Alongside tom keene and lisa abramowicz, i am Jonathan Ferro. The s p 500 positive by 0. 22 . Tomorrow morning, retail sales, thursday from walmart. How many times have we done this from august . Talking about china. China the headline once again. Tom it starts and ends in china with a set of news. What is interesting to me is it is not one story. You have to get briefed on this to get up to speed on three, 4, 5 stories. Chinese equities in the tank, iron or somewhat in the tank. A lot of moving parts going on in china and that comes back to jackson hole. Jonathan one chinese developer, Country Garden holdings seeking to extend for the first time ever. Away from that we have a wealth manager missing payments. This is starting to mount in a bigger way. Lisa which begs the question of when this becomes financial contagion in china. Why are we not seeing more trickle out affects . Is that what we are seeing in germany or parts of europe . A lot of u. S. Companies are rationing back expectations for growth in china. Beyond that, where do you see the contagion . Tom i see it in the terminal. New yen weakness. The chinese yuan is right back to recent weakness as well. I see it in the 30 year bankrate mortgage. Many different Mortgage Rates, 7. 53 . You can around that up to 8 but i am not there yet. Jonathan you see stress in the bond market, in treasuries. 30 basis points higher in three weeks. Lisa, im with you. Eight years ago, you get headlines like this from china. The last three weeks, life above 4 , can we sustain life above 4 on the 10 year . Lisa a great question, especially in light of weakness we feel coming from china and the surprising resilience of the u. S. Consumer. It is an interesting dichotomy. Chinese data pointing to all of this weakness and then we also see the consumer and what the u. S. Consumer keeps doing which is spend spend spend. Jonathan look at what is happening with crude. Every single morning, deflation, disinflation. Crude is up more than 20 off of the june lows. Tom bring it back to my 201 k, what do you do if you are in stocks and you are listening to all of this talk about macro battle . Im not sure. Lisa what a lot of people are doing is diversifying, they are going into commodities. How long can you continue to go to some of these areas if china ends up being the major macro story . Jonathan for the first time we dont get a quiet summer. Jackson hole about 10 days away. The future is going to be different to the past. Tom should i go hiking in jackson hole . Jonathan you should go hiking next week. Lisa goes hiking. Lisa went canoeing next last year at jackson hole. Lisa ive got big plans this year. Jonathan do you . Tom if you go hiking in wyoming, there are snakes right . Lisa snakes, elk. Jonathan you are more concerned about the snakes . Tom we are staying in like a motel 6. Lisa we are not saying in a motel 6. Do you think the snake is going to get into your room . Tom when i walk into the room, i checked under the bed to see if there are snakes. Jonathan lets get to the price action. Equity futures only s p 500 up by 0. 2 . First backtoback weekly loss on the nasdaq 100 of the year so far. The first back to back weekly losses for the year so far. As well as the s p 500. The yields above 4 on a closing basis. Above 4 on a closing basis for a ninth consecutive session. Lisa, going back over time, it is rare to see that. Lisa especially when a lot of people are arguing we will go back to a lowinflation moment. You got Goldman Sachs calling for rate cuts in the second quarter. As far as today, it is light ahead of a week nominated by retail sales but i am focused on china. Bullard was one of the most nominal voices, he was a hawk. Are they hawks left . What does a hawk on the fed right now mean at a time when they are looking for a soft landing . Talking about the Inflation Reduction Act and what this could do for the u. S. Economy. Im curious to see what she says about china. 10 00 p. M. , china is releasing july economic data, including Industrial Production and jobless information. This comes at a time when broader markets have largely shrugged off china. Can they continue to . At what point does the data supersede the calm of a soft landing in the u. S. . Jonathan we have to talk about china, talk about retail sales and talk about the developments in this bond market. Lets kick it off with ben labeler been laidler. Lets talk about this bond market. Life above 4 on a 10 year, can it be sustained and what does it mean for your equity market . Ben i think it can be sustained. 2 real yield. You go back about 15 years to see them be reasonably sustainable. 