Manufacturer three more names on board to report, including meta we have the story, the action, the trade into the print but we begin with dom chu with the numbers. Ty, todays bull run, at least todays bull run, trying to build on the last couple of days, is losing steam throughout the course of the late morning into the early afternoon session. The s p 500 is down one twaur quarter of 1 . So down 12, but at the highs earlier today, we were up roughly 19 points and down 23 at the lows of the session. So weve been kind of losing a little bit of steam throughout the course of the day. The dow down about 1 3 of 1 , 117 points to the downside 38,384 the nasdaq composite just about flat so outperforming so far, only down about ten points. Again, it was solidly higher earlier in the session the come poise it index at 15,686 some of the headliners today include some big upside movers on the travel and leisure side, hilton up about 4. 5 right now a good quarter for them, better than expected earnings and revenues they razed their guidance, so Hilton Worldwide up 4. 5 so another one to watch is the single best performer in the s p 500. Its all about fun and games hasbro shares up about 10 or so a beat for profits and revenues, so hasbro thanks in part to better inventory management, better digital game sales. This is the Parent Company of g. I. Joe, dungeons and dragons the second biggest stock in the s p 500, probably the bigger influence, tesla shares up about 10 right now. 159 and change per share. It missed results on profits and revenues, but a lot of optimism about the possibility of a more affordable vehicle model coming at the later part of this year or early 2025. Tesla shares a big focus here. Back over to you dom, thank you very much. Sit a big week for the economy, with pce on friday, the gdp tomorrow, and critical to that gdp report will be a number that isnt even part of that report, its the productivity number that has ignited a debate about whether or not the data signal a boom or a blip and Steve Liesman has the latest on that. A debate with the fed and economists youve got to love to see the fur fly. Well, there are members of each side within each group, right . You have the fed folks who are optimists and pessimists and some economists, as well the growth in productivity is the biggest part in how the economy grows, and whether were seeing a post pandemic noise in the data, or is it a real boom heres the data for the five years before the pandemic. Productivity grew at a trend like 4. 4 . Through the First Quarter of last year, it dropped to 1. 3, followed by a really worrying decline. But its come back the past three quarters have seen an off the chart number average of 3. 7 chicago fed president Austan Goolsbee laid out how critical it is for the fed to get this right. Thats fundamentally going to change everything about the economy, in a way. And it would have direct implications for Monetary Policy it would put us back in an environment that would very much be like the late 90s, where you could have faster wage Growth Without inflation, you could have faster gdp growth but there are skeptics who say this is post pandemic noise in the data. That you have work from home, but the hours are mismeasured, and its too soon to tell, because productivity is best measured over scales like five or ten years the optimists say work from home could be a source of greater efficiency with better matching productive employees with Jobs Companies learning to do more with less from the pandemic, and higher growth and inflation, forcing them to higher productivity measures. Jay powell has been in the camp of skeptical, but on squawkbox this morning, Jason Fuhrman summed up the middle ground. What were seeing in the data is just noise and post pandemic gyration what were seeing when we read about whats happening in ai, the developments and companies, and the developments of the technology, i think thats real, just not in the data yet for the fed, it means higher productivity could mean lower for longer its like adding factories and workers without adding either. Getting there could mean more for capital, so shortterm that could mean higher rates until the productivity takes hold. I love when economists talk about gyrations. It gets me going let me ask you, just from a dumb point of view, what is productivity, how do you measure it, and what influences it or changes it for better or worse its efficiency output hour for hour in a Service Sector economy, its very difficult to measure i dont know how you would measure my productivity. Say you were a journalist oh, i think thats a real example. Lets say you used to write stories a week, and then somebody gave you a computer remember, you probably used to use the carbon painer . Oh, yeah. Say you increased that to ten stories a week lets say there was no change in accuracy, which is a measure of your output and you got paid the same number of that. That would be an increase in productivity so there are more stories there for the same amount of inputs, while of course you have to measure the capital input, as well is improved productivity largely driven by Technological Advancement like better computers, like ai, like using data i would like to answer that question yes, but its not 100 True Technology is a big part of it but business process is another part of it say you figure out a way to gather information, or say you find a better source for your story that add has the information more quickly thats not technology, thats business process and then theres another thing its called tfp, or total factor productivity, okay get ready for this this is what economists call man manna from heaven. Say you measured all the capital and labor you put in and you still have more productivity on top of that, its the added value, tfp thats the good stuff. Thats the stuff were really looking for, where its not just dollar for dollar, increase in productivity its not just throwing more capital or people, it is added value productivity that happens from changes that have been made. Now, thats the thing the economists really look for its also the hardest thing to measure, because its really youve got to account for all the other inputs into it its whats left over after you think you have accounted for everything look, tyler, we grow 1. 