Transcripts For FBC The 20240703

Thank you very much. Multiple potentially marketmoving plates are spinning in the air as we kick can off the final hour of trade. Weve got stocks in the red on this day after the Federal Reserve left current Interest Rates on pause but hinted one more rate hike is coming by year end. Weve got the dow down 232 points, s p losing 55. And youre looking at a live picture of the south lawn of the white house where any moment President Biden will greet ukrainian leader zelenskyy, Volodymyr Zelenskyy, before their bilateral meeting this afternoon. It comes after House Republicans again torpedoed their own procedural vote this morning that would have allowed debate on a defense spending bill. General dynamics actually hit a 1year low earlier today. Youve got that in the red, lockheed martin, rtx which used to be raytheon. The funding deadline is just 8 days away, and clashes over military aid for ukraine are part of the holdup. But Charlie Gasparino learned last night wall street is ready to send the opposite message to ukraine. Yes, he broke the story here first yesterday. Theyre ready to open their wallets. Yeah. Partially. [laughter] you know, we should point out that we broke the story on the claman countdown yesterday that, i would say some of the richest men in the world were assembled to meet with zelenskyy at the behest of jpmorgan which essentially invited these e folks in there. Theyre a whos who of guys with billion after their net worth. And they all a assemble at this place about, in midtown manhattan, and they met with zelenskyy to talk about rebuilding. And you can see theres two sides, some of the people are right there. Its a whos who, everybody from Mike Bloomberg to ken griffin, bill ackman, larry fink, our friend from blackrock, was had a private one on one by himself with zelenskyy right before. Liz wow, okay. Jpmorgan and blackrock both are the Financial Advisers s. And heres what theyre going to do, as important as it is to get u. S. Money, taxpayer aid flowing to the ukrainians so they can fight, fight Vladimir Putins aggression, private money is how the ukraine is going to survive and thrive in the future. And in order to get private money, reconstruction money that builds stuff, builds hotels, hopefully, makes ukraine a thrive thing economy thriving economy, you have to do stuff that essentially gives someone hope whether its one of those guys or anybody else, hope of return on investment at some point. Theres two things that stop the return on investment for the ukraine right now. Number one is the war. We all to know about that. The war is at a stalemate right now. You know, maybe it remains as a stalemate. The eastern side of the country the western side of the country, by the way, is very warfree very peaceful. So theres places to invest in western ukraine liz that in and of itself is a miracle. Miracle. But the other part, liz, that basically scares some of the people in the room and will prevent full money going to the ukraine from the private sector is corruption. This is not, so this is not russia, you know . Vladimir putins at the top of russia, hes like the godfather. His capital regimes are all the oligarchs. They either kick money up to him or they die. This is not quite that. But they to have their own form of crony capitalism where theres grift between the government and business interests. Liz those were accusations when poroshenko was running the country but these guys are not going to put money into that country unless they have some degree of hope for return. You dont get a return if theres crony capitalism and corruption. Liz theres plenty in africa. They put money all over the world. Well, thats i dont know, are they really developing those the african countries like they want . Theyre not. We should point out that zelenskyy said he gets it. He actually said, you know, we want your money, we want whats good for you, we want whats good for us, but we know it has to be good for you. I understand capitalism. The one thing i think concerned people, i think it was bill ackman asked explain the corruption part, why arent you getting rid of these people . He did say he doesnt is have full power to get rid of everybody thats correct. Theres a Prime Minister, hes the president. The Prime Minister has more of that power. It was odd, but i think that gave people a little more, a little hesitancy. He also described, like, his powers as he was speaking, obviously, in ukrainian at one point. He didnt know what the word wall, he didnt understand concern he wanted to say in english there is a wall. So he tells one of his aides, his aides come back, and he says, okay, theres this thing called a wall. Its the my limit to how much i can stop some of this stuff. Liz charlie, good stuff. Thank you very much. Yep. Are. Liz well see whos the first to really open the up the checkbook. I think