Transcripts For CNBC The 20240702

The ceo of tripoint homes joins us with a look at inventory and the impact of rising Interest Rates. The dow down more than 200 points, hovering near session lows its been a rough week the s p is flat, but the nasdaq, the outperformer today, bouncing back from yesterdays rough session by about 88 points amazon, the big tech gainer, shares there up nearly 8 on the back of earnings more on that ahead that is helping the rest of the tech trade apple on deck, of course, to report next week and everybody watches that one lets begin with the latest read on the economy and steve liesman, we have had a lot of data this week, steve. Yeah, its been a good one, tyler, if you are an economics reporter even if you like the economy, because it was mostly stronger growth, growth tended to exceed estimates with inflation, however, remaining sticky. But curiously, fed rate hikes are now less in play, as ill show you in a seconds on the expectation that the robust economic readings wont last core pce prices we got this morning, higher than the prior reading in line with estimates personal income, a little light relative to the estimates and below the prior month. But Consumer Spending, beating the estimates with a persistent theme here of a stronger consumer than most forecasts real gdp we learned accelerated from the upside and came in above estimates that are be already, by the way, higher. There is some rebound in business investment, which had been weak in the gdp report. All of this seemed to cement the markets expectation for no change in next weeks meeting with an expectation growth and inflation cool in november and december just 19 and 29 in january. And the market still banking on cuts in 2024 they think the fed will be cutting in june and july growth expected to cool in q4. But now not as much as expected because of the momentum. Goldman sachs raising its forecast today to 1. 6. And now the atlanta fed just moments ago released a take on q4 growth to 2. 3 we need to pay closer to the atlanta gdp report than we had been previously. Based on what came in this week, thats the takeaway. Steve, stick around. Were going to dive deeper into the data and spending, growth, and more here with me is steven stanley, chief economist, and barry knapp. Barry, good to have you in the house and not from your house out in the mountains nice to be in the mountains, as well steve, if i were to sum up how i read my notes from you, it is this growth is growing. Inflation is slowing but the slowing may be slowing in inflation yes you got it exactly right i dont know if anyone can follow that, but yes so you like the Growth Profile that you are seeing . Yes and even more than you did yesterday . A little bit, because the september data was stronger than expected so steve suggested that leaves you with more momentum coming into the fourth quarter. So something close to 2 growth in the fourth quarter, which is not 5 , but its theres the 2. 3 prediction from the atlanta fed barry, you have a slightly more cautious take. I think if i were to bear down, you see some concerns in commercial real estate, right . Correct among other areas that you see as potentially systemic risks. Yeah, more broadly, ive been characterizing the situation in the u. S. Economy as unstable, equilibrium. So we know the dynamic around the household sector, which is largely the effect of Mortgage Rate of 3. 6 large, nonfinancial corporate sectors similarly positioned again. Long duration debt but the deep inversion of the yield curve, which the only precedents are 73 79, and 80, created a very unstable situation in the small Banking Sector you look at the performance of bank stocks after last week for some further evidence of that, which will translate into multifamily real estate. Im less concerned about office space, but multifamily real estate apartment buildings, townhouses we have a Million Units under construction that were initially financed by construct sion loan. Those will need to be refinanced with the base read up 5 , and rental growth having slowed from 15 down to zero, theres also obviously a big problem with the Banking System financing government, the federal government, as evidenced by the big move in longer term rates over the last couple of months and Small Businesses in general, that finance themselves through floating rate loans again through the small Banking Sector so thats the piece thats unstable, and strong data is just exacerbating that by, you know, putting pushing out the point when the fed will start to reverse steven, you want to react no, i think thats definitely, you know, this is all part of the process of the fed trying to get financial conditions tighter there will be winners and losers in that process. So it shouldnt be surprising were seeing cracks in the system you think about the fact that economists have been calling for a recession since the beginning of the year, and we havent seen it yet so i think the economy eventually will slow, but so far its proven certainly more resilient. Steve, jump in. I just was thinking about what a lousy business were all in, where you get 4. 9 growth and all you can do is worry about it growing too much. And 0. 