5 productivity a year. Thats normal base rate. The debate were having now, has that number ratcheted up its almost certainly not 3. 7. That would be crazy. Say you have a printer, and that printer puts out 100 pages a minute and then you get the next generation printer goes 101. 5 pages a pinminute, thats norma productivity but the next printer puts out 150 pages. Thats a kwantive step in productivity growth. Steve, thank you very much. Now fiveyear notes, they are up for auction and Rick Santelli has the action. Rick yes, tyler. And im talking at the intraday chart of 5s. Were starting to see rates creep up a bit the auction, the grade for demand is straight up 1 00 eastern by investors, my grade was a c. Straight average across the board. Lets go through it. 70 billion, record offering of fiveyear notes by the u. S. Treasury came in at a yield of 4. 659, about a half a basis point above the one issued market. Higher yield, lower price, and the seller on the government side but that really accounted for some of the mark but all the other metrics pretty much were on top of ten auction average. Some were a little below, some a little above the one that struck out a little above was the direct fitters at 19. 2 , but straight across the board average. If we look at the longer term chart, we could see that over the last couple of weeks, Interest Rates have ramped up for new high yield closes for the year going back to november. That is an issue that we need to pay close attention to, and break it down versus supply issues, debt servicing issues, and some of the data like were going to receive friday and how it affects the fed, which affects the market tomorrow will be the last of the supply, with sevenyear notes. Of course, theyre not going to be the record demand excuse me, the record supply weve had in 2s and 5s tomorrows 44 billion is not the largest sevenyear, but the package of 2s, 5s, 7s is a record tyler, back to you rick, thank you very much 28 of the s p 500 companies have reported earnings so far. 79 have beat the estimates by an average of 9. 4 thats good news for the companies, and for my next guests market thesis. He says earnings are the key catalyst that will keep the bull market going hes a chief Market Strategist at Raymond James matt, welcome. Good to have you with us great to be back, tyler good to see you. Yes, you the same lets talk a little about earnings and whats coming up. I guess we have meta, a bunch of other ones later on. Anything that youre particularly going to be paying attention to or keying off of . Tyler, what you said to start this is the key. Earnings growth overall for the market, thats going to be the key arbiter of whether this bull market continues or not. So far, earnings are coming in very, very nicely. Eps is ahead of expectations, revenues are ahead of expectations so thats all positive obviously, from a sentiment perspective, what we hear from the mega caps coming up, we have meta, microsoft, alphabet this week, you have a host of the rest of the mega caps next week. That i think is going to be very important in the short term. But overall, i think what were seeing is that theres a broad number of Companies Across sectors and industries that are reporting good numbers, and to me, that supports this idea that we are seeing a broadening out of the market. Were seeing a rotation underneath the surface so whether or not the market is down because yields are moving higher, you have to be looking longterm. To me, i would be using down size opportunistically, because the fundamentals are in place, and theres good opportunities across sectors and industries right now. A lot of the folks that we have on our air here, like you, these days are talking about small caps a lot of people have been talking about small caps for a long time. So i guess im kind of from missouri, show me. Show me the money here when is that going to happen, or is it happening . Yeah, i think i feel like small caps are trending into the International Trade for the past decade maybe theyre going to outperform and were still waiting to a large degree. I think small caps are not a monolith when you look at the russell 2,000, thats not an index i would recommend any client own on its own, because theres so Many Companies that dont make money. A key part of my market thesis, tyler, is you have to own quality going forward, companies that have a path to earnings or have Free Cash Flow. Thats all really important. When you look beneath the surface at small caps, theres a number of High Quality Companies that dont have significant leverage, that have strong Balance Sheets and can expand and are leaned into a lot of the trends, like increasing cap x, bringing reshoring back to the u. S. , the Artificial Intelligence revolution, being powered p ed by data centers that will move small caps, and if we can start to get an inflexion point with respect to earnings for small caps, thats what gets the market moving, because its so underowned by investors right now. I think once you get a little bit of momentum, the flows will beget the flows and youll see some strong upside let me make sure i heard you correctly. Did you say to not go with the russell 2,000 because too many of its constituents dont make money