And bitcoin above 30,000 as the sec may allow a spot in bitcoin etf that conveniently would expand its own authority. Is it the right move in a former cftc commissioner weighs. Charles schwab leading the s p after its earnings and well preview more results and get the trade from goldman and b of a and thats coming up with Earnings Exchange. Lets get a quick check on the markets where stocks are higher across the board although the dow is 100 points below the session highs and very similar for the s p, up 46 or so to 4373 and the nasdaq a similar move. The tenyear yield back up to 7 and its interesting to see that not exert more pressure and 471. 6 and the 30year nearing the 4. 9 level witness again. So is this good mood in stocks a positive sign into year end or is it all just a head fake. Joining me to make sense of things is Hennessy Funds chief Market Strategist and its good to have you on set. Welcome. Thank you. A nice rally day for you to be here, as well. You have to be generally pretty bullish on stocks. Do you worry at all about the economy . No, im bullish on stocks. The markets in very good shape. People forget very quickly, but if you look at last year the market was down, all three indexes was down. Thisiar year all three are up, if you look behind the curtains eight companies have been driving that success this year and were the drivers of the downside last year. Microsoft, netflix, tesla, and nvidia. So eight out of 3,000 stocks are controlling the nasdaq which is 3,000 companies. But my understanding has been if you peel that away and certainly if you look at the russell 2000 its negative on the year and the idea is smaller is where theres more Balance Sheet risk and maybe less, you know, market position that they can defend against just a variety of factors that make them structurally weaker right now. Do you think theres a different tore . Well, ive always loved the midcap arena. I like the midcap arena for a couple of dint reasons and number one they can survive an economic tsunami. Theyre big enough to have a smallcap arena thats accretive this them and also big enough to beaccretive to someone else and if you stay in the Hennessy Fund 1 to 10 billion market cap which is a great area to be either to be an acquirer or be acquired. Thats interesting. Well talk later about some of your favorite names. You like Caseys General and a couple of others in here along with caseys, dex and b. J. s and well leave that aside for the time being and youre one of the rare people in markets who has been through high inflation. People like to run the numbers and Say Something like 20 of Fund Managers have been alive during when inflation is as high as it is now or Something Like that. Just give me some perspective when we talk about the tenyear at 470 or when were concerned about high inflation and high rates. How do you find of sift through that based on the your experience . Well, youre too young to understand so ill give you a little history lesson, but back in the early 80s we saw Interest Rates of prime go to 21. 5 . Inflation was running at 18 . So if you had invested at 30year 6 bond you were just out of luck. You were just dead, and i remember as a young stockbroker going to talk to people, they wanted to talk to me, but they were eating god awful, as bad as it was dog and cat food because they couldnt keep up with inflation. Geez. In any way, so you look today, inflations running 3. 5 , inflation is somewhat stagnating a little bit. You have 7 interest rate, 7. 5 mortgage. My First Mortgage was 14. 5 or 15 . The difference was in those markets, in those times we gave up the washing machine. We gave up going out thursday, friday and saturday night. We saved our money and put a roof over the head for the family. In todays market, people get scared because you got used to or the Younger Generation got used to paying nothing to borrow. Yeah. Which it comes back to hit you in the end. And thats why, you know, do you think theres anything investors are missing about how the cycle could play out. In other words, when you are still pretty constructive on stocks and some of these are consumer facing and is that because we will ultimately navigate this period better than most would expect . Everyones been talking about a recession, but you dont have a recession if you dont have high unemployment. We cant even hire for the jobs that we have today. Plus, when you have low inflation and wage growth, thats good for the economy. Thats good for the consumer, so at the end of the day those two are working together and we just have to be patient. Theres a lot of things going on around the world and a lot of headlines, but if youre just talking economics, companies are in very, very good shape with their cash flow, with their profits and their expansion and capex. You name it. Theyre in really good shape. Well circle back, like i said with detail, and well leave it there for now. We appreciate it, neil, thanks 37 Neil Hennessy from Hennessy Funds. The house of representatives is in its 13th day without a speaker and it took 13 days to elect one and at least one republican is warning of a potential need for a Coalition Speaker with a deal with the democrats if the gop cant elect someone on their own. Emily watkins has the latest. Good afternoon, emily. Good afternoon, kelly. Yeah, there are some discussions about having some sort of coalition government, but before anything like that gets under way, jim jordan is up at bat and hes racking up support in his bid for speaker ahead of a plan to save the bill on the floor. There are some who say they would never back jordan and theyre coming out in support of him after jordan and his allies spent the weekend talking about individual holdouts. Members have called on the conference to come together and those members include mike rogers, chairman