Green for much of the section and that is still the case. The russell 2000 is the big outperformer. The index now up for the past five straight days. And as for tech the nasdaq 100 on an intraday basis, alphabet hitting a new high. Take a look at the picture in yields. Just about everywhere you look on the curve today they are falling. Takes us to our talk of the tape. How much room for stocks to make a run into year end . Lauren goodwin of u. S. Life investments at post 9. Thats what some people are talking about. Were setting up for a run into the end of the year. Do you buy it or no . I think well see upside in equity. The challenge for investors when youre in this late cycle environment, its difficult to get meaningful sector or even style performance for more than a couple of days at a time. Well see what weve been seeing a range bound volatile market. We have not reached a recession or a bear mark yet. What if rates continue to move lower . Thats what this is largely about, right . This rate relief, if you want to call it that, yields going down. If rates move lower that will be the primary driver of a reasonable rebound in the equity market. What im looking for whether thats viable are a couple of things. Of course what were hearing is important, of course the cpi data this thursday are important. When it comes to Market Driven rates its supply and demand dynamics. Weve had a little bit of relief from fed narratives and risk mitigating type of buying. But treasury supply is still overwhelming. We expect it to remain that way. The longterm treasury yields very much in play. Did you say whether its viable or buyable . You could look at it both ways, right . Hmm, which one did i hear . Viable, is it really lasting, are they coming down and going to stay down because of all the issues everyone has been talking about, supply, who the buyers are, or buyable, if you believe rates will continue to go down, therefore you should play for a yearend move in stocks. Okay. So when it comes to buying into duration, were hearing a lot of Institutional Investors eager to do in the ten year and further out on the curve. Im hesitant because when rates are moving around because of the term prepare number as opposed to meaningful changes in inflation rates expectations that leads to more volatile long end of the curve. Its not my favorite place early, when it comes to the equity market, i expect it can be a boon on a given day like today. Fed speakers have been coming out one after the other, i mentioned in about 27 minutes or so we expect remarks from minneapolis fed president Neel Kashkari. One after the other theyre coming out over the last month and saying financial conditions have tightened. We may not have to do anything else. What does that mean . The tricky thing is that by saying that, final conditions have eased. Well, slightly. They were up a lot in september. Relative where monetary conditions are, they are still relatively sanguine. The data has been stronger than expected since 12 out of 19 said they expected another rate hike later this year. But financial conditions, to your point, have been tightening. If we see conditions tighten or and thats not what were seeing today. If we see conditions tighten, that could be a reason to say we could pause another month or for good. At what point do you play for a soft landing . The market moves before you have the definitive answer to many of these questions. You have to sort of see what the market move is and tis pacing and then play it as such, if you wait until its obvious, many missed the move in tech this year, right . Hardly anybody was positioned for it coming into the year. By the time it was obvious, the stocks were up 30 and 40 if not more. I have a slightly different take. The equity market is really good at anticipating the recovery. Heading into it, though, we get head fake after head fake. Im looking at, one, unemployment claims and, again, i think its a market you have to stay invested and rise that dynamic. Lets bring in Liz Ann Sonders of Charles Schwab joining us on the news line. Is that what this is today, just rate relief, a couple days worth of moves lower . Yesterday it was futures telling us rates were likely to move lower. Rates is a big part of it. Notwithstanding the horrific events with hamas and israel, the retreat in oil prices as well. Theyre not back up to the mid90s and the friday jobs report was a little bit of under the hood looking at less sanguine details than just the payrolls beat but also the fact of the s p close to its 200 interday average and on a breadth basis on friday the s p, the nasdaq and the s p intraday at the low point had less than 10 of stocks, so that triggered buyers to step in. Rates, for the most part, are still in the drivers seat for the equity market. Which way are they going to move and drive stocks . I mentioned this idea that as long as they sort of stabilize, maybe around here, if they creep up more that summer gaining for an equity rally, do you buy that or not . I think its the speed more than the level of rates. So i think even a stabilization would probably be a benefit. What i think is worth considering is this idea given fed speakers, a number of them saying the long end is doing the job for us, i think the fact the fed has not stepped in with another hike they didnt promise it but it was very much on the stable, the data havent supported the permanence of the pause. Some may be about questioning the fed and its maybe perverse to think if they hike again that might have been actually better in terms of yields. The market could continue to do well because of the notion of the powerful force, so it wouldnt surprise me. Even if yields settle down. And now we have a new one. I want to you listen to what Paul Tudor Jones said on squawk and we can discuss. Here is ptj. Its a really challenging time to want to be an Equity Investor in u. S. Stocks. Again, you have the Geopolitical Uncertainty which weve come to live with