doing here and i agree with mr. Dimon. We are now seeing things like the delinquency rate for car payments at least for the sub prime auto buyer. Were seeing that tic up to multi decade highs. Were seeing the rubber meet the road and we are seeing the higher rates start to bite and the financial conditions meaningfully tighten and actually hit the real economy. It is first starting now. Why not be prepared for a little bit of risk averse. Are we prepared for a hundred basis points across the curve . I submit to you no way. No i dont think people are ready for that i dont think so either. Not that he is suggesting it is happening tomorrow obviously but maybe that is why he and ray dalio are reasonably gloomy for 2024. They can get it there. They cant keep it there. What is another hundred basis points after they just did five and change, right . Theyve already done the bulk of the damage. But the point of it is so far it hasnt slowed down the economy. Well do a 4 to 5 gdp number in the third quarter. Well slow down in the fourth quarter. None of us know how much. The companies arent saying that on the earnings calls is number one. Number two, you have the consumer that remains strong. I know there are pockets not great. I will say American Express had long growth of 7 in the u. S. 9 international 15 . Writeoffs and delinquencies were lower than 2019 levels. It is controlled. Stephanie, that is the wrong people to look at, though. Yes but youre talking. That is what i was going to bring up. It is this bifurcated. Discover. Look at dfs. Okay. Its the 80 20 rule, josh. This is how it starts, though. It doesnt start with the wealthiest people that have platinum cards. It isnt the wealthiest people actually. American express gen z was 60 of their membership growth and it grew 18 . In the quarter, josh. So no. I can understand that discover, much lower end, but American Express is not what it used to be in terms of super, duper high end. It is not. What do you think the average credit score is for a Discover Card holder. Forget the age. Josh. Let steph finish and then you can rebutt. Perfectly fine. If you talk over each other i cant understand what you are saying and i know the viewers cant either. Steph . I think the consumer is still in pretty good shape. The job market is running the show at this point. Wages are staying high. Inflation is coming down. Not all pockets but a lot of inflation is coming down. Real incomes are pretty healthy. They just revised the savings rate to 2 trillion. I think this consumer is still going to spend selectively more on services continuing versus goods. We are seeing that in all kinds of series. By the way no one is even talking about manufacturing numbers today the pmis. The manufacturing hit 50. A couple months ago no one thought that was even possible. We are starting to see momentum in the manufacturing and that goes back to what jimmy has been saying for years in terms of onshoring, reshoring, etcetera, as well as anything tied to aviation. I know well talk about boeing and ge and Everything Else later. I think the economy for now is good. We dont know about next year. It is too early to tell. I think for now the better economy is going to lead to better earnings and eventually if earnings are going higher and being revised higher which they are we could have a year end rally. Talk about next year next year. Josh, go ahead. I remind everybody too yesterday afternoon another new note over at jpmorgan. Again, lag effects right . The full effect of the severe tightening that took place last year has yet to be felt. It goes right to the heart of this conversation as to whether, you know, we believe the economy is as strong as it appears to be. You know, ackman yesterday suggesting one reason he has taken off his lopping held short on the long end of the Treasury Curve is theres too many geo political risks and the economy is in fact weaker than people think. Josh brown, to you. Stephanie, i would just ask, forget about the age and whether or not it is millennials. What im saying is that if we are going to start feeling the effects of financial conditions tightening and thats the point im trying to make is now we have data and we actually are, it is not wrecking the economy but were seeing it. Where do you expect it to show up in the average American Express user population . Or the average Discover Card user population . Actually both stocks are at oneyear lows right now. I think discover and its clientele are in worse shape than typically an amex user regardless of whether they are 30 or 60 years old. That is not the argument. If you agree that is where it is going to show up first its happening. You could disagree on the magnitude of how important that is. Right i dont think you would argue that were starting to see it i want to bring up something else, too. Despite the risk dimon and dalio and a number of other people are suggesting are still out there, bank of america flow show 12 straight week added to stocks, impacted by investors buying etfs and for those who say there are all these opportunities, it is a stock pickers market and under the surface there are stocks and things you can do single Stock Investment suffered the biggest outflow since august and i am guessing the buying of the etfs probably had something to do with the qs. Okay. Back to where i started and josh corroborated it. It has been a lousy investment environment for quite sometime not just the last two months. Unless you have been in megacap tech. Sure. Even the last two months in megacap tech hasnt been. Lets cut to the chase. The economy, profits are doing a lot better than people have expected for most of the last 18 months. A lot better. It is not reflected over the last two months for one reason and it is the fed. To the earlier discussion you left out one really important point. Headline cpi is now 3. 