4. 789 . Meantime, couple of stocks to tell you about. Mccormick, the spice company, reported today. Earnings were lower than last year in line with estimates. Sales also fell missing estimate. Thats why the stock is off today by 8 and 17 so far this year. Airbnb also lower. Key bank downgrading the stock saying the tail winds have been helping the company are starting to slow. Airbnb still up 50 year to date, tyler, but down almost 6 today. All right. Thank you, kelly. We begin with breaking news at the capitol in the effort to ois Kevin Mccarthy as speaker of the house. It is coming to a vote, several votes likely here right now. Lets go to Emily Wilkins on the hill. Emily . Reporter hi, tyler. Well, yes, speaker Kevin Mccarthys speakership is in a very perilous position right now. We know there are at least six republicans who said they will back an effort to oust them and we have a number of democrats as well who seem to be doing the same. I mean, just listen. We spoke with a number of democrats this morning as we left a big caucus wide meeting. This is what they had to tell us. We encourage our republican colleagues who claim to be more traditional to break from the extremists in the chaos, in the dysfunction, in the extremism. Reporter so that was speaker hakeem jeffries. He has come out and said that democratic leadership will be voting against mccarthy. So not saving him, potentially going to a spot where were not even going to have a speaker of the house. Now, right now, the house is taking a bit of a preliminary vote. Theyre deciding on whether or not to move forward with that actual vote to oust mccarthy. If they do decide on moving forward, that vote could occur as soon as this afternoon. Then we could be in a spot like we were a little bit back in january where youre seeing roll call votes and republicans trying to figure out who the speaker is. Now at this point, its not clear who, if anyone, could succeed. Mccarthy, a number of republicans told me they will continue to back mccarthy even if he does get ousted, but at this point democrats and we talked to a number of them, listen to what they had to say. They just say that theres really no trust left with mccarthy. This is someone who betrays his word on pretty much a daily basis. Thats not someone we ought to trust to one run of the most important institutions in the country. Ill be voting against him. He is not trustworthy. And i think you can see that within his own caucus but can certainly see it the way hes treated us and the american people. We are following our leader. And we are not saving Kevin Mccarthy. Reporter as you can see, a lot of trouble for Kevin Mccarthy. Hes lost the trust of many in his own party. Hes lost the trust of democrats. And even though a number of republicans still support him, it just doesnt seem at this point that it will be enough. Of course, well be monitoring the situation throughout the afternoon but there is a very real chance that by the end of the day this house could no longer have a speaker. And what happens, emily, if that happens . Re emily, did you hear my question . What happens if there is no speaker of the house . Reporter hello . Looks like we dont have emilys return there. So well let that question just linger there in the air, kelly. We should add its not helping market mood as we move towards that outcome. Stocks are falling sharply as yields continue to jump and yields are jumping in part because of fiscal problems in washington. The ripple effects hitting not just the traditional interest sensitive groups but really lots of different kinds of them. Bob has more from the floor of the new york stock exchange. Bob . Reporter and kelly, rising rates creating havoc in the stock market across the board. Now, theres obviously the traditional yield plays that are having a problem, simply put, reads and utility, they really cant compete with 4. 7 treasuries. But theres a secondary Group Getting hit. There are plenty of Capital Intensive Industries out there that have borrowing costs that are going through the roof. Two simple examples. Clean power and bio tech. Look here, next to Renewable Energy subsidiary, they just recently announced they were reducing their growth expectations downward because of higher borrowing costs. You see how that is craters affecting the entire area. Borrowing costs going up for Renewable Energy deals a t this point. Another one to look at is bio tech stocks. What would they have to do with higher rates . Bio tech is very capital intensive. They have to borrow a lot of money. That is affecting them. Many of these stocks new 52week low for the bio tech etf, many are small cap stocks affected even more because banks are more reluctant to lend to smaller cap companies. This is creating a very unusually rich environment for yieldhungry investors. Look at these traditional yield plays. For example, verizon, at t, Simon Property group, these are now yielding 7, 8, 9 yields. Is this a lot . Oh, yeah. This is twice what these yields were just a short time ago. Most of them were in the 3 and 4 for many, many years. Bank yields also going up rather dramatically. Key corp. For example, truist, coamerica also in the 7 to 8 area. Tyler, great environment if you want it. Go out and get yields, but a little bit risky because obviously prices moving down means youre not really getting as much of a return as you think you are. Tyler . Bob, stick around. Im going to lean on you for a little history here in just a moment. As bond yields continue to rise to levels we havent seen in many years, the setup for the markets is reminding a lot of seasoned wall street professionals of what happened in, yes, 1987. Lets bring in chief Market Strategist with be riley wealth management. Welcome. I dont mean to overstrain that analogy