7 Consumer Spending and everybody is worrying about can the consumer give it up . Can we ever just spend a minute and enjoy the data look, picking up on exactly what steve and stanley have said, two things one is that we continue to surprise to the upside things have been working out, and i think the biggest problem people are having is understanding what barry calls the unstable equilibrium comes to me from getting back where we were from the pandemic i think were still putting that equal equilibrium back together. Even when goldman says 1. 6, and the atlanta gdp at 2. 3, that remains an economy operating at potential. It remains an economy operating at potential, and we did 4. 9 in the Third Quarter, and inflation still came down. So the fed seems to have this dynamic perhaps wrong in the sense that we could still be beating inflation with relatively strong growth at potential. So thats maybe something good to think about going into the weekend. Barry, i see you nodding a little bit over there. I think that the fed has had the inflation profile all wrong throughout this entire process we obviously they missed the early part. Even on the disinflation element to it, you know, go back to powells november speech a year ago at brookings where he said were worried about Super Core Services and then start looking at wage growth in education and health care, which are decelerating much more quickly on average Service Sector wages are coming down faster than manufacturing wages. So im not sure why the fed gave up on that disinflationary trend. It was always going to stall out mid year from a headline perspective. But we are having a good trend in disinflation. The framework they created where they want Slower Growth and slower consumption to get inflation to go down and stay down, to me misreads what happened in the 60s and 70s, misreading what is happening now, and its unnecessary. It risks that unstable part of the economy im talking about becoming systemic. You know, the inability to roll these loans, multifamily real estate loans and systemic leads to bad places you watch the back end of the treasury market sell off like it has, i hate to invoke 87, but i was a young man in the business and remember it disdistinctly. But 2018, similar things happened you cant have instability in the back end of the treasury market and not expect it to revae rever reverberate. Let me drill down i read this phrase in your notes, this is a mistake, the fed has made forecasting mistakes during the inflationary surge. In other words, the probability of nonlinear tightening of financial conditions, fed speaks for market crash continues to grow is that what you are seeing . The probability of a crash the probability of the stock market decline, which is now 10 , accelerating into something that causes, you know, the vix to go to 40 is increasing at a significant rate because because we have this instability in the most important price in the Global Capital market system, which is the back end of the treasury market, ten year treasuries, 30year treasuries the bloomberg liquidity index is back at highs it was at during the dash for cash, march of 2020, where it was after Silicon Valley bank went down. And mortgage spreads are widening, all these things are crucial prices to how the system works. Steven, take him on well, i think the issue for me i mean, you know, youre focused on the markets, im focused on the economy as you said, a lot of borrowers came into this period flush. Households had their mortgages locked in, they had access cash on the Balance Sheet same thing for a lot of corporations so the pain that comes with tighter Monetary Policy maybe isnt kicking in quite as suddenly as it would in a different economic environment but it will on businesses and banks and lots of places thats right. And i think the fed is missing that part of the banking story, to talk to Brian Moynihan or jamie dimon who can manage that risk but didnt take in all the deposits during 2021 because of regulatory policy to cap the deposits they can take and you just think about how smaller businesses operate they just take in cheap deposits and lend it long and they have massive losses on the 30 of their portfolio invested in securities they may not have to realize those, but theyre real. And credit is tightening and so credit tends to tighten slowly until it becomes nonlinear. So thats my underarching or overarching fear, and the markets are giving lots of indications that we could have something more severe before this is said and done. Two steves and a barry, we thank you. Gentlemen, thank you shares of amazon up 7 , and turning positive for the month after the Company Reported better than expected revenue and income and said it is seeing momentum in its cloud unit aws peter bosa has more in todays tech check. So i like the way that the fed laid it out this morning they wrote that aws operating income and timu, unit answers to all three, we got an answer to one, one is on the way, and one is still a question. So the one we have is operating income this is about as profitable of an amazon as we have seen, beabeat ing expectations and providing a strong outlook for the holiday quarter. The second piece of this, still an open question as you mentioned, tyler, there is momentum there, but that still needs to be answered well see this quarter how it performs, especially next to microsoft, which reported better numbers out of its cloud unit. The third