6 and headed lower. We can say that with the lagging effect of rent. Average Hourly Earnings are growing at 4 . Cpi is coming down. 198,000 on weekly jobless claims i mentioned that. We all agree on that. The point im driving at is when anybody and ill take mr. Dimon or im sorry mr. Ackman saying hey things are a lot worse than expected or theyre seeing in numbers you have to look awfully hard to miss the positives in this economy. Stephanie pointed out pmis today above 50. That is huge. Since were talking about the performance of megacap versus others the big earnings this week i forgot to bring up with you this suit. From the attorneys general of several states accusing meta and instagram of harming Mental Health of young people. The stock is not doing anything to reflect anything about any of that to dispute it. Many react to any sort of regulatory action taken because the street seems to assume, all right. You write the check, pay the fine, move on. How do you feel . Yep. That is why i cite Free Cash Flow all the time. If they are taking 40 billion to buy that stock they have a ton of cash. Even tiktok has died down with the pressure against them. It is not good for sure. Im not going to spin it positively. I dont think it changes the narrative nor the fundamentals over the long term. All right. We still have the chaos in d. C. As if there is nothing else to worry about. Breaking news from washington. Lets get to the hill. Reporter we now have yet another republican nominee for speaker tom emmer who has just won the republican nomination and now it sounds like what republicans are doing is yet another vote to see who can vote for him on the floor. Who wanted him to be the nominee and who could back him on the floor. This is what we saw jim jordan do the other week trying to get a sense of his support and after that meeting up with hold out members and seeing if he can sway them one way or the other. Jim jordan was not able to get to the magic number of 217 and it is a question now whether tom emmer will. He does have support across the conference from some of the more moderate members to some of the more hard line conservatives but at this point it really only takes five members to block anyone from becoming speaker. We will have to see if the five exist in some capacity and if emmer cant get it what comes next. You saw mike johnson currently the vice chair do quite well when it came to nominations. I think at this point a lot of members have fatigue and have been telling us how tired they are and how much they just want to wrap the speaker vote up this week. Unclear whether well see a floor vote today but at this point can say tom emmer is the nominee going forward. Appreciate that very much. Thank you. A big earnings winner, shares popping on that beat and the outlook stephanie owns. Well get her take when we come back on the half right after this. Nice footwork. Man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. That number didnt look right. Plus 32 on the dow, just saying. Looks like it is only up 118. So beg your pardon on that. Wellcontinue to check that out. It doesnt look like that board is moving correctly. There is the dow up 120. It is 3m surging on a beat and outlook. Steph you own that i do. It was down 28 headed into the print so very low expectations but the numbers are probably going higher and the stock trades about 9. 5 times earnings. I am not that dividend yield is secure so just have that out there. Overall the number was better than expected. Free cash flow was 900 billion better than expected. The Healthcare Division is pretty much humming. Even the other problem areas like consumer and industrials while they missed on top line they feed on profitability. Their price cost mix is starting to work. A vote of confidence for sure. General electric up 100 this year. Yes. 75 year to date. Yes. Now what . This was a good quarter. It really was. Theyre hitting it on all strides at this point. 18 organic growth. 25 growth, organic growth, aviation alone. Again, another quarter of better than expected Free Cash Flow, raising Free Cash Flow guidance. I think theyre humming and you have the vernova split coming out the Second Quarter of next year. Thatll be your next catalyst. Where did you get in on this . Do you remember the equivalent before the split . Pretty split right . A long time ago. 18 . I bought it all the way down to 10 and i fought everybody along the way. I cant even remember. Was it 101 split . 81 i think it was. Something big to 1. You still are optimistic about ge i really am. I like what theyre doing, becoming a more Simple Company and easier to understand and i think that is why theyll get a higher multiple over time. All right. Then general motors. They pulled their outlook because of the strike. Stock is up, it was, now down. Jimmy . Okay. I tell you whats new. They generated 5 billion in Free Cash Flow. Anybody wants to take a shot at that go ahead. What is the market cap 50 billion . Why is the stock down . Because of the uaw strike. That is the short answer. Why does the stock trade at 4 1 2 times earnings . Because of the uaw strike. It was trading at 4 1 2 to 5 1 2 before the strike i know. Historical past around 7 times. When the strike is done it is likely to be there. In the meantime what happened, the reason i lead with the 5 billion of Free Cash Flow is what do you think theyre doing with it . They have 13 billion of net cash in their operations. What do you think theyre doing . Buying back shares. Share counts shrunk year over year 5. 