Threequarters of a percent. The nasdaq moving above, 1 higher now. Were going to kick things off with our chart of the day, the ten year. The yield ripping higher again right now. Take a look. It hit above 4. 65 earlier in the session, at its highest level in 16 years, right now at 4. 6. Really thats where we have to start this conversation, shannon. Higher yields but yet were seeing a bigger rally in the markets. How is that even possible . I think weve already been under pressure the last week or so. Not to say that pressure has eased, because if you think about what were facing right now, were facing Higher Oil Prices, higher yields, potential shutdown. Keep going. Student loan repayments are back. Were in september, which is just a tough time in the marketplace, and so this continued pressure, i think, what you see in todays marketplace, youre looking at investors saying, okay, weve experienced some of this pain, we have had a pullback in august and september. The Third Quarter is not going to look as strong. But we still are looking at, you know, over the next three months or so what typically occurs after a tough september. And if you look at the numbers, you know, the last three years, weve had a stronger Fourth Quarter after a weak september. There is some historical precedent, i think, for some of the optimism or enthusiasm youre seeing in a few names today. Our view is that coming into this year end period, the confluence of all of these stressors coming at a time when seasonal weakness is already in the market and expected, thats why youre seeing this continued pressure. I think were going to continue to see some oscillation here, some rotation, and, you know, at the end of the day, i think investors are still trying to figure out what is the right price, what is the right valuation at which i should be investing for 2024 the nasdaq at 1. 1 higher, the highest of the day, but the russell neck and neck with it, up over 1 . Generally small caps are more Interest Rate sensitive hitting 16year highs. Make sense of it. Well, i think small cap has really not participated at all in the rally weve seen this year, and its incredibly cheap. If youre looking for something thats inexpensive relative to other parts of the market, small cap is it. You can say its cheap for a reason, the companies do have to raise capital, whether its through secondary offering or through a bond offering or what have you, so there is some risk there. You could also argue its priced in. So we could be seeing some of that. If we look at how the Fourth Quarter rally might play out, i could see some areas like small cap really starting to act better especially if we see more trends within capital mark, more ipos coming to market, more m a activity, that should create a little bit of a valuation floor for some of those industries particularly if we see some that have action with the small cap. Bryn, one of the things shannon was talking about, all this wall of worry type of thing, oil back above 90 bucks a barrel. Down now threequarters of a percent, but still 3 above 90 a barrel. What do you make of the action were seeing in the market today, the nasdaq up over a percent higher despite the higher yields . Markets are really oversold, first of all, so looking at rsi, looking at all of the stats, the market is oversold. If you look at spy, the 200day moving average is at 4. 20. Were close to that. Youve had a really decent selloff. I think ultimately, though, when youre thinking about position over the next three, six months, i believe that we are now in a structurally different rate environment than weve been in the past 40 years, and so i still dont think that that has made its way through the economy and potentially multiples because we are a country of credit, whether you look at fiscal, corporations, look at individuals. I think the only reason that the economy continues to remain strong is the insane amount of fiscal stimulus we continue to have. But ultimately i do think the atlanta fed gdp number is at 4. 9. I think thats too high and will continue to come down. Anytime you have to transact in the market, whether youre an individual buying a car, no one is buying houses no one is buying existing houses or youre a company having to go to the debt market. The cost of capital is exponentially okay, exponentially higher than the past 13 years. And so i do think rates matter. And i think short term the market is really oversold. You could see a pop here and some opportunity. I think long term well continue to struggle with this new paradigm and this new regime of rates, which i do not think will go back to the way we were the last ten years. All right, steve, agree . Disagree . Will the market continue to struggle with this new paradigm . Yeah, i think it will. What were seeing today is a blip because you actually saw tenyear yields that were up coming down. So the algo traders, they are in there. Lets buy it because, as bryn points out, on a technical look, shortterm technical look, perhaps it is oversold. That, again, is just a blip. Here is a story. The story is and its a really simple story were at a peak in rates now, and they may go higher. And thats not going to drive m a activity. It