and rather go with smallcap companies, maybe individual choices, where the profit picture is better, the Balance Sheets are better, the debt is lower, did i understand . Thats exactly right, or go with an active manager actively picking stocks so you can lean into growth and value. But owning the index overall, you have 2,000 companies with questionable quality you like small caps and cyclicals, including energy, nextera, et cetera explain. Thats right, tyler cyclicals right now have the opportunity to keep outperforming, and its a hedge in many ways against inflation right now. So you look at the industrial complex, which is where vertiv fits it crushed earnings this morning. They provide cooling systems and Power Management to data centers, which we know we need to invest in a lot more of them going forward. So theyre a high quality company. Theyre generating more Free Cash Flow, Balance Sheet leverage is coming down, so it ticks a lot of my boxes. When you look at nextera, they pay dividend dividend growers have been underappreciated by the market overall for the better part of a year or so when yields do come down, investors are going to see dividend growth, but nextera is the largest renewable provider of solar and wind in the world they provided good earnings yesterday, and their backlog is increasing so it hits the Higher Quality beat, plus you get the dividend component. And energy has been a great trade. Energy hedges some of the inflation in geopolitical risks that were facing right now. So what i tell clients is, its tough given the gains and some of the energy names to pick one single stock but oilservices have been left behind relative to refiners and some of the exploration and productive names, tyler. So what i would say, buy the lah, because youll get broad exposure to the servicers. We need to extract more oil from the ground with less cap x and using less Balance Sheet this is a name that ticks those boxes. Matt, thank you very much see you again soon great to see you. Thank you very much lets turn to housing right now. New data show just how sensitive buyers are to any movement in rates. Diana olick has that story rates rose for the Third Straight week last week. The average on the 30year fixed increased to 7. 24 , with loans 20 down as a result, applications to refinance a home loan, which are most sensitive to weekly moves and Interest Rates, fell 6 for the week they were 3 higher than a year ago. Applications for a mortgage to buy a home fell 1 for the week and 15 lower than the same week a year ago, as home prices rise, along with Interest Rates, potential buyers purchasing power are suffering a double whammy as off what happens, the adjustable rate of Mortgage Applications rose to 7. 6 . Arms can be fixed up to ten years, although theyre riskier loans. These numbers were for last week lets look at whats going on today. Rates dropped a little bit to start this week according to mortgage news daily, but made a tiny tick higher to 7. 39 . The next potential big move would be on the Monthly Employment report at the end of next week, tyler diana, thank you very much. The senate, as you probably know, has passed a bill that potentially could ban tiktok in the u. S. Well look at whats next, what this means for u. S. Users, and what will happen to tiktoks algorithm. Shares of boeing down 32 since that door plug blowout in january. Todays report and words from the outgoing ceo, did it shed any light on a turn around in the companys culture, Quality Control and its investment potential . Harbicorp surging on talks of an ibm takeover up another 9 . The exchange is back after the exchange is back after this voya there are some things that work better together. Like your Workplace Benefits and retirement savings. Voya helps you choose the right amounts without over or under investing. Across all your benefits and savings options. So you can feel confident in your financial choices. They really know how to put two and two together. Voya, well planned, well invested, well protected. Youve got xfinity wifi at home. V take it on the go with Xfinity Mobile. Customers now get exclusive access to wifi speed up to a gig in millions of locations. Plus, buy one unlimited line and get one free. Thats like getting two unlimited lines for twenty dollars a month each for a year. So, ditch the other guys and switch today. Buy one line of unlimited, get one free for a year with Xfinity Mobile plus, save even more and get an eligible 5g phone on us visit xfinitymobile. Com today. Welcome back to the exchange. Boeing posting a smaller than expected loss per share and Free Cash Flow burn, but sentiment still shaky as investors and travelers look for clarity on production and Quality Control following that door plug blowout in january and other issues. Heres what the outgoing Ceo Dave Calhoun said this morning the review is going well, in the sense that were both approaching it businesslike we all want the same thing we want a factory under control. We want to set a metrics that demonstrate its under control month to month to month to month. And then we want compliance on the floor. Are your tools in the right place . Are theinstructions set up the way theyre supposed to be we want that to be as perfect as it can be. Easily measurable, ande eat the end of 90 days, youll have to demonstrate performance every step of the way. But as negative headlines continue, it is unclear if bowing is yet out of the woods lets bring in two experts to shed light joining us now is oscar munoz, former United Airlines ceo, and jeff gazetti, a former ntsb investigator gentlemen, thank you very much for being with us. Jeff, let me start with you. How do you grade boeing so far in terms of transparency, clarity, and action in correcting the production issu