because there are a lot of things that are different between now and then, most especially perhaps the presence at that time something called portfolio insurance, which contributed to the unwinding of stock prices. But, the things that are similar are that there was a rising market during most of 1987, as there had been up until the last month and a half or so here in 2023. And the other thing that was similar was a rapid rise in Interest Rates which has certainly been the case here in this country over the past year and a half. So, how far off is the idea that conditions are not totally unlike what was at hand in 1987 . Yeah, tyler. Thats a great question. I think its worthy of looking into but i certainly think its important to remember where we were in 87. So coming into october of 1987, markets was at 44 . It was up nearly 250 over a threeyear basis. So Flash Forward to today and say, okay, were flat. The market is flat over twoyear basis and up Single Digits on a year to date basis. Clearly the market hasnt sort of followed that similar pattern. We didnt have interventions that existed in the mid 80s culminating in the month of 87. The treasury yields went up is also a major difference. 6. 3 to 9. 2 in 40 days. When you talk about the markets largely, we learned that the markets went up while that was happening. I would argue right now markets are in lock step with yields. Were not ignoring whats going on in the treasury. Were actually pinned to it. So for the market in august and september, look at one thing and one thing only whats going on the 2 and 10 year and that the driven market activity. To me the difference is polar opposite. Were paying hyperattention to whats going on. Bob, art has skillfully demolished my metaphor. Would you like to pile on or add anything . The concern if you want to go back 40 years, the concern for the markets in the late 70s and into the early 80s was stagflation. We had a weak economy and we had high inflation. I dont see that right now. The jolts report may give the impression we have a really strong jobs market. At the very least, the economy is very stable right now. Might be concerns about where it will be six months but its stable and inflation is coming down. Not with standing the strong jolts report that we saw today. So, these arguments that somehow stagflation will be around and come back and haunt us for a long time, i dont see that right now. I just see us repricing Interest Rates to where they were back before, into 20 years ago, which i dont think is necessarily a bad idea. I dont think its a bad idea for sabers to get a little above the real rate of inflation, which is where youre doing it right now. Youre getting 5 . Youre getting roughly 2 real return. I think thats probably the way it should be. And even though i know the stock market is having a hard time adjusting to that, i dont think thats necessarily a bad thing. Thats much more normal, historically if you want talk about history than what we had in the prior ten years. Art, one missing piece of this which is why i find the washington machination so fascinating right now that we havent had 5 when we had the deficit this large and the debt as large as it is. Investors are looking at unless they hear the fed or some big buyer coming to the rescue of all this treasury supply, theyll test how high yields need to go both at the level with the fiscal backdrop and the speed at which the move happened, im not sure we have seen a full reset of this in the markets or in the economy yet. Thats a really good point, kelly. Order of magnitude how much debt we accumulated. The pandemic piled on a lot of that. Then massive fiscal spend after that. O i think the important thing to remember is that when to bobs point, we have been concerned about stagflation or recession in the front half of this year to being concerned about the fact that the economy is actually too strong. Thats whats driving in a real sense thats what driving yields higher. At some point in time we get out of this counterintuitive good, Economic Data and probably stop watching [ inaudible ]. [ inaudible ]. Very quick fiveword answer if possible, last weekend we asked investors like you what they think the best investment for the last quarter of this year will be . Treasuries, equities, there was oil, there was real estate, there was several others on there. If you had to say on there, best investment for the remaining three months of this year, it would be . Equities. I think equities will out perform the back half of this year. I think were set up for a Fourth Quarter the poll results indicated treasuries, but with equities close behind. Thank you. Keep an eye on markets because the yield on the ten year is about to hit 480 and the dow is down 500 points. Coming up, well go live to the courthouse in Lower Manhattan where the trial of Sam Bankmanfried is beginning with jury selection. As we head to break, here is a look at treasuries right now. We have the 20year, by the way, more illliquid over 5. 1 . Not even on that board, but the more important 10year just a hair below 480. 30year, just a hair below 4. 