one, the open question, timu, that refers to amazons core. That is still an open question as the company said, consumers are trading down, so pin wheel will own temu and it offers basement bargain prices. So its seen as more of a threat to the dollar stores, but if it starts to take share away from amazon, that could ultimately threaten amazons holy grail, that is the prime fly wheel. If you take away advertising dollars, even thirdparty sellers, which were very strong points in the latest quarter, so thats something well track closely as we go into the Holiday Shopping season. If you havent checked out our technique weekly, we did a deep dive into the temu effect. How worried are analysts about that temu effect, as you read it . I would say quite interested. I dont know if theyre worried. It runs the gamete but they are all writing about the temu effect. Some say it could be the amazon killer some say no that amazon prime system makes them different. You stream videos, you get your groceries, they have an advertising model. So one thing i will say, tyler, everyone on the street is writing about it diedra, thank you very much diedra bosa reporting on amazon. Coming up, Mortgage Rates are rising thats hitting home builder margins. So how are they adjusting to the new normal and what does it take to incentivize home buyers up next, well have the ceo of try point homes on the heels of their results. Plus, chech ron is the biggest drag on the dow, falling to its lowest level now in over a year well look into whats driving the decline with crude prices posting their first negative week in three. 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Shares of tripoint homes down more than 2 , despite strong Third Quarter earnings result. The Home Construction Company Reported a beat on the top and bottom lines, surpassing delivery guidance. Still tri point saw a 22 decline in yearoveryear homesale revenues with Home Delivery revenues falling 16 from the same Time Next Year for more, were joined by the ceo doug bower good to see you. Some of the numbers very nice, beating expectations other the numbers a slowdown from last year i suppose no one should be terribly surprised at that, should they . No. Tyler, thanks for having me on as you pointed out, we had a strong beat across the board, and even with increasing rate trends that we have seen, we had sol it absorption. When we measure absorption, we look at sales per community a month. Our number was 3. 3 in q3 which is very good we have a strong setup for the fourth quarter, as we finish the year 86 of our backlog is locked in with our mortgage affiliate at 6. 6 so its a very solid quarter, very solid year that is set up for us so im very bullish this year, and im very positive about going into 24 for those of us like yours truly who dont understand some of the numbers, like absorption, you just cited a 3. 3 number as being very good. What does that mean . I dont know educate me typically, the industry, depending on your price point, you want to sell for each community anywhere from three to four homes per month per community. So think of it that way. I see 3. 3 is a very healthy rate. We plan our business around 3. 25 to 3. 5 so its a very healthy rate, despite the increasing rate environment that we are seeing i guess what strikes me about folks who are in your business is this the Interest Rate environment affects housing affordability. But when you get to the bottom of it, there is a shortage of housing in the United States inventory is low, because owners of existing homes arent putting their homes on the market. So who is going to serve the need of the housing shortage its builders of new homes like you. Youre the swing player here, right . Tyler, you hit the nail on the head if i could throw up a proposition to you, if you could be the ceo of tri pointe and i just told you that your main competitor, which is the resale market, is not producing or selling about 1 million to 2 million homes per year, that translates into a greater market share, greater top and bottom line growth. Thats exactly what is happening. In addition to what you were saying, theres been a shortage of housing built since the great financial crisis its millions of units, depending on who you want to talk to. So the new Home Builders are well positioned to provide product to the millennials, the genzs that are really entering their prime home buying years. As you point out, some are buying homes at a younger age than the millennials if indeed new Home Builders are the swing player here, new Home Deliveries, 1223 compared with 1463, a decrease of 16 , i think thats year over year, comparatively. Why are those new Home Deliveries lower if, in fact, the new Home Builders should be getting a bit of a boost from the fact that theyre kind of the swing player in the market well, orders i believe were about 122 above last year what happened last year, the fed increased rates, as you know, seven times. So the consumer pause for about six to eight months, didnt reengage as we got into 2023 so that comparison to 22, were pretty much all the builders are blowing that out of the water when it comes to orders, and it provides a strong setup for 2024 orders are up a lot, an increase of 122 you think youll dlifer in q4 between 1600 and 1800 homes at an average sale price of 670, 680, thats down a little bit from prior years why is the price point going down, is that because youre having to do things to get people to help with the higher Interest Rates to counteract the higher Interest Rates . So sorry, i summabled there its a good question there. As we have grown our business in the central markets, our Community Count has diversified into the texas and east coast markets. Were building more what i call premium entry level first move up so its more of a mix. At the end of the Third Quarter, our incentives were only 3. 