to a certain extent. He suggested you get a recession, stocks could go down 12 programs. Jamie dimon thought geopolitical risk was the biggest for investors still. I think the biggest risk in terms of probability weighted scenarios is still a recession. The median recession over the last 100 years sees meaningful down draw in earnings with a drawdown in the equity markets. That 12 to 13 down is a reasonable estimate. Geopolitical risk can be meaningful because it takes the market by surprise. Its really the underlying elements or structural elements of the risk that drive the market behavior. That tends to be narratives around inflation, if were thinking about the risk were seeing now, a playbook the market has gotten to know. Liz ann, do you want to comment on what paul told squawk box this morning . I agree, it is a tough environment in the equity market and there are so many cross currents which is tied into what you and i have talked about which is what our thesis has been for quite some time now. Weve had recessions in certain pockets, this rolling recession, in housing, housing related goods, the action of the bear market last year. A lot of the underlying action, i think, was tied to those hard landings and some of those segments of the economy. We had this funky cycle of a much later resurgence which has been an offset and, to me, the soft landing versus recession debate is not a perspective thing, its whether we can continue to roll through whereby if and when services get hit, you have stabilization that starts to form into a recovery in areas that have gone through. Thats not a common set of circumstances nor, by the way, is the bear steepening nature of whats happening with rising yields. When the yield curve uninverts, its a bull steepener because of the short end starting to reflect the likelihood of the fed cutting. I dont think thats been the near term calculus now. Since were talking recession, lauren, the idea of sectors that get hit, to liz anns point, hit first in this rolling move. Small caps were crushed and now theyve been coming back, going for five updays in a row. The wall street journal suggesting theyre screaming recession but they can soar, almost time to buy them. Has the time come to buy small cops . They can outperform when the economic picture is improving, and i dont think thats what we get first. From a valuationsperspective, the macro case really i mentioned this earlier i dont see the macro case being decisive for any equity style or sector until we are clearly on the other side of recession or clearly in a what if we dont have one . What if you make the argument that manufacturing data for a better part of the year has been terrible, so that sector was in recession. Its troughed. Earnings expectations are expected to go up. Tech looks pretty good. The earnings are bankable, we think, and small caps, if they look good, what if were past it and we dont know it . I dont think were past it. I wish we were. Liz ann mentioned the underlying data, and i hate to quibble with what looks like just a stunning headline number, but what were seeing in terms of payrolls with hours worked is the average consumer is flat or negative in income growth. The way the economic dominos topple thats what comes next and, frankly, last. Liz ann, what about this idea of the stocks that are in the journals words today screaming recession but are going to be the beneficiaries of a big burst if we dont get one or a mild one but on the other side . You have to start gaming things out, not wait for the moment that is. Thats the theory behind what small caps are rallying though for a limited amount of time. And when you go way down the quality spectrum, its often showing a pricing in of a sharp Inflection Point in the economy. I dont see that on the nearterm horizon. When you think of small caps, thats a huge segment. Which small cap . If youre an index oriented investor start with the s p 600 as a basket. The russell has more than 30 of stocks are zombie companies. I dont think this is the time up get zombietype companies. I understand regional banks are within small caps, too. Liz ann, do you think speaking of banks a couple days away from earnings season really kicking off with the banks, how about that sector . Well, we need to start to see some greater participation. Were about to celebrate the anniversary of the low in the s p 500. Youve had zero participation, in fact, still negative for the bank index. Thats never happened in history. I think you need to hear better news from the small and regional banks. Are we going to get out of the gates okay on earnings or just have everything you talked about bubble up on the surface, uncertainty, ceos like jamie dimon saying, who knows, maybe another hurricane, geo politics are front and center. Consumer spending and credit. You know what im getting at. Earnings will be okay but the messaging from the banks may be less sanguine. Despite the upward move top line revenues have been decelerating. Consumer Price Inflation 45s been as well. I will look at the banks and acrosstheboard whether those costs are resulting in the xhegs maybe for the Fourth Quarter signal pressure for the broader economy. Good having you here, liz ann, you as well. Sorry for the technical issues we had. Well catch up to you again soon. Lets get to our question of the day. Do you believe in a yearend rally for stocks . Head to closingbell. A check on top stocks to watch as we head into the close here. Courtney reagan with that. Solar stocks are getting some relief with sunpower, sunrun and sunnova. T. A. N. Is having its best day since last november but is still down around 10 . And bank of america reiterates its buy rating. They say shares are too cheap. Trading just under 46 a share. Back over to you. Breaking news out of the Sam Bankmanfried trial. Kate rooney from outside the courthouse. Reporter Caroline Ellison is on the witness stand. We just got news involving another Crypto Company binance, the