will continue to put a lid on m a activity because its much more expensive to make an acquisition when youre putting debt in there. I think thats out the window. Just overall weve had a delayed reaction. You know what its like its like theres a kid and theres a dish of cookies, and them eat the first cookie and, you know, then they eat the second cookie, and the parent says, dont eat anymore. Youre going to get a stomach ache. The third cookie, i dont have a stomach ache. Eat four or five, and then the stomach starts to gurgle on the way home. Pundits said market rates arent going to go higher, theyre wrong. Theyve been deluded by the fact we have so much pentup cash, consumers and corporations, at such great Balance Sheets through the pandemic. The pandemic fire hose of demand coming in. Thats gone. The cash is gone. So now what happens, you have that stomach ache, okay, and, guess what, its reality. Higher rates do hurt. They hurt markets. They hurt deals. They hurt valuations, and thats just beginning to play out. So i wouldnt call myself bearish on the market. Ive been reducing exposure. Im very cautious. That remains to be the case and, to me, its a simple story. I think, everybody, the consensus are the rates are certainly impacting the markets. So the question now is whats really driving yields higher. The ten year hitting a 16year high. A high from 2011, so who else to answer this question, senior economics reporter, steve liesman. Steve, whats the answer . Reporter well, its been a rough couple of days and months, frank, in the bond market. You have rising bond yields, falling prices. Obviously all of that pummeling investors, especially those on the long end. Analysts think this run in higher rates has further to go here. Since early july ive looked at whats happened. You have to hang around a long time to see a move like that, the highest since 2007 on the ten year. And at this level, talking about a 5 yield on the ten year, thats not crazy talk. Rate strategist of bank of america, says the ten year could head upwards and sat 5 , you have the hawkish fed and higher rates. When the fed took away those cuts at the meeting last week, next year, by extension it also extended quantitative tightening. The better economic fundamentals and lots more supply than anticipated by the market. The market was really surprised. It is supply that looks to be driving rates, most of all. In fact, much of the increase in yields has come with little or no reprising of Inflation Expectations or even that much better economic data. They say get used to. Higher structural deficits and neutral rate means the bond market is more like it was before the 08 financial market. Higher yields, normal to be up near 4. 5 or 5, but volatility, the challenge to the bond market from the bond market to the stock market, could be here to stay and, frank, i really like the long and variable gastro invest nal lags that steve weiss was talking about from cookies. A new indicator, steve. I do have a question for you. Were hearing pundits say, hey, were seeing a steepening yield curve. And this is really positive for markets. How can they have it both ways . They say ignore the yield curve. The yield curves dont matter. Now they say, okay, they do matter. So whats your view on that . Is a steepening yield curve enough to support the heequity markets . Reporter i dont think so. It could be good for things like banks and good in a more normal world depending on how we get there, steve, where shortterm money is more expensive. Banks can borrow short, be lend long. A better structure for the economy than the inverted yield curve. We have made progress and people in the steepening curve, you may know a few, have made a few bucks, maybe for the wrong reason. Reasons they werent anticipating, but up over 100 basis points and now were down near, i dont know, 50 or 60. I havent looked at it yet. Steve, good to know that cookie metaphor landed with everybody. Shannon has a question. I dont know if she has a cookie metaphor. Long and variable. There are a bunch more where those came from. I want to point that out. Steve, one of the things i think has been a constant mantra is this expectation fiscal spending will decline next year, and so weve been talking about that being a risk to growth, but also a twosided risk to that. If fiscal austerity doesnt emanate in an election year, how do you think about that supply pressure over the course of 24 and 25 given that we probably arent going to see kind of meaningful austerity coming out in a political cycle next year . I think its a great question. Ill tell you what ive heard on this issue, which is, first of all, the treasury should not be in the business of surprising the market. It wasnt so much the issuance, although it is now, that the amount of issuance, the market was completely unprepared for it in august. They were thinking over time this fiscal stimulus comes down, the total issuance would be coming down, and it hasnt. And so until the treasury steps forward and gets in front of the bond market, gets the bond market to trust it again and its outlook and projections, then i think you can get a little more stability in the market. I do think there will be some