2 at well below book value and a ridiculous yield on earnings or earnings yield or Free Cash Flow yield. For people who are going to say hey this has done nothing for a long time it says nothing about what it is doing going forward. Who are these people you are referring to . It doesnt have to have a name. To whoever would want to say that. Can i ask a question . Go ahead. Before you do that let me say something. One thing. Lets everybody be careful. Everybody has a stock in their portfolio that has languished despite great excellent reports. Of course. Everybodys got it. Just be careful about throwing stones. Josh . Can i ask a question . Are you sufficiently protected now . Can i ask a question . Why would these pe ratios ever change and if it is solely a uaw issue, why were these stocks selling at 10 or 11 times earnings ten years ago . This has been a decline years in the making and it affects International Auto companies that dont have as much or anything to do with United States based labor unions. Im trying to understand. What is going to change the current dynamic in place as these Companies Head toward three, four times earnings being Industry Standard globally . This kind of reminds me, josh, in the fall of 2021 when many people were saying the same thing about energy. I wont name names. Many people were saying that. Look in the rear view mirror. It is not to me helpful as an investor. What is helpful is these are highly profitable companies. Generating 5 billion of Free Cash Flow against the 50 billion market cap with net cash, significant net cash on the operational Balance Sheet. They just buy back shares. To anyone who thinks like energy in the fall of 2021 theyll languish at these multiples go ahead. Theyll just buy back shares below book value at earnings yields that are extraordinary. Let them keep doing it. Eventually if i am the last Person Holding a share of gm with 5 billion of Free Cash Flow a quarter ill be perfectly happy. Will the weighted loss of capital allow them to continue to buy back as much stock as the last year or two . I think that is a great question and the answer is i dont think so much about weighted average cost of capital which isnt very high and again i have to point out net cash on the operational Balance Sheet of 13 billion leave aside gm finance, the point is Free Cash Flow. Your question should be will the Free Cash Flow stay in there . A legitimate question. I go to 12 1 2 years being the average age of cars on the road. They simply dont last that long. Consumers need new cars. As fast as they are produced they are being sold. That is what the results just showed us. I know this is not going to trigger you. You seem sufficiently triggered. Im excited. Come on. Josh and i get excited about these things. Cleveland cliffs. What is up near 7 . He was so excited his microphone flew off. The box fell on the floor. Believe me, its rare to see jimmy that excited. When the microphone flies off on the floor, the box hits. Like sports talk radio. Cleveland cliffs up near 7 . Look, 600 million. Go ahead and put that on. You know how that goes . There you go i like holding it. Im special. Cleveland cliffs is special. 600 million of Free Cash Flow in the quarter. Okay . Thats not an unusual quarter. It is not like there is something amazing that went on there. They spent the last few years reducing cap x. Reducing costs to produce steels and josh made the point auto oems are not just the big three. Toyota and everybody else is producing cars. That is showing in the volumes cliffs is producing, the shelling prices they have, about 1,200 per ton, which is way above spot prices. People look and say spot prices down per ton. That is irrelevant when you have fixed price contracts. Costs going down, volumes strong, prices going up. The biggest thing about cliffs is you want to be a longterm shareholder here . This is the green producer of steel. Again, we got to go. Why is the stock down year to date . I think it is on two reasons recession which ties into the spot price i mentioned quickly but spot price is around 800 a ton. That is what moves around intercorridor. People say good. Right. We see the spot price going down. Well sell clevelandcliffs selling at an average price of 1,200 per ton. They have negotiation skills and contracts that will keep it at that level as costs go down. They are projecting sizable cost reduction. As long as there are questions about the economy this stock is not going to do anything to reward people . Thank you for bringing this up. I am completely serious i am, too. I hope i dont sound like i am joking at all. Free cash flow. Again not just gm or clevelandcliffs. It is the whole Corporate America that is generating Free Cash Flow. What are they doing with it . They cant buy back more debt. They are buying back shares. They bought back 60 million of shares in the quarter. That is something that is likely to continue. Obviously the merger is continuing. I dont know how it will play out. If the merger doesnt go through that is a lot of Free Cash Flow to buy back shares with. Here is our cnbc news update at this hour. The Biden Administration is