of the House Arms Services committee and tweeted he had two cordial, productive conversations over the last two days with jordan and as a result, rogers now supports him. Congresswoman ann wagner who was adamant said she couldnt back jordan on friday and said they spoke at length and he has e l a leyed her concerns of keeping the government open and both israel and ukraine are on the floor for the house of representatives and jordan sent them a letter this afternoon promising to bring the entire conference together. Republicans will meet this evening again behind closed doors and tomorrow at noon its supposed to be all out in the open and you will see what you saa in january and theyll see who does support jordan and who doesnt and basically how much of a climb jordan has left if he want tops get to that 217 to become speaker. A highstakes 24 hours. Emily, for now, thank you very much. We appreciate it. Emily wilkins reporting. We may not have a speaker yet and the shutdown may still be loom, but treasury secretary janet yellen thinks the u. S. Economy is in good shape. She told our wilbert frost that inflation has come down considerably and that we have, quote, we have about the strong of the labor market weve seen in 50 weyears with 3. 8 unemployment. Billionaire investor leon cooperman said stocks will struggle to break much higher and he said people arent taking the u. S. Fiscal situation seriously enough. I think people on your program are not spending enough time talking about our fiscal situation. Theyre all focused on inflation, but i think inflation is just one part of the issue. I think focusing on our fiscal deficit would make a lot of sense. Lets see if my next guest agrees. Joining me now is roger ragman and former governor of the reserve bank of india and tom honing, distinguished senior fellow and former president of the Kansas City Fed. Welcome to you both. Its delicious irony having you on together because if im not mistaken it was at the jackson hole, where you issued this warning that was quite prophetic at the time and im curious if you have any warnings to issue now or if you think were going to come through this just fine . Well, first, it was 2005. Wow its hard to, you know, its hard to get things right all of the time, so i dont have any sense that i would be prescient. I think its important to worry about a number of things all the time, and certainly were worrying about inflation and worried about risk in the Financial Sector and we seem to have calm them with the akds in mark, but they were pretty significant actions and we are effectively insured all uninsured demand deposit ands thats a huge action because you just mentioned the fiscal deficit which has gone from 4 to north of 7 in the course of one year which is a huge expansion for what one might think of as a normal year, as a peacetime year. You havent seen these big expansions in the last so many years except perhaps in 2009 and 2020 which were both extraordinary years. Im trying to think do i call you professor, vice chair, president . Rag is fine. And tom honing, as i turn to you, sir, i thought it was interesting as people were concerned about what happened in march that banks in some ways took the bait and took all of the treasurys that they were encouraged to do the way our system works and are left with these losses. So we starteded with concerns about the banks and six months later its the sustainability of the u. S. Fiscal condition that seems could be much more worrisome. I think thats right. Number one, on the securities that the Banking Industry hold, the fed set up a facility. Theyre taking securities and against them even though they will be well below the value numbers and so theyve alleviated that part of the crisis, but i think the real issue is the fed has decided wisely, i think, to end quantitative easing and begin to hold their Balance Sheet constant and reduce it. In that environment where you have the government issuing substantial amounts of new debt every month, we have a huge deficit over 1. 7 trillion probably growing and you dont have the Federal Reserve buying that debt any longer, that means the private sector or foreign interests have to buy all that debt and thats why i think you see Interest Rates along the yield curve pushing up the tenyear up and i think youll see more of that because this debt has to be financed and the fed isnt going to take it and the private sector will demand more of a return for the risk theyre taking as they go forward, and i think thats very important to keep in mind and that factor, i think is a warning sign for the future of the economy. Weve had a really good growth period, but now we have all this fiscal expansion coming to hopefully an end, and now the higher Interest Rates, i think theres a lot of pressure coming forward on the economy and on the fed because theyll be pressured to reverse their quantitative tightening if things start to slow very much. Rag, today we sit here and stocks are higher and earnings look decent and we think its the economy and thats why bond yields are moving higher. Do you think thats why theyre moving higher or do you think that has to do with the deficit picture . Well, i think it has to do first with what tom just said that the buyers are simply not there as they were before. The fed is out of the picture, foreign buyers and japan is slowly backing off from stopping and there is a concern of whos going to buy these longterm treasuries. Also, certainly the treasury has to issue a lot more paper to fund a much larger deficit than last year especially because techs intake hasnt been strong this year, and the second, i think most worrisome aspect is the treasury has issued longer term and who is going to buy this duration and thats partly why Interest Rates are moving up at the lower end. Last point, as