executives used a billion dollars worth of customer funds to buy out the ceo, a big competitor to ftx at the time Sam Bankmanfried told ellison, she said, to borrow from ftx for the buyout because we, quote, have to get it done, that entire stake was worth about 2 billion. She went on to say she started working for sbf and the hedge fund was in much worse financial shape than she thought. It had suffered large losses. She described lenders pulling out and said more than half of the staff had quit. The prosecution really came out swinging today. She was the ceo. They asked if she committed financial crimes. She said without hesitation, yes. Quote, sam directed me to commit these crimes. Were getting a slight break right now, scott. Heading back in but well keep you posted. Kate rooney, thank you so much. Appreciate that. Were just Getting Started on closing bell. Shannon saccocia is with us as we round out a busy week as we head into earnings season. She joins us after the break. Were monitoring Neel Kashkaris remarks. You see Steve Liesman monitoring those. Well get you the biggest headlines as soon as we get those. Youre watching closing bell on cnbc. Nice footwork. Man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. Welcome back to closing bell. Stocks off the high as we head to the close. Lets bring in shannon saccocia, so what do you make of price action weve seen really since, lets call it, late day yesterday and now through today . I think you can somewhat include late day friday in that, scott. Many of us grappling with the devastation in israel are thinking what does that mean for the markets . Why are yields higher . Liz ann made an excellent point. Are they higher on higher inflation expectations, on growth, or higher because we have a supply demand imbalance in treasuries. Youre seeing that additional supply in the market putting a cap on the ten year and thats creating a more fundamentally foundational opportunity for people to buy equities coming into what will be an interesting next ten weeks or so. But you dont believe in the market as it sits here. You certainly dont believe were having a yearend move higher because you want to overweight cash and Investment Grade bonds over equities which you are neutral on. What does that say about your psyche of the market . So i think its a tale of two time frames. Im so glad you asked me, scott. The next ten weeks or so, if you look over the last several years when weve had a tough september, the markets have yielded generally a fairly positive outcome in the fourth qua quarter, and so its about positioning. The cap on yields i talked about and a little less volatility from a rate perspective, Equity Investors will digest that and position appropriately through the end of the year which implies they may put cash back into equity markets. Insed, looking forward to 2024, however, this higher for longer implies we should be longer the stronger parts of the market which are cash, Investment Grade fixed income and even within equities thinking of lower beta, higher Earnings Quality to set up for what we think will be a continued slowing of the economy and, you know, perhaps a mild recession but, to your point, its very difficult to time when the switch will flip. And so just preparing for that continued volatility and compression, if you will, in valuations is how were positioning into 2024. Youre willing to forego a rally and you dont sound optimistic can i make a commend on that . We are neutral in equities, scott. We have a neutral position in equities. We are exposed to the equity market. Within equities our view is you should be rotating into names, not the high growth names with profitability, but, instead, into companies that are stronger and can withstand some of the force that is will buffett them into 2024. By virtue of being overweight cash and Investment Grade bonds and neutral equities, your bias is negative on the stock market right now. It just is. Well there are other places we can be underweight and i think thats important. We invest globally so emerging mark debt is something we have been more optimistic about. We are overweight and believe that the u. S. Equity market is better positioned now because of the u. S. Economy services led economy and are putting our emphasis in the u. S. From apers. You can like the u. S. Better than the rest but it doesnt even sound like youre expecting much out of the first half of 2024 where you expect the conditions to last for a while in your mind. I think we are waiting for that Inflection Point. I think when you look at whats happening, you talk about the jobs report from friday in your last segment, scott, and underlying that data does show a slowdown, and we are seeing a tick up in credit card delinquencies, we do anticipate the consumer will be more stretched. The flip side of that if we see inflation move in the right direction, if this recent reacceleration in energy and food prices abaits and we start to see a little less pressure on the consumer in 2024, that could certainly yield a more optimistic in 2024. Those are not the cards we are being handed. I think from a positioning standpoint, you can still expect that Stronger Companies should be able to grow on the top and bottom line. It will be important in 2024. Even if we get a nice run in the next ten weeks with the potential cap. Shannon, thank you. Well talk to you soon, shannon saccocia. Up next, Neel Kashkari delivering remarks as we speak. Our Steve Liesman monitoring that. lbrg t hhlhthel inusheigigs when we come back. Welcome back to closing bell. Minneapolis fed president Neel Kashkari speaking there live this hour. Steve liesman joins us now with the headlines. Steve, whats he saying . Reporter hes saying we seem to be on track for a soft landing but its too soon to declare victory. And just when you thought there might be victory, if inflation remains high, the fed may have to step on the brakes harder than its been. I havent heard him in t