8 and only 2 of that was going to Closing Costs and financing. So as you look at those numbers, thats kind of how it stacks up. And builders, it would appear to me, over the existing home seller, you would have advantages, because there are things you can do. You have a mortgage unit there are things you can do with buydowns and so forth to get the sale done quickly. For sure. And in the Third Quarter, 87 of our buyers had a permanent rate buydown with our mortgage affiliate. But to your point, and this rate trade, or this rate concern, rates dont drive demand demand in housing is driven by household formations, jobs we just reported strong job growth in september, i think it was 336,000 jobs so the Home Builders have all the tools in their tool chest to continue to move product and with the lack of competition in the resale market, we have the ability to offer temporary permanent buydowns with the other incentives and these incentives have been around the industry for years. Doug bower, thank you very much doug with tri pointe homes, thank you very much for being with us. Thanks, tyler coming up, what does the head of the worlds second largest asset manager think about the age old active versus passive investing debate we have a rare interview with the ceo of vanguard. As we head to break, the dow falling as much as 326 points. Right now, down about 285. In terms of sectors, energy, the worst performer. Consumer discretionary and tech, the only two gupinhereros t gen right now. 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. Welcome back to the exchange. The dow down 298 points, a low of 327 to the downside at its high, it was up three points lets take a closer look at the dow, approaching a socalled death cross. Thats when the 50day moving average, the white line there, moves below the 200day moving average. The orange line. Its seen as a potentially bearish signal for the market. The last time the dow showed its death cross technical pattern was in march of 2022 on the other hand, bitcoins recent rally has the krcrypto currency to cross a golden cross. Thats when the 50day crosses above an ascending 200day moving average but enough about golden crosses and technicals take a look at the shares of the automakers ford, missing earnings estimates and seeing demand for electric vehicles falling short of expectations ford remains the only automaker now to have reached a tentative agreement with the uaw those sources say gm is nearing a labor deal with the union. Lets go over to Pippa Stevens now for a cnbc news update israel opened the Worlds Largest underground fortified hospital less than 20 miles from israels board we are lebanon. The new hospital is ready for patients if the area is attacked the space was used as a parking lot with three subterranean floors and converted to a Trauma Center after exchanges of rocket fire started on the border secretary of state Antony Blinken met with chinas top diplomat this morning. He is expected to meet with a u. S. National security adviser, and with joe biden during his threeday trip the visit is the latest in a series of diplomatic exchanges between the u. S. And china, leading up to the xi biden summit in November Open ai, the Parent Company of chatgbt, is forming a new term to study what it calls the potentially catastrophic risk of the technology the company says the newly formed Preparedness Team will try to protect some of the major issues caused by ai as part of the teams work. Open ai is asking people to send ideas on ways ai can be misused for it to study. Pip au, thank you very much exxon and chevron moving lower after missing earnings estimates. Well look at how long until their multibillion dollar acquisitions make a difference and lets get some show and tell in here, where we show you a chart and then tell the story. Shares of intel surging 9 after the chipmakers earnings beat showed progress toward its goal of 3 billion in cost savings for the year but remember earlier this week, intel had its worst session in a month on a report that nvidia and amd are working on armbased pc chips heres what intels ceo told cnbc last night about that competition. Armbased clients have always been lowend, lowmargin products have never made that much of a difference in the pc marketplace. So we feel like if we execute well around the ecosystem, that we have so much ecosystem momentum to benefit from that. rgog dwewee intoo ll here are is it possible . 