prepping for the possibility for Mass Evacuations according to the Washington Post which quoted senior officials who say hundreds of thousands of americans may need to be evacuated from the middle east if the israel hamas war cant be contained. Last week the state department issued an advisory to u. S. Citizens worldwide to exercise increased caution because of potential terror attacks, demonstrations, or violent actions against u. S. Citizens or interests. A new shot to protect infants from rsv is in short supply according to the cdc. An advisory to doctors sent last night, the agency told doctors to prioritize infants less than 6 months old who have chronic lung disease or other underlying conditions. Signs of hope in hawaii after the devastating august wildfire. The mayor of maui county announced that all of west maui except the burned out sections of lahaina will reopen to tourism november first. Back to you. Thank you. Pippa stevens. Coming up, a bank analyst by day, power lifter by night. No ketchup no mustard. The mayo is next. When you think of investment risk, do you consider climate risk . Changing weather patterns are impacting the way we live and the value of businesses large and small. This can mean disruption to supply chains, changing demand for products and shifting regulation. What does this mean for your business, your clients, and your investments . Ice offers data and markets that can provide critical insight. Manage your climate risk with ice. Explore endless design possibilities. To find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. You founded your Kayak Company because you love the ocean not spreadsheets. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire welcome back. A few big banks hitting 52week lows today the sector on pace for the Third Straight month of declines. Our next guest says it is a buying opportunity. We made it our call today. Mike mayo making it the head of Large Cap Bank research at wells fargo security just named the Number One Bank analyst for the fourth year in a row by Institutional Investor. Welcome. Did you like the tease . I did. Thank you for mentioning the Power Lifting with the bank analysis. You know, we aim to please. Okay. So your call is buy the big banks now. Why would i want to do that . Well i mean that is what investors are probably i am trying to channel what our viewers are thinking right now and theyre like, the regionals are down 10 in a week. Big banks are down 9 in a week. Stocks are trading terribly over the last few months. Why do i want to buy them now . I want to recognize the head winds. Interest rates a lot higher than i or the banks expected. Theyve been much more of a head wind to the deposit cost, net interest income, spread revenues, capital markets, and earnings estimates have been cut by 20 the last year and a half. I think we are in the middle of the seventh inning maybe the eighth inning for the downward earning provisions and once the last is done i think it will set a floor for the banks starting with our favorites which are goliath is winning jpmorgan number one citigroup number two. So you have buys on everything right . No, not on everything. Not on Morgan Stanley but on b of a, citi, goldman, jpm. Are you rethinking any of these calls . Lets say over the next 12 months, the sort of time frame you use, correct . Right. As a broader team we have down graded six regional banks and other names over the last several weeks. We have narrowed in on the biggest banks which are showing the greatest resiliency especially jpmorgan, their estimate higher than the start of the year. Were putting more of our money into those more concentrated investments and i do think it is a longer tale for the regional banks. We go with the larger bank first and then some of the trust or Brokerage Firms like a Goldman Sachs and then the Region National banks will come up for the rear. We think the whole sector has not gotten credit for the derisking that has taken place over the last ten years. Scott, whenever this recession comes and goes you are going to see the bank perform a lot better than people expect. They have derisked but still risks out there havent materialized yet the likes of which dimon himself was talking about today in saudi arabia. Im sure you saw the headlines. How do you react to it is not like, you know, that is a ringing endorsement to go buy financial stocks today. The three risks would be rates, recession, and regulation. When it comes to rates, absolutely thats been a big risk and has taken a toll. When it comes to recession look at the credit quality of banks. It is so much better than anybody expected and that resiliency is going to show through. When it comes to regulation jamie dimon himself said banks are uninvestable because of the new proposals out in washington, d. C. But he is saying that while he himself owns over a billion dollars of jpmorgan stock. You know, i think he is going a little overboard there with that uninvestable comment and it has dragged down the stocks and it is an opportunity. Are your estimates at risk yes or no. No. But i think consensus are at risk by another 5 to 10 . That is why i say were in the middle of the seventh inning for the down ward earnings revisions. It has to catch up and then itll be a nice floor. The day of Free Cash Flow, mike. Potentially higher u. S. Regulations. Will this crimp the ability for the companies to buy back shares with Free Cash Flow . It already has. You have unrealized securities losses because of higher Interest