95. Stocks are reacting quite poorly. Well be back after this. Powering Sustainable Growth in a changing world. Powering Financial Solutions that transform industries. Powering innovation with access to capital. Powering critical decisions with precise data and insights. Powering seamless execution in evolving markets. We deliver our entire global bank to power new possibilities for you. Barclays corporate and investment bank. Powering possible. Welcome back to shoi show. With the dow down now more than 500 points, jury selection beginning today in the trial of ftx founder Sam Bankmanfried. Kate moony is live outside the courthouse in Lower Manhattan. Reporter so the jury, potential jurors broke for lunch. Theyre now back inside the courtroom. Jury selection is under way. Sam bankmanfried watched all of this today from the defense table. He had a new haircut, see the court sketch there. Hes in the front of the courtroom there. Potential jurors, theyre back and we have heard a little bit about some conflicts of interest. They dismissed some potential jurors. One works at a Venture Capital firm that invested in ftx and inside partners. Theres a lot of talk about some of the media coverage. One potential juror said he listened to a joe rogan podcast about it. Theres a lot of awareness about this story ahead of the trial. Judge cap lan saying that these jurors are going to pretty much have to live in a bubble for six weeks. No googling, no reading news, cant listen to the radio. So they have to not consume any media or news during the span of this trial here. The list of questions he plans to ask on that, youve got do you have a negative opinion about crypto currency . Also the Crypto Company fails, you feel that only the owners are to blame . And then, questions around do you have any negative opinions about amassing wealth to give it to charity. Effective altruism as its known. Sam bankmanfried having adhd. They plan to ask people if they never had any personal or professional experience with adhd. They say it will potentially affect Sam Bankmanfrieds mannerisms in the courtroom. Over the collapse of what was once a 32 billion Crypto Exchange ftx. He has been in custody since august. He didnt know about some of the Financial Issues going on at ftx despite being ceo at the time. Prosecutors need to prove intent here. Four of the top lieutenants have pleaded guilty. It will make it hard and challenges for the defense here. At least three executives do plan to testify. Well see if bankmanfried actually testifies. The judge addressed bankmanfried directly at the start of today saying you have the right to testify, even if your legal team advises you not to. The judge said raise your hand if you want to testify, essentially stand up at any point, but really directly was speaking to bankmanfried there. Kelly, tyler . So, of the former ftx executives who had pleaded guilty, did i hear you say that all of them are expected to testify at this trial . And how damaging, i assume, would their testimony be to bankmanfried . So yeah, three out of four tyler plan to testify from what we know. So you have Caroline Ellison also bankmanfrieds former girlfriend. Were expecting a more personal accounted from Caroline Ellison. Gary wang, other top executives and Sam Bankmanfrieds inner circle. He had a Close Knit Group of executives living in the bahamas with him. They have pleaded guilty. Theyre working with prosecutors. Ellison said she knowingly committed fraud. Its an uphill battle for the defense team. I think the fourth executive brian salem pleaded guilty, but we do not expect him to testify. All right. Thank you very much kate rooney, we appreciate it. Social medias new revenue stream meta plans to charge users in europe to add free versions of facebook or instagram. Not unlike the streaming service model. Will users pay up or log out . Power lunch will elo tt ene dig into the metaverse. Is is more and more businesses move to the cloud. So, the question is. Cyber attack as cyber criminals expand their toolkit, we must expand as well. We need to rethink. Next level moments, need the next level network. [speaker continues in the background] the network with 24 7 builtin security. Chip . At t business. Welcome back to power lunch, everybody. The dow is down 504 points right now. Nasdaq off 2 as stocks get hit hard by a sudden surge in Interest Rates. The dow utilities average down more than 7 in a week. But not all utilities are equally impacted and Pippa Stevens explains. Its been a tough run for utilities earlier today it fell to the lowest since may of 2020. Yesterday it dropped 5 . We dont usually see that big of a swing for the utility sector. As we discussed theyre getting hit on both sides. The first is that they have a lot of debt because they are very capital intensive. When rates go up, their costs go up. Then also theyre seen by investors as a bond proxy and investors want those dividends. So, the pace at which rates are going up certainly accelerated but we have been dealing with higher rates for a while now. So the question is why have we suddenly seen this big selloff. John bartlett from reaves Asset Management told me it all started with last week now we have a crisis of confidence within the industry. So last week a drop down of one of the assets, to a subsidiary, they were not going to do it anymore because they got too expensive. Then the market took the next step of saying, well, if they dont get money from that, are they going to have to raise more capital to fund their operations. The Energy Partners cut Cash Distribution outlook because they no longer have that asset so theyre not growing their rate. And so theres just a lotof head winds for the industry right now. But he said you can still focus on companies that have good balance sheets, so thats names like dte energy, cms energy and nisource. The whole sector is coming down with nextera. Pippa, thank you very much. Pippa stevens. Highyielding parts of the market have not been a place to be lately. Ahead on power lunch, spinning wheels. Why the uaw strikes put a dent in car sales. Or could accelerate them for now at least. Well get the last rd teeaon the auto market after the break. This is Spring Semester at over 13,000 us school districts, which have become top targets for Ransomware Attacks. But theres never been a reported Ransomware Attack on a chromebook. Which is why thousands of schools like the fairfieldsuisun Unified School District switched to google