negative gdp impacts from i wouldnt call it fiscal austerity. I would say less fiscal spending next year compared to this year and the last year, and hopefully thats replaced by a more normal economy than weve had recently. So it could take a couple tenths of a point off gdp, but i dont expect it to be determinative of economic outcomes. I want to bounce some research off you. Higher yields. I want to read part of this. Whats more likely to happen is the ten year moves to 5 or higher. The technical roundtrip to 2007 highs. And then it could bring all treasury yields to the same level presumably around 5 , which makes the yield curve shape entirely flat. You were talking about steepening. Hes seeing it going flat, and that signals high uncertainty in the economy. Agree or disagree . So, i think thats a potential outcome. I think more likely look, youd have to talk to folks out there, and even around your table, frank, but i think theres a lot of folks that are ready to pounce on these longer term yields. You dont want to get burned by it just as surely as you dont want to miss it, right . 5 has not been around for a while. Theres people who want to jump into that 5 , but they have to feel somewhat secure that theyre not going to lose their shirt. I think 5 might be a signal for some of those people who want to come in on that long end to come in, perhaps borrow short especially if you get more stability from a sense of what the fed is going to do. Imagine a world where its pretty clear the fed is on hold. You might feel confident borrowing short to buy on the long end, and that could have a positive effect on real yields on the long end. I think 5 might be the place that could be a top concern to think about, and i think the conversation in the stock market is, how much are my stocks worth . What is the right valuation for those stocks in a 4. 5 to 5 longterm tenyear yield . Because i dont believe were going back to the kansas of 1 tenyear yields. Thank you very much. Bryn, i want to come over to you. What is your take . The conversation we just had and what steve is taking is really driving that move to the upside . Well, i dont even think im looking at the ten year, threemonth treasury right now, and so you still have 100 basis points of inversion there. So were not even close to being able to borrow short and lend long, by the way, because you have a massive inversion. Ill also say that the yield curve and im not in this recession camp. Im data driven, just looking at history. You also had really multiple times since the 80s, the yield curve actually steepening right before you went into a recession. So i just think the tea leaves are too murky or the tea is too murky to say whats going to happen because of whats happening with the yield curve. I just think pragmatically and, you know, steve and i agree on this, pragmatically, higher for longer absolutely will embed itself into an economy thats been juiced up on zero percent rates for 13 years, and i do think the m a out of private equity, we do a lot of business on the private side. The cost of capital is very, very expensive and that absolutely hurts multiples from a vc side as well as going through the ipos. And so i still think its more of a defensive market where you just want to have some hedges on. Whats interesting to me, frank, im really surprised theres so much leverage on the long part of the bond. Im really surprised we havent seen, and maybe it happened too quickly, a risk parity trade, a hedge fund blowup, because they got on the wrong side of the yield move. To me a decent probability of happening because of so much leverage on the long end. Okay. So well continue to watch and will keep the rate discussion going. A big focus at the delivering alpha conference thats under way right now here in new york. Weve heard he from a bunch of big power hitters. Our own leslie picker is there following the money for us and joins us now live. Leslie, over to you. Youre right. I think the word rates has made its way into every panel, the interplay between rates and equities and pretty highprofile investors are skeptical of equities as a result. Cpps chief Investment Officer ed cast says the real rates persistently high will cause equities to underperform. Were in this amazing period from 2008 to 2020 where the best portfolio was equity centric, just be long equity. I think it was really an exceptional period for equity where you had low discount rates and that led to high growth through increased margins. If you think rates have to be higher persistently because of some of these inflationary forces, and thats the opposite. Growth is probably Slower Growth than earnings plus the discount rate is higher, and that doesnt seem, to me, to live a very equity friendly market. Reporter tcws katie koch had a similar thought as well on equities. Its like 85 of returns are being driven by the seven companies, so we have very consolidated leadership. We have valuations above historical averages, and we have a backdrop thats weakening. And i think on a relative basis just the possibility and well come on that later equity returns higher up in the capital structure. I would say were not as excited for equity markets for that reason. Reporter