Rates. Banks already slowed down buybacks. Back to the comment before i think the biggest banks like jpmorgan and citi will be able to buy back more stock going into 2024 and will also provide a support i like what i hear. Good to have you here. Mike mayo. Congratulations again fourth year Institutional Investor of the year. As you see our senior markets commentator mike santoli has come to the desk. Interesting here. When we came on the air 47 minutes or so ago all of the megacaps were green except for apple. Now were steadily moving red almost across the board apple, microsoft, meta, amazon, nvidia. Thats taking the market in. It feels like a very indexy move. The s p is down five days in a row. I think seven of the last eight there has been a pretty pronounced intraday fade. It does show you there is a little bit of fatigue. A little bit of buyers unwilling to step out there. 4250 on the s p seemed like one of those, okay. Lets hold and see if it can hurtle it. It didnt immediately. I think we are in that mode churning around the lower end of the rain. Weef still want the Critical Mass of the big guys reporting to know if there is going to be anything kind of a new source of energy in this market from that. Arguably expectations have been cur failed enough on the big stocks that it could be the case. We are not making much of the pause in yields yesterday. Had a pretty big pullback from the highs in the tenyear yield and trying to make something of it. Financials have been conspicuous under performers. We were just talking about that. The same day with jamie dimon, weve become accustomed to these kinds of comments from him, half a world away making them today but talking about the outlook being dicey i get it. I think there is sort of a late cycle vigil not called off. Whether it happens or not it feels like there could be a pick up in terms of industrial production. A lot of folks pointing to that. Isms looked okay. I dont think it is anything like today that gives you more reason to worry but the psychology is there. I think itll improve if price action improves basically is how it works. And see if it starts today after the bell in overtime. Good to see you. Mike santelli. Coming up the set up on boeing with that company reporting earnings tomorrow before the bell. People are excited about what ai will do for them. Were excited about what ai will do for business. 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We know all that. So Free Cash Flow for the quarter could be negative, but i dont think theyre going to change their longterm guide of Free Cash Flow of 6 billion to 7 billion from 24 to 26. Thats much more important, not to get too caught up in the short term. Ge was a bright spot for sure in earnings. And organic growth at 25 , thats a tail wind for boeing and airbus. Farmer jim, see how i brought that back . I did, thank you. This has been tremendously disappointing over the last two months, down about 25 . Its all on what stephanie alluded to, in my opinion, these fbulkhead issues with spirit systems. That is likely to get fixed. The way the stock is trading is where it was three years ago, when the 737 was grounded. Thats not the situation were in right now, but the problem, is sentiment on this stock is absolutely terrible. I think just a slight bit of good news, and who knows where it could come from, maybe deliveries that expectations are so low that hopefully they will be positive. This is not its not a question of the Company Turning it around, its already turned around. The stock needs to turn around. Its a sentiment issue. They need a small piece of good news tomorrow to do that. Quick break. Final trades on the other side. Were at session lows for stocks as we wind down on this program. We were just discussing with mike santoli, you have had some selling in the mega cap names. Dow is up 59 points. Microsoft and apple had gone negative. The s p barely hanging on to positive territory ahead of earnings coming out. Were watching d. C. With republicans trying to elect a speaker of the house. There are a number of other issues on the table that we have our eyes on today. Lets do final trades. Well, those are next. Those are next. Every day, businesses everywhere are asking is it possible . 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Clinically shown to heal moisturize dry, sensitive skin. Gold bond. Tomorrow, we have a big day coming up. Were going to be live in philadelphia for the big schwab impact conference. Look forward to that. Hope youll enjoy me then. Josh brown, final trade. Ief. If you think bonds are bottoming by the end of the year, which i do. Farmer jim . Winn resorts. A vsery good report last week. And las vegas operations itself last been going gang busters. So you have a good report coming up. All righty. Stephanie . Mcdonalds, down 14 from its highs. Digital drive food delivery is creating market share. I like the stock into the quarter. Did you see nike by the way . I did. A nice bounce. Almost 2 1 2 . A little bit of china. Good stuff. Well see you later. The exchange is now. Thank you, scott. Welcome to the exchange. Im kelly evans. Heres whats ahead this hour. Bill ekman has covered that bet against bonds. He tells us why and what he is buying right now. Jamie dimon says Central Banks have been 100 dead wrong on forecasts, and it doesnt matter if the fed hikes again. Is he right . And a big payment player and two big tech names on deck with earnings. Our guest says one has a lot of problems but theyre good ones