youve got to get rid of corruption first. Liz good to see you, charlie, thank you. Many republican lawmakers have said they will not sign a spending bill that includes ukrainian aid. Senator rand paul on fox Business Today said he will block any spending stopgap that includes ukraine funding. Listen. I think its irresponsible to think about their country before i think about my country. And the american taxpayer, people are struggling in our country and are asked to fund it, i think its wrong with. Liz well, hes headed for a battle, because President Biden will reportedly announce an additional 325 million in ukraine aid today after he meet es with ukraines president zelenskyy. Data analytics giant palantir has been giving nearinstantaneous information to the ukrainians on the battlefield, credited with helping ukraine defend if itself against russia. Ceo with alex karp just in the chair right now, the first major western executive to go to kyiv. He joins us live from palantirs Software Conference in d. C. Alex, thank you for coming. Its a delight to be here. As always. Liz thank you. I have to yeah, happy to be here. Liz what do you make of not just senator rand paul, but many others in congress digging in their heels over funding for ukraine . I mean, this looks like a real stalemate, and we have got eight days before the government loses funding. Well, look, i mean, im supey where we have First Amendment rights. Im kind of a First Amendment rights zealot. I think everyone should express their opinion. My opinion is that you create peace through technological superiority. We have to show the rest of the world, especially our adversaries but also our allies, that we can deliver the most important and powerful Weapons Systems to allies and project power in the regions that are dangerous. You know, obviously, you know, look, ive spent 20 years with people disagreeing with me on supporting the dod in Silicon Valley where its not popular, and, you know, of course there are some people who think that you will make the world safer through, you know, not confronting our adversaries. Its a legitimate position, i disagree with it. Liz on the battlefield, just so people understand what palantirs able to do there, youve been key in the target coordination cycle, so to speak. You help the ukrainians find and track the target whether thats a russian tank column or a weapons depot, and then the decision to act is a made by humans on the ground. In days gone by, that cycle took hours. With palantirs engagement, it takes, what, 24 minutes. A lot of gop members are china hawks. Whats the likelihood that the success ukraine has had using Palantir Technology might have a Chilling Effect on china as it mulls positions on how to deal with taiwan [audio difficulty] you guys could be that. Well, you know, obviously we have a massive presence in the u. S. Government, most of which we cant talk about. What i think will be a deterrent to china is to the extent america which really has nearly every company in the a. I. Software field that is worldbeating, worldleading, transformative, these technologies have to be, a, made available for the, to the, the the od to the d the od. Currently theres no requirement of Tech Companies in the west to supply our technology to our dod. We need to change that. We need to reform the culture of Silicon Valley so that people enthusiastically support deterrent efforts. And we need to limit the export of these technologies to our adversaries. So, you know, i have my own my my myopic interest of supporting our nearlybombastic growth in u. S. Commercial, but what i care about as a citizen is we are in most industrial revolutions people participate relatively evenly according to g the dp. In this revolution its really the the u. S. And no other country in the world. How do we maintain the military spear worety that is as great as our intellectual and ask and moral superiority vis a vis a see our adversaries. And we to that by limiting exports, enforcing all Tech Companies to sell any product they develop to the dod and by all of us engaging in helping our Defense Department both intellectually, philosophically and, of course, with our technologies that can and should be used as weapons of war to scare the begeners out of our adversaries. Liz well, that would be are russia too. And you at palantir absolutely do not do business with russia or china. But what is the danger of not supporting ukraine in its fight against russia whether its with your Battlefield Technology or Something Else . Well, you know, i mean, look, the obviously, i believe that any sign of weakness will beget violence, danger both more danger in europe and more danger all across the globe. So, and i, we believe this at palantir. Its not just that we sell to the dod, its not just that our products are crucial to National Security across the western world. We are a