koch says, quote, getting paid to be patient. Cash has a good return. Her firm is defensively positioned with a philosophy around owning Agency Mortgage backed communities or cash or treasuries. And theres still a lot at delivering alpha. Sc frank . Leslie picker live from delivering alpha, thank you very much. Turning our attention now back to the rates. As rates march higher, keeping an eye on apple. Taking a look now at about 171, almost 172. A lot of brad apple ownership. What do you make of this action were seeing in apple . A lot of macro factors, theres china, that ftc investigation into the search. A lot of things are weighing on the stock. I would say those are secondary to what youre seeing in thamerms of apple. Expansion for the magnificent seven coming into the second half of the year, and one of the challenges now is a lot of that was led by enthusiasm around ai, and now what were experiencing is that investors, i think, are thoughtfully looking at that space and looking at those companies that could potentially monetize ai into 2024. If you think about what else is happening, look at the Consumer Confidence numbers we got this week. Present expectations, fine. Future expectations, way down from where they were over the past couple of months. And so that speaks to this idea of a weakening consumer, not just here in the united states, but to your point globally. Whats going to drive adoption of the new 15 pro, for instance, which is the device apple really wants to see pick up an uptick in the Holiday Season . If we are truly getting into a period where more of the Discretionary Income is having to be paid toward staples, were seeing the reacceleration of food and energy, it doesnt give a strong outlook for the Fourth Quarter for apple. I think most importantly, though, this thoughtfulness around what has what stocks what companies have experienced meaningful multiple expansion this year, which of those have been justified, and i think apple is falling to the side, because i think that investors are having a hard time justifying the expansion weve seen with the top line growth that has been, trangly, stagnant for several years. Bryn, you own apple as well. Shares down more than 8 month to date. Valuation 27 times forward earnings. Does it change your thought about apple . I think when we think about apple, were looking Company Specific and just the maturity of the company and just asking ourselves, you know, can it grow like it did over the last decade . And we keep coming back to the same answer which is, probably not, just given this incredible install base they have. Certainly growth on the Services Side they can continue to realize and its profitable growth. But, at the same time, we have to ask ourselves, does the stock deserve the same multiple nvidia has . And given the growth prospects, we have to say, no, it doesnt. It deserves to trade at a premium to the broader market, given the quality, the company and the balance sheet, everything else, the install base, but, we just grapple with the multiple which i think is more fair now than it was when it was up at 30 times, but weve seen multiples come down for all of Large Tech Companies including nvidia because the earnings have increased so much in that case. So i think when youre looking at relative dollars, where are they going within the space . I think there are other opportunities where there is more growth. Lets stick with tech. Over to you, weiss, you trimmed meta. Shares up 2. 5 , though. Look, it was an outside position, so its still one of my large positions, maybe even possibly my largest position. I think the stock is very cheap. There are some things that i dont like about the company. 23 times forward earnings is cheap in your mind . Yeah. I think its cheap in this market. It also goes to your confidence in predictability of those earnings and the cash flow as well. So i believe it is cheap, is it compellingly cheap . No. I still want to be mid cap tech, so its this and alphabet i think are the most reasonably priced with increasing earnings versus apple which has had basically no Earnings Growth the last couple of years, minor. But definitely not supportive of its valuation. I also, do am short calls on meta, higher above the market. I also like microsoft. Microsoft will be launching the First Quarter products with the chat gpt. Who is not going to want to sign up for that, right . Why is that not going to increase pricing and margins . I dont think its compellingly cheap. I think microsoft, given their growth aspects, is cheap. In other words, the position got too big. Its down to a normal size, large position. Lets talk about another one of your moves, you trimmed oracle as well. Was that getting outsized as well . I didnt trim. I booted it. I took, id say, an initial small position trading position in oracle after the big dump that it had on a quarter i thought was a pretty good quarter. Guidance was a little squishy. But i wasnt married to the position, and given how my view of the market has changed somewhat slightly that you have to decide what you want to own, what you want to live with through a very turbulent downward mark, and thats not just one where i was invested in it