Makes the company so far resilient to higher rates. Dom chu has the numbers. To your point, kelly, if you look at the s p 500, thats down roughly 54 to 5, does represent session lows at this point even at the highs of the day, only down about three points so it has been negative. Specifically in tech and communication, thats been driving the down side. 245 points on the down side. For those listening on sirius xm, its 4133 at those leaves do you 2 , 12,555 for the nasdaq each of these major indices is below the longer trend 200day moving average. Another place to keep a close eye on, look at the semiconductor etf again, the chip makers is below the 200day moving average, so something to keep an eye on as well for some of the stocks driving the action, of course, earnings from alphabet, even microsoft sharply up day yet is down about 3. 5 today. And meta platforms, weaker on the heels, and all eyes on amazon this afternoon, given what we have seen, with earns that could be something to warrick at well if this isnt something weird, so much weve been talking about, the notion that bonds and stocks have been selling off at the same time, the death of the 60 40 portfolio, on a day weve hit the session low, we have hit session highs in the bond market, treasuries specifically. It almost seems fundamental that people would be taking risk out of the stock market and buying Treasury Bonds on the heels of it it hasnt been happening recently that could be something to watch. Even as it ticks down again. Lets get to the strong Third Quarter number thats the stronge pace since 2021, the Third Quarter. We also learned that bigticket items surged job his claims remain near historic lows. Joining me is blerina from rowe price is with us. And steve is also with us. You can look at this report and see some stuff that might create weakness in the current quarter, the fourth quarter. Inventories were a big contribution to the final number thats probable going to come off a little bit this quarter. Spending was another part of it. Then you have to step back and say, okay, for a year or two, weve been misforecasting, badly forecasting the consumer and getting it wrong and wrong and wrong. The question becomes now, will the consumer finally, given the headwinds, give it up . I guess i have my doubts the economists have been wrong for a very long time we really dont know what the level of savings is. I remember thinking, kelly, a year ago people were on this show saying consumers have no more savings they sure seem to be spending. I think you have some Interest Income accruing, finally real wage gains out there i see it stepping down, but i dont see it going to zero, and i think it can handle some of the he headwinds. Lorelorena, i feel like you l agree. What that does mean for the fed here by the way, i think what is supporting the consumer is the labor market aggregate incomes are strong and also improving then it seems almost contradictory that the fed would lean against its Forward Guidance and hike one more time this year. I think this has a lot to do with what is happening in treasury yields, especially in the long end of the curve. Were seeing yields increase, even though the probability of hikes has declined i think for the fed, there seems to be some equivalent, where maybe the markets and the Financial Condition tightening could be doing the job for them, so it does not necessitate another hike so, what happens then as weve seen, if yields dont come down, do you think the fed would react by tightening . I think its very key that the increasing yields we have seen so far is sustainable i think this is the key. We dont necessarily the fed doesnt necessarily need to see further yield increases from here, but any pullback in yields, a meaningful that brings us back to august levels i think would be an indication they need to deliver that extra hike if the economy remains as resilient as we have seen. At this point, i have no reason, looking at the data, to believe that the labor market is going to crack any time soon. Steve, what were you going to say to that . Nominal yields on the ten are 5 i dont think that continues growth is 5 knoll nominal yields are 5 . That means nominal growth is a bit higher, then, maybe 8 its not to be in a world of higher rates i think the fed may step back and say its not entirely clear its unwarranted so, i think things do step down here, but its not a crazy place to be right now with 5 yields on this. Blerina i think another element we having discussed is the lags of tightening and higher yields playing out in the real economic the key is the duration extension both for households and for firms. A large portion of u. S. Households and firms locked in lower Interest Rates before the fed started hiking that means, of course, the increases in rates that we have seen so far, which are substantial are going to bite, but this is going to happen with a longer life. I think the fed here is a risk manager, and what theyre trying to do is, saying, okay, well give the economy some more time for this long lag to play out, but were not precluding the possibility that, if this resilience continues in 2024, they can deliver higherlower cu resume hiking. Steve, i wonder if this discussion is too backwardslooking and relying to which on the data strength from the past two quarters. The forwardlooking momentum here, it just doesnt seem week as encouraging yeah, i think people are really reluctant to buy into a positive story, given the headwinds and the kind of reflection, which is backwardlooking forecasting that people do, but it certainly seems like, if you look back at the forecast, its been wrong for a long time, kelly i dont know when that if you give it up and suddenly youre, like, okay, suddenly im