beliefdriven organization. So its the not surprising that i believe that. Its also not surprising that European Countries, one of the things that you see is not well known, but the European Countries that border are russia, they believe this. So typically people who are in a dangerous border or perceive the danger have clear minds on this. But, you know, we are a diverse country politically, and we have to bring the argument to our peers that we believe, you know, that if we dont maintain a superior in our military Technology Context the, we will all suffer. Liz well, you guys have harnessed a. I. To remove some of the friction on the battlefield, and its the been really gamechanging. Of course, last week senator Chuck Schumer invited top tech leaders, you included, to the senate, and there was a behind closed doors conversation about sort of guardrails or ringfencing as far as regulation is concerned of a. I. And this isnt necessarily with the battlefield, but perhaps in the enterprise world or social media, etc. You know, there were no independent scientists, as with we understand it, in the room, and there were the some complaints that thats almost like letting the fox guard the henhouse. You guys are capitalists, and thats understandable. Youre in it to make money, and weve seen in the past where there was digging in heels with the social media with guys zuckerberg, obviously, elon musk and, you know, everybody else in there they did not want to see regulation. So what is the answer to that . Dont you think that there should be some independent voices . Well, you know, of course no one believes you when youre making money that youll argue a existence your pocketbook. Let me argue against my pocketbook. I think we do need regulation. We need regulation to prevent the risk to our civilization should a. I. Become uncontrollable. We need some form of regulation to make sure that governance insures the privacy of our data, for example, in health care context, that reduces abuses that include discrimination. It is true that i have a capital interest, but i would say my primary interest and the interest i advocated for in that room were about National Security. I did not advocate purely for palantir, although obviously, my view, we have the best Software Products in the world. [laughter] i advocated for well, you dont is have toed a slow candidate or if its true, that would be a legitimate pushback. But with i advocate for reducing exports of our technology to the the adversarial countries for, for requiring every enterprise in america to give their, sell Hair Technology to dod their technology. So no for more of this b. S. I make a ton the of money in america, but i cant somehow work with the dod. And intellectual engagement on these ethical issues. And it is the true that there are conflicts of interest, no doubt. But its also true you need the technical experts on this. And one of the ways you prove youre a technical expert on technology is building something that works. And something that works in this context is very, very valuable. Liz right. So you are going to need people who have actually built things. Now, i personally think my impression of the room is there were a lot of independent, data ethics experts in the room who were not capitalists and dont intend to become capitalists, and i think leader schumer e did a really good job of bringing people in a room who otherwise would never be there. Are. Liz you were seated next to elon musk, a lot has been made about that. And palantirs warfare system uses this meta constellation platform which basically tasks hundreds and hundreds of satellites to get their imagery and then feed that down to the battlefield. You know, id just like to know, are you still using starlinksome i know you have before. Thats elon musks spacex satellite constellation. I ask that because he has, hes kind of fan boyed over, you know, vladimir putin. Hes said some very, very sort of lovely things about that autocrat. Its a little disturbing, especially considering putin has been somebody again, free speech, i get elon can talk about that, but with you still using the starlink satellites . Yes. Look, i so i have a, i have a varying view on this. If you go to a surgeon, you dont agree with them and theyre the best with surgeon, you still go to them. Look, i know elon, i like him, and i think hes a super important entrepreneur. We dont have to agree on everything. His products work. I am in the business of delivering. You know, you could ask him, you know, will you stop using palantir because karp is going to support ukraine. You know, i will use the best products available on the market to help our allies and hurt our add a very shares. And for me adversaries. And for me, if youre supplying the product, i will use it, and you do not have to agree with me as long as the technologys reliable on the battlefield. And im very