enough to want to stay there. Got some more moves here. Brenda, palo alto, looking at this one 47 times forward earnings. It is trading at a premium. When we look at where we think dollars will be spent on the corporate side, this is an area we think will continue to be important, and we look at the whole space, there have been mixed results from a lot of the companies within the group, but Palo Alto Network stands out in our mind based on the quality of the management team, the quality of the offering, and we think its clear that customers are really gravitating to our platform offering where theyre able to consolidate with one provider in increased efficiency in that way and the company is poised to continue to do well in this environment. Coming up next a surge in crude. Oil hitting its highest level in over a year. Where the committee stands on energy. Maybe i should have called you first but i was trying to get to you i was dreaming while i drove the long straight road ahead i drove all night to get to you the distance is nothing when home means everything. As you can see, the market is at session highs, even with the ten year back above 4. 6 . Welcome back be to halftime. Oil lower right now trading the highest level since august of 2022. Its helping lift the entire energy space, the only positive sector this month. Bryn, i will come over to you. You have a lot of energy exposure. Right. September has been an interesting month. The s p is down around 5. The xle is up 5. A 10 delta just versus the s p this month. I think that what you need to understand oil has moved up so quickly. You need to have oil stay above 80 for a while to get that oil out of the ground and be able to filter into the revenues of these companies, and so, i mean, ive been consistent about this area, i think, rates are structurally higher. I think 80 is the new 60 and oil will be structurally higher. And so i think going into the end of the year next year, we have to refill the spr at some point, that would be logical. We still have saudi at 3. 3 Million Barrels per day still taken back from the market. Russia is taking back from the market. And so i think you have these dynamics opec, opec plus, unfortunately, is in the drivers seat and they have an incentive to keep oil higher. I think from a positioning perspective, my favorite way to play it is theres an etf that is an equal weight versus xle, 40 chevron exxon. The rspg is an equal weight and you get more mid cap exposure and its up around 8 per year, year to date, and then Companies Like diamondback are up 15 year to date. So i think that people still, as we talked about last week, rent the space and are afraid to own it. I do think over the next few years investors will start to come back and start trying to own this space over a cycle versus just kimg it. Bryn is bullish on the space but we have to talk about the higher rates. Are you concerned about demand destruction . Im concerned about the dynamic Higher Oil Prices brings into the current environment. When we look at the Global Economy, it does represent a risk not only for consumers but Central Banks that will have to grapple with Higher Oil Prices filtering into core inflation eventually. And so that, i think, represents a real problem, in my view, and a fly in the ointment of this great story of the economy, the Global Economy improving, so i do think this represents a risk. Certainly the companies are benefitting from incredible cash flows at current prices right now, but we worry about the impact of the Global Economy. One of the big stories in the Energy Sector right now. Time now to get to our update, the headlines with silvana henao. Silvia, over to you. The new York Attorney general named donald trump on her prospective witness list. The former president is expected to be called to testify along with his children, bankers, accountants and current and former Trump Organization employees. Trumps defense team has a list of 127 fact witnesses, that is expected to be challenged by both the prosecution and the judge. The Hawaiian Electric ceo testified this morning at the first congressional hearing on the maui wildfires. The Company Leader defended the companys decision not to deenergize power lines saying it was not part of the utilitys protocol. The decision was made even as Hawaiian Electric was preparing for winds of more than 60 Miles Per Hour that spurred the deadly fire in historic lahaina. And the Senate Unanimously passed a new dress code resolution bringing business attire back. Senate majority leader Chuck Schumer chose to stop enforcing the unwritten code and senator John Fettermans sweatshirt made headlines. Senators joe manchin and mitt romney wrote a bipartisan bill requiring men to wear a coat and tie and slacks. There were no specifics on womens business attire. Frank . Im going to leave that one there. Silvia, thank you very much. Coming up on halftime, weiss making a big move in the ttail space and well walk you upo nike earnings after the bell. Those trades up next on halftime. 