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So they can focus on teaching and 22,000 students can focus on learning, knowing that their data is secure. heres why you should switch fo to duckduckgo on all your devie duckduckgo comes with a builtn engine like google, but its pi and doesnt spy on your searchs and duckduckgo lets you browse like chrome, but it blocks cooi and creepy ads that follow youa from google and other companie. And theres no catch. Its fre. We make money from ads, but they dont follow you aroud join the millions of people taking back their privacy by downloading duckduckgo on all your devices today. Welcome back to the exchange, everybody exxonmobil and chevron reporting mixed results for the Third Quarter, a quarter where crude jumped nearly 29 . The ceo darren woods of exxonmobil addressing marges on squawkbox this morning youre going to see margins and prices move pretty dramatically with changes in demand so as demand settles down, we see the margins and prices come off. If demand spikes back up again, theres not a whole lot additional capacity, so well see margins and prices move. For more on the results of how to trade the stocks, lets bring in neil dingman. Good to have you with us these companies have been very busy the past couple of weeks. Lets take apart each of their respective earnings reports, starting with chevron. You know, again, i think both were a bit i call a bit sloppy both missed on earnings expectations cap x was a little hotter on exxon side so its not i call it still on the exxon side a good quarter. Its not the great quarter were used to for both of these. Again, i probably wouldnt push on the upstream side for both, it was chemicals, downstream there was just some downtime, a lot of again, just a sloppy quarter, but a bit sloppier than expected when you say sloppy, some parts of the business performed as expected and others didnt. The main driver for both is the upstream, the production business they both did just some acquisitions i tend to like exxons much more than chevrons but, again, the primary business i still think is going very well and as you see prices potentially go up, both have no hedges and theyll continue to, you know, obviously benefit from that but i think in the near term, you always have things offline we just saw a bit more of that in the last quarter than any of us expected. You anticipated my next question beautifully both companies have done acquisitions in the past couple of weeks who did the better deal at the better price we like exxon much better we think that the pioneer puttis this way, i think both will be diluteve, but exxon bought the premiere assets out there at a reasonable price. Youre going to see a big, big upside on that, beginning around ill be cautious and say 2025, whereas again, if you look at chevrons deal, i dont mind hess. But whats interesting is what you are buying with hess is youre buying essentially a play where your competitor, exxon, is your operator. So my point is chevron is buying an asset and saying all right, exxon, youre going to be running one of our biggest assets for us. So an odd acquisition. But you get the hess toy trucks thrown in so lets talk about more broadly ongoing consolidation in this area who will the buyers be everybody seems to say thats going to be more consolidation, but who are the buyers going to be and who are the likely targets . I think the buyers will continue to be the mayor, even though both have now over 15 years running room they always want more. You have a lot of the large independents, names like eug out there, oxy out there just a host of large independents that, you know, potentially would like to get bigger and add more inventory. As far as sellers, you know, we have said before i think number one, theres a host of very interesting private companies, particularly in the midland base, which is very interesting. And then number two, we think theres a host of premium resources in different plays we think those can be very, very interesting targets because they have very good inventory neil, have a great weekend, sir. Thanks, tyler still ahead, the journal declaring last year the worst year in generations but dont count it out just yet, says the ceo of vanguard, tim buckley hell join us up next. And cnbcs global summit is less than a week away i will be there, bringing leaders and innovators from around the world together to share the strategies necessary for adapting and innovating in this new era of business scan the qr code on your screen to register or visit cnbcevents. Com evolve. Well leave that qr code up there for a couple more seconds. 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And when you call, a knowledgeable, licensed agentproducer can answer any questions you have and help you choose the plan thats right for you. The call is free, and theres no obligation. You know medicare wont cover all your medical costs. So, call now and see why a Medicare Supplement plan from a company like humana just might be the answer. Welcome back, everybody. We are now just five days away from the feds Rate Decision on wednesday, powell and company have hiked rates 11 time since march of last year, pressuring the traditional 60 40 portfolio, with the wall street journal reporting that strategy lost 17 last year. It was a bad year for stocks and bonds, and it was the worst performance for that model since 1937 so with another chance of a hike next week, should investors move away from the 60 40 mix . Lets bring in tim buckley, ceo of vanguard. Tyler, great to see you im on the trading desk. Vanguard has revamped its trading desk were in pennsylvania, and talking with the man in charge