happy to fight you intellectually over a cup of coffee, a beer or a run. Liz alex karp of palantir, thank you. Stock up 1 19 . Meet the team. Behind the team. The coach. The manager. And the snack dad. All using chase to keep up with their finances. The coach helps save goals here, because she saved for soccer camp there. Anddd check this out. The manager deposited a check. Magic. And the snack dad . Hes getting paid back. Orange slicesss. Because this team all has chase. Smart bankers. Convenient tools. One bank with the power of both. Chase. Make more of whats yours. Is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. Explore endless design possibilities. To find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. Gold terra is drilling deep and rediscovering high grade gold. Their project in Northern Canada has already unveiled nearly 2 million ounces of high grade gold, with a Strategic Plan to uncovering millions more. Gold terra resources. se fue la luz pero todavia tenemos wifi para hacer las tareas. ¿y eso es algo bueno . Wifi y estudiar. Buenisimo. Wifi y pedir una pizza online seria buenisimo. Presentamos storm ready wifi. Solo de xfinity. Ahora puedes mantener una conexion confiable durante apagones, con datos celulares ilimitados y bateria de respaldo de hasta 4 horas para mantenerte conectado. Obtenlo solo con xfinity. El hogar del 10g network. Enterate mas hoy. Liz fox market alert, well, just look at the numbers here. You can feel investors disappointment in the Federal Reserves latest message. The nasdaq is getting hit hardest as far as percentages are concerned the day after bond yields surged because the fed sent them going sky high with a heavy hint that one more rate hike is going to come by the end of this year. We have got sorry, im choking here the nasdaq down about 1. 5 . Look at the 2year, 5. 13 , it soared to a fresh 17year high earlier. The benchmark 10year yield at 4. 474 . Still brushing up to 4. 5 . We do have the fed actually, yeah, almost there. The fed did indicate its the close to ending this current rate hike cycle. Joining me now in a fox business exclusive, blackrocks Global Fixed Income chief rick reider who has been here many, many times to talk about how great the yields on treasuries are, but is that starting to change to corporate debt . So id say a couple things. First of all, i know people find it boring, and i think the last time you said whats your favorite investment, and i said commercial paper, like, 6month paper. Today its 6. 5 percent. Its pretty incredible. I have been doing this for a long time, you dont have to go after yield curve, like you were talking about the the price pressure for investors is significant. You get so much yield being in the front end of the yield curve that its, i say its nirvana for investing. Liz 1month, 5. 38 . Thats what its yielding. I mean, its pretty stunning to see 4month, 6month at 5. 5 . But now youre starting to see Corporate Bonds look really, really rich. The team pulled up a bunch of them. I know you dont really comment on individual ones, but when you look, say for example, at dish network, okay, this is for a coupon that matures granted, not 6 months, but 2027, 111. 75 . 11. 75 . Thats amazing. Cloud software group, 9 . Picard, 6. 5 . Directv financing, 5. 8 . Thats beautiful, isnt it . Listen, these yields, by the way, theyre going to be with us for a while. When the fed stops which, you know, do they do one more hike . I think they probably want to get one in, but when they stop, theyre going to sit here for a while. So part of whats nice about fixed income, yes, i think people should start putting money to to work at these yield, but you dont have to race because were going to be sitting here for a while. By the way, across some of the mortgage products high quality investmentgrade credit you get 6 plus and hen the, you know, i want to stretch a little bit more at 8. 59, pretty Good Environment to get yield, but its not going away for a while. The thing thatll be interesting next year is the fed start cutting rates. I thought it was disappointing yesterday about how slow they talked about theyll do it, but theyre going to start cutting rates. The economys slowing. The feds being dealt an interesting set of cards because the economys slowing. Listen, i think theyre going to have to start the i cutting rates. Liz when . No, i think think the second half of the year. Listen, i dont think theyre in any mood until employment really starts to stagnate, and youre seeing some pressure. Job openings are coming off, youre seeing the cyclical parts coming down. But they need to see that in a more consistent way. And then, you know, then you take some of the pressure off of wages, take some pressure off of service inflation, so a few more months. Liz and then youll start to see yield ares coming down. However, with the corporates, Charlie Brady was