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. Somebody would ask her something and she would just walk right past them. She didnt know they were talking to her. I just could not hear. I was hesitant to get the hearing aids because of my short hair. But nobody even sees them. Our nearly invisible hearing aids are just one reason weve been the brand leader for over 75 years. When i finally could hear for the first time, i could hear everything. Try miracleear hearing aids with no commitment during our limited time sounds of autumn event. Call 1800miracle now. Icy hot. Ice works fast. Heat makes it last. Feel the power of contrast therapy. So you can rise from pain. Icy hot. Is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. Were back here on halftime. Stocks hitting session highs, the dow component nike gearing up to report its earnings after the bell. We also have a big move in the retail space, back over to steve weiss. Tell us why you sold your position in dicks. Based upon what i said before, you probably draw a Straight Line to it. Consumers under pressure. Dicks is uniquely positioned because they are able to keep their niche, so to speak, versus ecommerce, not broadly, but for the most part because its an experience, an experience for your kids to go there, an experience for adults. You can always order sneakers from nike online, et cetera, but theres something to go there. Also seasonally, even though there will be seasonable for the quarters, theyre not in their high season. They dont do a big ski business. They reported a quarter that disappointed. A lot of due to theft, but some others were by inventory. A solid management team. The stock has not balanced. Its tried to lift a few times. I increased position after the quarter and, you know, this is my this is my reminder that greed is not always good because, as you recall, target is 150. Got to 148. How stupid not to have sold it. I hate to keep looking at a reminder of my stupidity. I get enough that have when scott does the show, so im glad youre here today, but i can remind you, if you want. I didnt see the upside in it. I say it jokingly because i dont do stupid things ever, ever. Seriously, that was stupid selling it. With the stock down lifting, its just not where i want to be. You have to decide what you want to stick with and keep your capital and when the opportunities arise to be able to put capital to work. Its great to have a war chest. I dont mind owning 5 treasuries, by the way. We talk about the consumer being stretched, the broader Retail Sector, nike stock under pressure but the jordan brand, its highest end product, having a banner year. Up 30 when it comes to sales growth year over year. Thats a higher margin, so if the consumer is so stretched high end is not as stretched. Weve seen weakness but high end and collectors, theyre not stretched. They are going to do whatever they can. But broadly, look at car max. The stock got crushed yesterday. Do you think thats an isolated incident . No. Were talking about the consumer being stretched, you own tjx. Whats your thought about a discount retailer in the current environment . We like tjx because theres excess inventory in the channel, that means they get Higher Quality product, also the advantage of a tradedown that may be coming from the middle end consumer, not high end but the middle end, trading down. We think there is still a demand to be had, but within the retail space, our preferred area of exposure. With Higher Oil Prices and gas prices, that filters into the consumer. The consumer has spent on experiences this year so its a question of do they flip back and spend more on goods again, or do they take a pause because theyve overspent during this environment that weve been in . Shannon, we have a big number today, 46 of u. S. Consumers with student debt, planning to cut back on spending on sneakers right now. Whats your take on nike and the broader Retail Sector . I think nike is indicative of some of the transformation in consumer demand in the postpandemic era. We had a lot of the goods spending and switched to services. Reports out of retailers over the course of the last several weeks, theres a mismatch in terms of the goods on the shelves and what consumers are potentially looking for. Now that may be indicative of an overall slowing of Consumer Spending or it may just be that retailers are not yet in tune with this third phase of pandemic spending. I think as it relates to nike, nike has been attempting to shift their business from relying on secondary retailers and intermediaries to direct to consumer, and i think that shift will be increasingly more important as theyre able to manage inventory and manage that consumer design and demand better, so i think if youre looking at this in terms of what can nike say to potentially get some enthusiasm around the stock, i think it would be around what they plan to do to expand that and rely less on the intermediaries they work with now. Nike higher now but down double digits month to date. From delivering alpha, real estate reality. Our Morgan Brennan sitting down to talk the state of that sector t resonnutoar asheat ctie mch higher. Halftime will be back. One prawn. Very good. Did i say chicken wrong . Tired of people not listening to what you want . Its truffle season ah thats okay. Never enough truffles. How much are they . Its a lot. Oh okay im good, that