optimistic if thats the last straw, but i think the earnings numbers have kind of held in there, given certainly the surge in prices, and like blerina said, you have the wage gauge. I believe households are net lenders to the economy, they are not net borrowers. I was looking here thats really interesting. Let me get my glasses on. I apologize here, but i have august personal Interest Income is up 140 billion, at an annual rate compared to the yearago period im just wonder, maybe all the seniors collecting the coupons now are booking those cruises, and maybe you cant get a room on the cruise right now . Also thinking about the irony its u. S. Households receiving the largess from the government that seem to be threatened the whole Balance Sheet story here is key. We spent a decade deleveraging to steves point, net assets of households, relative to their liabilities are at historical highs. The Balance Sheet looks healthy. We have a demographic effect where baby boomers have a ton of savings, and they dont have to pay mortgages at 8 Interest Rates, and were seeing that show up in resilience in both goods spending, as well as services both components have been stronger than most people expected for this year steve just real quick, i wonder, kelly, rather than spending time to figure out why things will be bad, maybe we should be spending time figuring out why things havent been as bad as we thought they would be. I think it discussion was unpacking a lot of that. Agreed. Well leave it there for now. Thank you both lets turn to markets some stock sector etfs can help investors avoid singlestock blowups. Mark, good to see you again. What kind of mood are you in these days well, cautious at best. Days like today dont help much. Youre seeing what the market is doing. Reports really arent that bad. Were find ago wrinkle or two of what we dont like about them, and then trashing some of the americas best companies thats a bit of an overreaction, but that could be a turning point. I just dont think it will be an easy ride to get there. Everyone set, you know, the react is so undeserved im not sure it is look at microsoft, right numbers helped by enovation and their shares were up on a pretty ugly today take google to the woodshed, i dont care, they need to keep up. You make a good point googles earns, the ad revenue, there was nothing wrong with that it was the growth rate in cloud. Thats my point, people are looking for problems where they may or may not exist i think the valuations got written up a bit too high. Youre pointing out microsoft. They 345i be the cream of the crop here in that space, but were going to look to see amazons numbers you have to lit really look at beets, but youre going the opposite way no, buy the sector if youre not exactly sure where each blowup will be. In tech, its okay. Ill tell you why. Who was on your air in the past 48 hours saying microsoft would have a great earnings number and bounce up in alphabet, which was going to have questionable earnings and a big drop down its almost impossible to time these quarterlyearnings reports. For the average investor to try to do that is extremely difficult. For insiders, its also very difficult. In a turbulent market, and this feels more like a bear market, i would rather by broadly diversified. In a bull market, we all look like heroes when we pick the winners. In a bear market, i have to be more defensive, protect client capital, and then strike hard when theres the all clear. I also just wanting to explain why financials here, where if youre feeling bearish, i get the valuation case, but are we so sure theyre cheap enough well, i really think it depends on what financial youre looking for, and the xlf, actually, large, highquality best of the best Berkshire Hathaway is actually in there. Jpmorgan, visa, mastercard nonbanks. You cant avoid financials, so we look for quality, broad diversification. You want to stay out of the community and regional banks, that will struggle thats why we migrate to the largecap etf sector. Last word, you would steer them toward Investment Grade with a yield of 6 or higher why . If you can take the volatility out of a port follow again, it depends on the investor but you could consider treasuries, but across the board, investmentgrade corporates with a low risk of default and intermediate duration can round out these wild swings. Interestingly enough, after the fed rate hike, the threeyear average return is only a percentage point or two behind the average return so you can get capital gains, plus a 6 interest rate, plus or minus, i think most investors would be well served to consider that in that area. Mark avalon, thank you for your time today. Good to be here coming up, our tripleheader executive Exchange First up, the ceo of Raymond James joins us to recap the quarter and give us his read on the health of the banks. Eqt surprising the street with a profit in q3. Ceo toby wright weighs in on that and entire state realty trusts ceo has a pulse check. Were looking forward to that. The s p is down 1 right now. The nasdaq the worst performer the tenyear yield drifting back up were back after this. Businesses need 5g solutions today. Thats why they choose tmobile for business. Mlb partners with tmobile to not only enhance the fan experience, but to advance how the game is played. Aaa relies on tmobiles network to stay connected nationwide, so they can help get their members back on the road. And were helping pano ai innovate, to stop the spread of wildfires. Nows the time to see what americas largest 5g network can do for your business. The power goes out and we still have wifi nows the time to see what americas largest 5g network to do our homework. And thats a good thing . Great in my book who are you . No power . No problem. Introducing stormready wifi. Now you can stay reliably connected through Power Outages with unlimited cellular data and up to 4 hours of battery backup to keep you online. Only from xfinity. Home of the xfinity 10g network. Raymond james reported record revenue, driven by higher Interest Rates for more, lets bring in Raymond James ceo. Great to see you, kelly we were driven by or Wealth Management businesses and the divert fitted businesses this is the third Consecutive Year in our year just ended so, its really a testament for the model, the longterm view that the firm has always keeping flexible. We have double the amount of capital to be well capitalized, a lot of liquidity we even look at these times that like ad ahead to be more challenging, looking at always opportunity opportunities ed models produce those results. We spoke with stifel yesterday, which also had a nice quarter. Well, you know, i think the recruiting success on the platforms is weve had just steady across our independent employee and our platforms for strong recruiting. Weve had it send of forever its or growth store story most importantly is, since even here and well before me. Having a model where advisers are free to leave. But they choose to stay, because they feel we have a high support environment, that we put clients first, and our investment and technology that we believe on the wealth platform for advisers, we have the leading technology as advisers, come and kick the tires, they tell us that from the other firms. We know its been a tough period there lately theres probably a lot of Different Levels you can pull that maybe youve been through, but maybe your more Junior Team Members have never been through that. If youve been around long enough, youve got through these cycles this is typical some conditions start to change. Sellers usually are much slower to react he see that in the markets even for us, as we look at opportunities when we can lock in debt at low single digits, and its up significantly if we want to finance something, it changes the return on investment until prices adjustment a little bit, if this is the reality in the miss term to longer term, which arent record rates, but people have been used to free capital for a while there. Once people settle in on both sides then youll see activity pick up. The question is when, and thats what we cant answer everybody talks about groan shoots, and we did some he see in increased activity. Theres some activity, but certainly not the levels we would expect what would you see when youre thinking through how to be nimble and opportunistic, looking at the period, know there will be some opportunities as you hinted at before, just walk us through what that means across the rank and file and what that could look like. I think to think long term. During the mini banks crisis in march last year, a lot of people said rates arent going to up, and they locked in in panic. That put them in a precarious position well make money in either environment. So keeping flexible, thinking long term, well, just ride it out. Economic reality comes back. Think thats why through all these cycling, this year we had over 22 return on a nontangible equity, and even in 09, our worth year, we have a 7. 9 r. O. E. , and taking that longterm view, the opportunities come back. You tell people weve been through tough times before the markets will come back thanks in there, just see if you can help them, and theyll remember that. Real quickly, then, would you be looking at any acquisition in a time when weve seen a flurry of activity . Were always open for that. They have to be a cultural fit strategy ecly they have to mac sense. We have to integrate them. We believe they were to be part of the Raymond James family. And then they have to be at the right price. I think there are more opportunities. Im not sure the price adjustments are all there from our side, but sure, were always ready. We have the capital. Its just all those factors have to line up. Its interesting, you think theyre not cheap enough yet, if im reading between the lines. Yeah, i think if you look at where Interest Rates are happening, youll have a midterm squeeze on margins who knows when the fed is done it just values that cash asset differently on, you know, somebodys Balance Sheet, just like its had an impact on financial stocks if you believe thats here to say, thats the value. Honestly, when rates were zero, our industry overearned, and when rates go up, you have to say, okay, long term, whats a reasonable thread, and whats the value to us long term . You have to wait until all those factors align, theyre a good fit, and we can offer strategic advantages to our technology. Well be watching and waiting, in the meantime, paul, its great to have you here, especially on a day when the market is stretch like this. Thank you for your time. Thank you, kelly. Paul reilly, ceo of Raymond James. As we head to break, take a look at the sectors, as real estate is the top sector of ohm three in the green today its up 2 consumer discretionary, Tech Communications services all remain laggard the chip makers meta and our parent company, comcast, are each weighing on those group the exchange is back, after this when the day that lies ahead of me seems impossible to face a lovely day lovely day lovely day lovely day a bank that knows your business grows your business. Bmo. That first time you take a step back. I made that. With your very own online store. I sold that. And you can manage it all in one place. I built this. And it was easy, with a partner that puts you first. Godaddy. 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It would have created a company that rivals samsung, the leader in the slash memory space. Invisalign is hav