doing a quick search, and he basically looked at companies with a market value of a billion or more that have Credit Ratings of a a a, aa or aaa, and there are only 7 of them, j j, microsoft, google, apple, amazon among them. Only 7 made the cut, so what is your lowest level for the rating that people should be purchasing . Is so, i mean, listen, it all depends on how much you own many ec by by it is, because equitieses, because if you say, hey, im taking beta risk, volatility risk, you dont need to stretch very far. My funds, we run 6 if. 57 for Investment Grade type purchase. My etf, you know, were getting actually now 7 yield. Its the almost a single arate liz give that ticker symbol. Binc. We dont have to stretch. So if i want to get 9, if i want to get 9. 5, then you go down into the high yield. Listen, i dont think youre going to be to have a big credit cycle because the economys still in pretty good shape. But, gosh, to clip a nice 7 and say, you know what . Im going to take some equities for upside, you can build a nice portfolio to get you close to a doubledigit return. Think about it, if next year that 7 all of a sudden the fed starts dropping Interest Rates, your 7 can turn into with a doubledigit return for a why quality high quality yield. Its pretty attractive today. Like i say, you can sit in cash and clip a nice yield, but i think over the next six months people will anticipate. The fed starting to cut and youll get people doing some more things many fixed income. Liz thats why we love you speaking to our viewers and giving them that a guidance. Appreciate it, thats great. Liz rick reider of blackrock, see you next time. Dow jones industrials down 2711 is points, we are come 27 points. We are car coming right back. I was a bit nervous at first but then i figured its just walking, right . [dog barks] oh. No its just a bunny calm down taco. Sit duchess. Stop sesame no no. Archie walter dont, no, ahhhh. Ahhhhh youre lucky youre so cute. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. There are some things that go better. Together. Burger and fries. Soup and salad. Like your Workplace Benefits and retirement savings. With voya, considering all your financial choices together can help you make smarter decisions. Voya. Well planned. Well invested. Well protected. I have type 2 diabetes, but i manage it well. Jardiance its a little pill with a big story to tell. I take oncedaily jardiance, at each days staaart. 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According to the report, executives at alphabets google have discussed designing the chip inhouse which would save the tech giant billions of dollars. Yeah, so you could expect that broadcoms shares would fall. They are down 2. 5 but well off the earlier lows. Google and broadcom have been squabbling over chip pricing. And, by the way, google has also been working with Marvell Technology to replace broadcom on another advanced chip project. Investors are kind of losing their appetite for darden shares after the Parent Company of bahamas ma bahama breeze after seamconcern samestore sales fell more than expected. Customers ordered cheaper entrees and fewer alcoholic drinks. The company did, however, beat q1 is earnings and revenue estimates and announced that Cindy Jamison will take over as chairman following the retirement of jean lee. Shares are down 1. 7 . Fedex delivering for investors after beating analysts estimates for fiscal First Quarter earnings. The shipping company has cut costs and grabbed customers from rivals ups and yellow. As we approach the important holiday season. Executives at fedex did, however, indicate that the industry would likely see a muted peak season. Ubs raising its price target on fedex, regardless, from 312 to 323. Right now its at 262 and change. And Morgan Stanley raised it from 200 to 20 the 5. Shares right now up 4. 75 . Kb home slipping about 3 after announcing Quarterly Results that fell yearoveryear. The home builder said high Mortgage Rates along with still strong home prices is are cut into housing affordability, pushing some buyers out of the market. Ubs retained the company as a buy after raising its price target to 86 68, right now kbs at 46 and change. Still keeping with the home builder theme, the number of previouslyowned homes in the u. S. Plummeted 15 yearoveryear as Mortgage Rates leap higher. But home builder Taylor Morrison home has surged 42 this year. 