its like a priceless piece of art. Enjoy. Or when they sell you what they want . Yeah. The more we understand you, the better we can help you. Thats what u. S. Bank is for. Huge relief. Yeah. Welcome back to halftime. You can see stocks are at session highs right now. Right now well talk reits. Concerns mount over the health of commercial real estate. For more on what lies ahead in this space, lets get out to our Morgan Brennan live at delivering alpha. Morgan, over to you. Frank, thanks. We just got off stage. Its great to have you here. I will start with the same question we started with on the panel, and that is theres been a lot of pandering about the state of commercial real estate. Is it warranted . The state of commercial real estate is not one thing. Different sectors are at different speeds and our jobs are to put our clients into the sectors that have the best performance. If you think about the best performing sector is a High Conviction for us data centers, what were seeing is an explosion of demand because this is built on more content creation, more commerce happening over the internet and then, of course, now all of the demands for ai. We bought a Company Called qts. In the last year alone weve done more leasing of space to our tenants than in the companys first 15 years combined and have line of sight to the company six times bigger than we bought it. And that is just because more of our life, more of the world is happening over the internet, the digitalization driving demand for that asset class. On the other end is traditional office, the weight of higher capital cost is having an impact. Across the spectrum, you have Different Things traveling in different speeds. Plaquestone is the largest Real Estate Investors in the world. You have your pulse on the subsectors. You exited office before we even had the pandemic. Why did you do that and when you Start Talking about secular growth stories, why is that compelling now . We invest schematically and look at the world and whats happening. Which are the Asset Classes benefiting from trends and changes and how people are working and living and shopping and traveling . And on the flip side, we try to pivot away from more challenged Asset Classes. When you think about traditional u. S. Office buildings, that story is also about who we are. We look very carefully at all of our data, have 600 billion in real estate, a heritage of studying whats happening in our portfolio to try to inform our next decisions. And what we saw happening was lower cash flow growth, high capex costs, and a share shift. So we felt we wanted to be in Asset Classes with strong cash flow growth and short duration leases because we wanted to be positioned in the right sectors and with the ability to grow cash flows and a higher rate environment, and were living that now. You can think about real estate like any other asset class. If your multiples are not expanding, or if our cap rates are not coming down, we need cash flow growth in order to draw value for our customers. And 50 of our portfolio today are in those sectors, logistics, data center, housing, where we see strong cash flow growth helping us to deliver great performance despite higher rates. You raised a record 30 billion for your latest Real Estate Fund later this year. Are you deploying that capital or waiting for values to be more attractive here . Well, theres never an allclear signal. Investing in real estate for 30 years. We know that we always want to be looking for opportunities, but 30 billion we raised last year, well be patient and find the best opportunities. This year a lot of our activity has really been focused on europe where weve seen the most negative sentiment around real estate, around the market environment, translating into opportunities for us to take private companies to buy assets from sellers looking to delever, from those forced to liquidate, and were doing that in our highest conviction theme. This has been in logistics because we still see continued growth, very low levels of vacancy and we see those assets as interesting in our ability to create fundamental value in what is a dislocated environment. Kathleen mccarthy of black stone, cohead of real estate. Thank you for joining me here at delivering alpha. Morgan, thank you very much. Also, ill be heading over to delivering alpha for a panel at 3 45 eastern talking Alpha Alternatives with aerial alternatives and franklin t temp templeton. Plus dont miss scott wapnersnt view with Brad Gerstner and bill ackman. Coming up here on halftime, one Committee Member is making a big move in the banks while trimngnemi o of their positions. Well break it down coming up next. S fast. Heat makes it last. Feel the power of contrast therapy. So you can rise from pain. Icy hot. Across the globe, industries are transforming and businesses need to navigate the changing landscape to stay ahead. When you partner with barclays, every change leads to a bold possibility. You have the vision. We have the insights, Financial Solutions and Global Perspectives to help you make it real. Barclays corporate and Investment Bank powering possible. Explore endless design possibilities. To find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. Welcome