tim buckley is the ceo thanks for joining us and having us today pleasure to have you here appreciate it so i think the problem right now is investors are really confused theyre confused about the state of the economy, theyre confused should they stay in their 5 tenyear treasuries and stay out of the stock market . Should they go back into the stock market what is vanguard telling investors right now . Bob, stay the course. Boring is successful every environment has its temptations. Believe it or not, right now its cash. We live in a 5 world. The tenyear outlook on stocks, around 5 for u. S. Stocks a year for the next ten years bonds, looking at around 5 . So people are saying im making a little more than 5 , why not just go to cash . The problem is were talking about something new to most investors. Something we talked about in the 90s would be income risk. The fact that you can get a 5. 3 yield, but then the fed cuts rates. You have to know that perfectly. If you are in cash, bonds will have moved away, stocks will have moved away from you stay the course. It gets nice to get paid for your liquidity just enjoy that. The viewers are loving their 5 treasuries, and dont seem interested in stocks yet we talk about a 60 40 split tyler mentioned. Do we want everyone in treasuries the fundamentals of investing have not changed you have this set income strain. Youve got senior claims on assets but you need the equities for growth we always say thats the wind in your sails propelling you forward. So as companies grow, you get to benefit from that Earnings Growth in trying to time that, thats a fools error its one of the fundamental principles vanguard was founded. I want to hear more why you need to understand your risk profile, why Going Forward you need to stay invested longterm. Thats what vanguard has been doing for years and years. Can you get that message out consistently people seem concerned and panicking. We dont see that with our investors. They stay the course and very few transact and move away in their portfolio. That doesnt mean theyre concerned, but they stay the course, and the benefit over the long run if you look at retirement funds, 20 years were finding millennials that are outperforming their parents. They have auld had that 60 40 colleague. Tyler mathisen has a question for you. Tim, good to see you. Im curious, youre probably the largest seller of etfs theres been a lot of discussion over the past few weeks about potentially a bitcoin or crypto currency etf are you exploring it, do you plan to open one, are you going to apply to open one and what do you think of a bitcoin etf as an investment tool for your customers . Tyler, we wont be pursuing a bitcoin etf. Just like we dont use gold as an asset class for our clients we look at Asset Classes, what belongs in a longterm portfolio, and those are the Asset Classes we steer people towards. We dont go towards gold orbit coin or any of those other stable assets. Baby boomers need Financial Advice right now not just what kind of stock picks or mutual funds i should own. You have gotten into the advice business that just started a few years ago. How is that going, and what are you finding people want to know about . For us, its been a booming business full Financial Planning for 30 basis points and for us, its Client Success is determined by the funds they hold and the advice that they get on those funds weve been working on that funds side, can we lower the cost and let you keep more, now we are doing it on the advice side. 30 basis points, all in advice for less than we have an active fund would cost you. Vanguard manages 7. 8 trillion the u. S. Government spent 6 trillion last year, and you manage 7. 8 trillion thats a staggering responsibility and a lot of new people coming into vanguard over the years. Theres been complaints about the service level. I know you are trying to address that what are you doing to make sure the service is at the level vanguard investors are expecting . You bet first of all, the 7. 8 trillion, thats the money of our 50 million clients, and they deserve the best service they are our owners, so we serve them a few years ago, we looked at our service and said hey, were going to make a big jump here, and were going to totally modernize our digital experience 92 of our digital experience has been modernized. Thats not just the look and feel of the flow, thats back in a cloud native, super available, close to 5. 9s availability Client Satisfaction scores have jumped 70 sense a couple years ago when some of those concerns were coming in lowcost investing, thats w founded on 50 years ago. Active investing is coming back but youre still doing it low cost in a way. What would you tell people to do right now who are concerned long term do you know is vanguard successful at educating people on the longterm principles of the company was bound on people can bet on sports as easy as it is to bet on stocks at this time. Its tough to teach fundamentals in investing in the environment right now. I hate when people come to vanguard, they have usually learned a lesson somewhere else about market timing, trading meme stocks doesnt always work for their longterm. They come to vanguard and realize buying, hold strategy, staying diversified, tax efficient, thats a winning game plan for the long run. Tim buckley, thanks for joining us thanks for having us on your beautiful trading floor. Its almost the size of a city block, tyler theres literally hundreds of people here. And its a friday. And everybody is here, the whole team no threeday a week for the trading desk im a little surprised vanguard even has a trading desk because youre not known for trading very much. Classic buy and hold tyler, they still have to rebalance the funds and take in the cash flow. They stay busy they have to make sure they run the best etfs, the best index funds on this planet. Its a beautiful campus, tyler. Thanks for having us. Tim buckley, bob pisani. Muni bonds at 15year highs. According to one aly, nastnow is the best time to buy taxfree munis. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. Fresh, warm hot dogs when im not selling hot dogs, i invest in a fund that advances innovations like robotics. Fresh, warm hot dogs, straight out of my torso one for you, one for you. Oh, youre a messy one. Cool, right . So cool. Anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq100 innovations. Hot dogs fresh, warm hot dogs before investing carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com. Nice footwork. Fund man, youre lucky,ves, riwatching live sportses 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. Welcome back, everybody. Not just treasuries sitting at multiyear highs. Muni bonds as well after a rough couple of years, buyers are starting to come back in the next guest says now is the time to lock in duration since the financial crisis joining us is managing director of sma Portfolio Management at parametric good to have you here. Lets start off with the thing i think is eyecatching, that is the tax equivalent yield for, lets say, an investor who lives in a high tax state like california, new york, new jersey what are the yields on mid and longterm duration muni funds . Again, as you pointed out, tyler, were looking at about 15year highs almost in that intermediate, long part of the curve. If we take a look at arated tenyear maturity bond, were almost looking at a little over 4 on a tax equivalent basis, in those hightax states where the tax bracket is north of 8. 5 , 9 , thats a tax equivalent yield of 9. 5 . If youre a new york city resident, that is close to about a 10 taxable equivalent once you extend out to 15, 20year bond where that bond is 7. 5 just to reiterate, these are highquality bonds from our perspective, that reward from the risk side of things, at least from a credit standpoint, is absolutely incredible and something we have not seen in really decades. You seem to be suggesting, as you try to persuade people to go out on the duration curve a little longer is that you think we are getting close to the point where the fed is done raising Interest Rates am i reading you correctly thats right. Look, i think obviously, we would all love to have a crystal ball to see how this adds up, but i will say this, from a macro perspective, i do think were headed into this period where we will likely see a lot less volatility. The recent rise in rates weve seen over the past two months have already priced in, not only strong Economic Data that continues to come out, but even an additional rate hike if the fed were to keep going through the end of the year. We feel we are close to being done whether there is no more rate hikes or one left. On the flip side, we are starting to see an environment where clients and investors need to position for fixed income and hedge for the opposite, hedge for rates to eventually come down as growth eventually slows down ive got about 30 seconds left if im persuaded here, should i buy individual securities or a fund and etf very quickly. We highly recommend doing a separately managed account highly Customizable Solutions from an even pricing standpoint along etfs and funds and may come in even lower the biggest advantage our clients have in our accounts is the tax loss harvesting overlay. These are extremely tax efficient, customized vehicles you did it in about 34 seconds. Beautifully done Parametric Portfolio manager perunan. It for the exchge ow lch is next. Trading at schwab is now powered by ameritrade, unlocking the power of thinkorswim, the awardwinning trading platforms. Bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. Tailor the platforms to your unique needs with nearly endless customization. And track Market Trends with uptotheminute news and insights. Trade brilliantly with schwab. Every day, businesses everywhere are asking is it possible . With comcast business. It is. Is it possible to help keep our Online Platform safe from cyberthreats . Absolutely. Can we provide health care virtually anywhere . We can help with that. Is it possible to use predictive monitoring to address operations issues . We can help with that, too. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. This is american infrastructure, a prime target for cyberattacks. But the same aipowered security that protects all of google also defends these services for everyone who lives here. Welcome to power lunch. Alongside morgan brennan, im Tyler Mathisen earnings and the economy, inflation comes in as expected amazon and intel report. Strong results both places stocks losing steam throughout the session. One concern we are watching is how will the consumer hold up du