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Bring it to safelite. My customer was enjoying her new car, when her windshield cracked. [gasp] customer my car tech vo she didnt take it to the dealer. She scheduled with safelite. We have the latest technology for the newest vehicles. And we do more replacements and recalibrations than anyone else. Customer thank you so much. Tech dont wait schedule now. Pop music singers safelite repair, safelite replace. upbeat music awww. Awww. Awww. Nope. Constant Contact delivers the Marketing Tools your Small Business needs to keep up, excel, and grow. Constant contact. Helping the small stand tall. Liz breaking news, okay, just momentsing ago ukrainian president Volodymyr Zelenskyy did just arrive at the white house. President joe biden greeting the ukrainian leader on the south lawn ahead of bilateral meetings scheduled at the white house which should begin in just a few minutes. The white house is expected to announce an additional 325 million in ukraine aided today. You are now looking at a live picture as hay walk toward they walk toward across the colonnade to the white house private meetings. Theyre going right to the oval office at the moment, and that is where they will meet. What do we expect with this pay package . It could include cluster munitions, demining equipment, Something Like 155 artillery shells. It will be announced later today, and fox business will, of course, be carrying that along with foxbusiness. Com. Lets shift gears here and talk about the home builder situation is and the homeowner situation. Previouslyowned homes sold at the slowest pace since january. According to a report from the National Association of realtors, existing home sales fell 15. 3 yearoveryear in august. Okay, so weve talked about high Mortgage Rates, thats certainly keeping a lid on it. Low inventory also continuing to pressure the housing market. Taylor Morrison Homes seems to have laid its foundation correctly, the stock is up 78 over the past year. So lets bring in the leader, Taylor Morrison ceo and chair sheryl palmer. Well, were looking at all kinds of numbers, slowdowns, existing home sales, new home sales. They look like crosscurrents, but some of them are outright headwinds like Mortgage Rates. What are you seeing on the ground . So you said it well, theres a lot of things going on. When you think about the numbers that were reported today, i think you have to peel back the onion. First of all, its really around closings more than sales, but these are houses that were sold a few weeks back, right . Liz correct. I would probably put it into three different camps. One you said, inventory. If theres bun takeaway, new and retale inventory re retail remains so, so tight. I mean, the average age of a resale home today is about 40 years old. So you think about paying higher prices, higher Mortgage Rates, and then you have some work to do. Liz are you guys stepping it up . Thats why the advantage quoses to new, right . Because goes to new. One, were hearing that our consumers have a preference if for new. They dont want to redo their houses. Two, as you said, with Interest Rates moving, liz, we have the ability at a very affordable level to help the customer to their new front door with, you know, discount points, forward commitments. And it works 34 to the 1. So i can spend 15, 20,000 to help a customer, and that might be 6070,000 in price to get to the same mortgage payment. Liz Building Permits saw an increase of about 6. 9 last month. What is your production pick picture and your picture and your Ground Breaking which comes after the permits . What is that looking like, and you compare it to, say, the tart of the year . Absolutely. And it was interesting, because earlier in the week when both starts and permits came out, people were concerned about the starts number. But there was a lot of noise in august as well, right . We had a hurricane in florida moving through the carolinas, that affect starts. The permit is kind of your future trend, right . So we continue to see increases in new permits. Were doing the same. When i look at our production from yearoveryear, were up significantly. Finish what i think were doing as well as many other builders are trying to align kind of those starts along the with sales. We havent reported our Third Quarter yet, but as we talk about in our second quarter, we continue to see strong momentum as we move through the summer. Liz part of the housing shortage is a that people dont want to i move out of their current homes because they are locked into a very low interest rate, well below what we see today which is above 7 . Thats right. Liz how do you sort of break that logjam . Well, its a difficult one, right . Because with, to your point, Something Like 990 of the 90 of the homes today, the mortgages today, are under 60 and Something Like 70, twothirds, maybe urn 5. So when rates are in the 7, high 7s, youre not even seeing really what rates are, because published rates are showing something a bit lower, but Home Builders do have the advantage. Once again, i can help them and and really personalize it to a consumers individual needs. Some of them need help with closing costs. System of them want, you know, they need a lower payment today but in a couple years they know they have a runway, so we can do some, you know, buydowns, or we can help them with a to 30year fixed rate thats lower than market today. Liz weve got fannie mae predicting well slip into recession. Listen, if i had a dime weve heard that before. [laughter] liz but they predict a recession probably first half of next year. Due to housing hurdles. Thats their purview is. Yep. Liz which way is the wind blowing when it comes to recession . What are you saying . I would tell you housing already saw its recession, and that was really the end of last year. And it was shortlived, right . A time when rates took that 3 to 66. 