back to halftime. Bank stocks remains under pressure with the etf that tracked the space on pace for a second straight month of declines. Youre tripping another Bank Position this time. I did. So if you recall goldman, i added to goldman in front of the ipos, in front of arm and instacart. So supersized position, taking advantage of it. And the stock was trading actually lower than where it is right now. So i thought it would be a good trade. Goldman is still a good position. But after arm and what we have seen in the markets since then, particularly after instacart to go as well as was thought, i thought let me take that part of the trade off, but the trade aspect of it is over. I do like the opportunity going forward, particularly if you see a steepening of the yield curve. You can cherry pick part of the yield kcurve. Thats good for banks but were not there yet. And i dont believe, given the market action, is indicative of what i think the market will be. I dont think that ipo market opens up, and i dont believe it continues as i have discussed before and continues to be p paltry, at best. So a trim, not a sell. Do you share steves concerns about the ipo market and potential for a lack of m a in the Fourth Quarter . Yeah, i think that those three ipos that came out were a little appetizer for all of the other ipos. And i think all three are trading below that price. So for the latestage vcs that wanted to come out, they may go back into hiding because ultimately, you want to see some follow through on those names, and you havent seen that. I think that higher rate story, just from a sentiment perspective, makes that tougher. Ultimately, Great Companies dont care about the yield curve. This is like a shortterm issue that will get resolved, but those companies have to be better and better to become public. You own jpmorgan and black rock. Concerned about rates and the financials . When we look at the land scape of where we can invest money, the banks, it seems like a harder story, especially with the yield curve. We talked about potentially lack of demand for capital and loans at this current level, and then capital markets, which were showing signs of life but now its uncertain whether there will be follow through in the Fourth Quarter. So we are happy to stick with jpmorgan, which is the highest quality name, and black rock benefits from flows going into fixed income. As we said, banks moving higher today. Coming up, final trades from the committee. Stay with us. A competitive advantage. Its raising capital to help companies change the world. Opportunity is making the dream of Home Ownership a reality. And driving the world forward to a Greener Energy future. [applause] sometimes the only thing standing between you and opportunity is someone who can make the connection. At ice, we connect people to opportunity. A every day, businessesone wh everywhere are asking on. Is it possible . With comcast business. It is. Is it possible to help keep our Online Platform safe from cyberthreats . Absolutely. Can we provide health care virtually anywhere . We can help with that. Is it possible to use predictive monitoring to address operations issues . We can help with that, too. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. Ah, these bills are crazy. She has no idea shes sitting on a goldmine. Well she doesnt know that if she owns a Life Insurance policy of 100,000 or more she can sell all or part of it to coventry for cash. Even a term policy. Even a term policy . Even a term policy find out if youre sitting on a goldmine. Call Coventry Direct today at the number on your screen, or visit coventrydirect. Com. Join me tomorrow for an exclusive interview with Christian Klein to talk ai, the cloud and a whole lot more at 5 00 a. M. Eastern. Now, here on halftime time for final trades. Brynn, youre first. Poct. Its an innovator etf that gives you guard rails on the s p. You have a oneyear time horizon from october to october, 15 balance side protection with 15 upside. That takes you about 4. 90 on the upside down to 3. 65 protection if we were to go there this time next year. Weiss . Im going with the tenyear. Theres nothing wrong with the yielding youre getting there. And its tax advantaged, as well. Brenna . Abbott labs. You have to look beyond the impact of covid tests. Its a great organic growth story, growing double digits. Shannon . Reits. We talked about them earlier in the show. A lot of the delinquencies are going to be with office, and theres a lot of diversification within that universe. That does it for us. Big day here at cnbc, but the exchange starts right now. Thank you very much, frank. And welcome to the exchange. Im kelly evans. Heres what is ahead this hour. Deficits in oil are animating the bond market. The bond market is animating the stock market. And its not just happening here, its happening globally. And our market guest is all over the map literally with where to find the biggest returns this backdrop. Another strike looms in another major part of the economy. This one in health care, and it could be massive. 75,000 frontline workers could walk off the job come wednesday. We have the union replive, and well look at stocks in the