the fed takes longer to quell this bout of inflation as it stays higher for longer and clearly longer term rates have to be yet longer to give people the reason to buy them, to give them the necessary premium. So all of this is pushing up rates in the long end and of course, well act to slow down the economy. Thats what the fed wants, but its not something the ordinary person likes. No. And tom, if i may, the ways to kind stop worrying about this would be if we thought the deficit was going to quickly close, that this was just someone off. If we thought bond yields would be back to historically low levels and maybe they will if a recession hits. Well, they will, perhaps, if a recession hits. The demand for credit will decline, number one. If a recession hits there is a likelihood that the fed will reengage in quantitative easing and not just lower rates and to buy more of these bonds that will be coming and that will bring it down. Now the problem with that, of course, is thats going to invite even higher inflation. So theyll lose their objective of getting inflation back to 2 and so thats the tradeoff that the central bank has to deal with, and i think its one thats theirs to encounter in the not too distant future and things do, in fact, slow as i suspect they will. Does that present, in a way, rag, that would be the best Case Scenario because they could meet their objective while bailing out in some way. If for some reason we cant see bond yields drop and yields continue to move higher the way they have the past couple of weeks, you have to wonder what other good options policymakers have. Yield curve control . Well, i think theyve been aggressive enough in these innovative monetary approaches. I think they should stick to the knitting and do the sensible thing. They will have to start cutting Interest Rates at some point. Of course, that assumes that at the same time inflation will fall. I think the key concern also Going Forward if, in fact, in a recession is we will be entering a recession with a huge fiscal deficit. Right. Recessions typically widen the deficit even more, so there is a longer term concern about debt sustainability. Its not a big issue for the u. S. Today, but it is something that we should start paying more attention to over time. . They worsened the deficit and raised the debt levels and that has lower revenues tom, at this years Kansas City Fed runs over all of the possible options to get out of this including inflation and you name it, and it couldnt come up for an answer. It wasnt just for the u. S. It was for a lot of advanced economies. Thats absolutely right. The most serious effort that should take place today is the Congress Needs to address this growing debt and deficit problem, because if they dont do that it puts more pressure on the central bank to print money and reinvite inflation or to suffer a very serious recession if the fed decides, no, were not going to inflate the economy. Were going to keep rates high and that means financing becomes more difficult for the private sector. So i think the real solution lies with congress. Weve got to take care of this debt and this deficit in the long run or we are all going to suffer a much slow growing economy in the years to come. Rag, what would you add to that. Effectively a spending cut or a tax hike, one of the biggest in history. So these are politically unpopular maneuvers and risky ones. He said it perfectly, but the only point, if i had to make one would be, you know, weve got a lot of spending also coming down the pipeline. All of these subsidies that are being given to manufacturing whether its the chip factories or the battery factories. We need to take that into account also as something that will add to the deaf set over the next few years. Yes, we have to Pay Attention to the deficit and we have to bring it into a normal situation sooner rather than later. Gentlemen, thank you both. Appreciate you laying it out today and im not sure there are any answers and just laying it out. Raghuram rajan and thomas hoenig. This after the sec has appeared to drop its fight against the spot bitcoin etf. Whats the next step for regulators and what does it all mean for investors . Well ask former cftc chair tim mosset. With higher rates hitting spending from every angle well kick things off with credit cards and will consumers keep footing the bill and if not, what are the markets most exposed areas. As we head to break, we are near session highs and the dow is up 349 and the 10year note a little bit off session highs around 4716. We are back after this. This is the exchange on cnbc. This is Spring Semester at fairfieldsuisun unified. They switched to google tools for education because theres never been a reported Ransomware Attack on a chromebook. Now theyre focused on learning knowing that their data is secure. nice footwork. Knoman, youre lucky,ta 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. Bitcoin jumping as much as 8 earlier today, crossing 30,000 as the path to a spot bitcoin etf looks clearer now. It is off the highs and we are just over 28k at the moment and bernstein writes that bitcoins growing legitimacy and strong Value Proposition now put it on par with gold as the safe haven trade, but illegitimate and criminal uses continue to plague crypto. The wall street journal saying that hamas, even as the Israeli Government punishes to freeze accounts. Former cftc chair and Harvard KennedySchool Research fellow timothy massad. Great to have you. Welcome. Thank you for having me. Bring me up to speed on whether you are thrilled, excited or horrified at the idea of having a spot bitcoin etf out there . Well, i guess it was coming. I had hoped, frankly, a couple of years ago that the sec would take advantage of the position it was in because it had approve the futures etfs, but had