5 jump, that was a shock. Its hike if gas goes up 50 cents, people stop driving as much. Thats what happened. Whats really, i think, worked in our favor obviously in addition to the undersupply that we have in this country today, and and, liz, that number is anywhere from 26 million units. We cant catch up. We continue to build on the deficit of homes today in this country. But housing already went through. I think the undersupply continues. Not that we wont have some bumps along the way, but i think were still going to have a lot of runway ahead. Liz okay. I like to end on a positive note, sheryl. [laughter] thank you very much. Thank you. Liz the uaw strike we dont have positive news right now to tell you, its showing no signs of stopping as the nations other major labor action actually could be nearing a conclusion. Were going to go out to hollywood for an update on the writers strike. Yes, there may be glimmers of hope here. Thats next on the claman countdown. Lets check the movie studio stocks, paramount, discovery, warner brothersdiscovery, almost everybodys in the green. The traditional studios mt. Green, but look at netflix, down half a percent. Were coming right back. Is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. Explore endless design possibilities. To find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. Blackrock silver is bringing new life to one of the Great American mining camps in the silver state of nevada. With a new resource estimate imminent, one of the highest grade silver projects in america is about to get bigger. Blackrock silver. Liz we are less than 22 hours away from fridays deadline for the uaw strike to expand. Union president sean feign warned earlier this week more members will hit the picket reince if they do not see substantial progress in contract talks. The most recent proposal came from stellantis on tuesday but the company has not released the exact details of it. While it appears to be impasse again appears hollywood may have finely produced a contract the Writers Guild of america is interested in. Top studio execs and writers had a facetoface meeting yesterday and according to the reports the discussions were very encouraging. We want to get to los angeles and kelly ogrady. Kelly, the strike, wga, lasted more than four months. What are we hearing about a hollywood happy ending . Reporter this is breaking news. The folks ive been talking say they are much closer than a week ago and we could see a deal as soon as tonight. Fingers crossed on that one. That was the first meeting in nearly a month. Remember the writers were striking since may. They were joined by the actors in july. The ampt and wga met and reportedly joined by the big four studio heads, bob iger and disney and netflix. They were a percentage point eye part on yearly pay increases as well as fighting over access to streaming viewership data that woe form residuals. Talks were encouraging and following the meeting they released a statement, the joint statement said quote, the wga and ampt met for bargaining today and they will meet again tomorrow. Some of the big four are expected to meet with the talks and that would would be huge for economy and california. Things have been shut down. I see you noticed your favorite fall tv shows are not starting this week as they usually be. Gavin newsom says this already cost californias economy five billion dollars. The ongoing strikes are causing problems for reality tv. Abc dancing with the stars was expected to be safe for impacts. Picketers are targeting the rehearsals. Matt walsh said he will not participate until a agreement is released. If there is agreement tonight it could likely set a precedent how a. I. Is used in other industries. Well watch closely. Liz that is a huge headline, as soon as tonight, according to our kelly ogrady, thank you very much for that reporting. Closing bell were six minutes away, session lows right now with the dow down about 351 points. The s p having the worst day since march and 67 point loss. Were on a happier note, fewer than five hours away from week three of the nfl season on monday night football. The undefeated. San francisco 49ers, with one of the best guesses in the league take on the new york giants. They hope to bring home the lombardi trophy, you knew there was a transition. Frank, how do you play defense and what names add to a defensive portfolio right now . Sure, and that was a great leadin, thank you for having me back, liz. You know, youre absolutely right in this regime of restrictive Monetary Policy which we would say is going to last for a while you know defense is definitely where you want to be. Companies that can have insulated cash flows. So we would one, favor fixed income over equities and within that we would be looking at credit, higher grade credit and then if you wanted to be in the equity space we would look at the japanese market. It is one market that has positives Going Forward in that one, you have a very cheap currency. So they have a lot of excellent companies. Their profits would look much better. Inflation around the world is a problem which actually helps japan. They had a deflationary mind set for so long but that is changing. Companies are focusing on roe which is very low, activist investors are stepping in to try to get the companies to be more profitable. Lastly you have opposite of u. S. You have companies where the dividend yield is the higher than the government bonds you can buy in that country. In the u. S. It is the opposite. We have a cash rate, five, 5 1 2 . You had that chart up earlier in the show. So its the opposite of that. So there is a lot of positives going on right now in the japanese market. Liz frank, i want to believe you but people have talked about money being just dead in japan for so long. There were so many lost years where you know sear owe, below zero rates, it was just a disaster, so what gives you the biggest sign thats the place to go now . Because if youre right could be a big opportunity for people . Yes. And i think youre on the key point. Were seeing kind of a secular change here. You had deflation for so long. What does that do . People say im not going to buy, not going to invest today because things will be cheaper tomorrow. Inflation in part is changing that. You talked about the roes of companies. This is concerted effort as activist investors are stepping in to push it along, your roes are below 10, they should be much higher. One of the only positives of the inflation story, to bring those roes up and manage these underutilized Balance Sheets better. You do have earnings power, and currency at 30 year lows which is just going to make any overseas profits, it will make their products look that much more attractive when they sell in foreign markets. I got to believe the markets which are really taking a leg down here, we discuss hit a new low of loss of 363 points on the dow, 236 points on the nasdaq here, i got to believe some of this has to do with the looming government shut down. How do you see Something Like this playing . It is always short term, because these things never have a long tail when it comes to affecting peoples money, but this is getting disconcerting, is it not . It is and i think where youre seeing it play out, it ties into the fed story. The fed, say theyre very data dependent. You listen to what powell said earlier in the week, kind of Collateral Damage of the potential government shut down if it occurs on october 1st, the statisticians that put all these statistics together of nonfarm payrolls, inflation they have been deemed in the past as nonessential workers. What does that mean . They get furloughed. Were not getting statistics right in front of the navy november one fed meeting there, was speculation that would be the final hike. Youre sighing odds of rate hike in november come down t was north after con flip right now. Now it business a quarter, and that hike might be pushed out to the december meeting, at least that is what the market is currently doing. Youre pushing out hikes even longer so you are seeing some colate al damage in terms of how the shutdown would have effect on the fed and markets at the same time. Liz it is happening right now and its happening with some of the each pose that happened this week ipos that happened this week. Arm fell below its ipo price 51 a share. Lows of the session. Things are not looking terrific for instacart. That hit a new low of 29. 90. Are you avoiding any kind of fresh and momentum style names that are glittery . Well you have to look at the comparable assets. So if we start with the fact that cash is yielding five, 5 1 2 , i need an equity risk premium thats going to be well in excess of that and thats where you look at earnings growth, its been negative over the past year. We think its going to contract even more as economy with tight Monetary Policy. Liz okay. If that is the case it will be difficult to get stocks higher. [closing bell rings] liz there goes the bell, frank. We are seeing selloff after the big fed decision. Billionaire investor mark mobius joins us live in a fox business exclusive. See you then. Larry hello, folks, welcome to kudlow, im larry kudlow