4 u. S. Gdp now costs. I think this is pretty much the talk and i would be leaning against this. I think Inflationary Forces are still out there. Weve had this headlines last week of this tone up in inflation but i have been leaning against this. I think longduration assets are the place to be. Tom the wall street journal had a wonderful article looking at five retirees, each of them with 5 million. The constant theme of these five different families was they bought attack, they owned tech, they stayed with tech. You say tech is not going to tank and that it has more in the tank. How do you look at tech and say they have legs to continue . Ben because of the earnings season we just saw. Where did the growth come from . It came from all of these tech heavy sectors. These are secular growth sectors, which are seeing topline growth but you are beginning to see that come together. To the extent that u. S. Equities get let out of this earnings trough, i think it is tech that is going to lead. That will take the ceiling off valuations youve had put on over the last month or so. Lisa youve seen a 10 year yield above 4 for nine consecutive sessions. At one point at what point do you start to and that makes you reassess your whole call when it comes to the equity space . Ben obviously the fundamentals actually change. I dont think they have. A lot of this bond yields move is technical. Changes we have seen of japan, i look at fundamental growth indicators and they have not changed that much. These numbers, the 4 and the 2 real yields, these are really top of the ranges. I would be very surprised if we could break through that. Im happy to take a move sideways from here but i think the big incoming direction is down and that gives me confidence along with the earnings intake. Lisa you say it seems really technical in nature and get it has been accompanied with seven straight weeks of gains on the crude level. We have seen a real rally into, oddities more broadly into commodities more broadly. How do you sort of pair this with the idea of china slowing . How do you look at the commodity space and say the yield move has been technical . Ben it hasnt completely been technical but there are two clear and present dangers for u. S. Markets. Oil is the second one. The 70 rise in gas prices is a double negative. It takes about 100 billion out of Consumer Spending. It will start pushing up Inflation Expectations. I think ultimately it is selfcorrecting. The Higher Oil Prices go, the more people will worry about growth and Interest Rates and that will cool the demand side. China is a big deal in oil markets, but it is only growing 16 . It is a much bigger deal in industrial metals. That is where you can see the weakness. We are right to worry a little bit about oil but i do think it is selfcorrecting. A lot of the rally you have seen has been tightness on the supply side. I think demand weakness will follow if brent stays above 85 for long. Tom youre a claim is late 2018, you had courage to look out 18 months. How do you look out 18 months from here . Ben looking to 2024, what is going to be happening . I think we will get digital earnings growth. I think the fed will cut Interest Rates and those are the only two ways to make money in markets. We are going to have a 15 swell and earnings over the next 18 months. Jonathan you make it sound so easy, been laidler of etoro. Great talk to you. Great to talk to you. Tom i give the journal really great marks, they have made a commitment to talking to people of all different socioEconomic Outlooks about retirement. Some of it is not pretty. There is a huge part of america that is struggling. These five families are not struggling. One guy whose wife died three weeks after he retired. The one thing i saw was that at some point, they all decided to just buy name the tech stock and ignore it. Jonathan that wasnt my favorite story. My favorite was the scary math behind the treasury market. I can share some of the article with you right now. Highlighting the cbos forecast, that maybe it is too optimistic. It envisions the net Interest Rate paid on the debt is near is barely 3 . Lisa, some of this is quite worrying when you start to look at it. Just how much the Interest Payments nondefense spending in the years to come, it is pretty amazing. Lisa peter read this and put up a note talking about this article and on the one hand he said it seems a bit extreme to us and yet the details arent wrong. You read through it and it is concerning and he says he had to think about his longerterm bond yield call. At what point do people reassess how long they can shrug off fundamentals that they have been able to shrug off are so many years and say this time it is different with increasingly disparate markets . Jonathan it goes to the question i shared with ben laidler, can we sustain life above 4 . Who does it hurt first, the sovereign or the corporates . The sovereign which may experience a squeeze as well . Lisa they are somewhat interrelated but i would argue some people are saying it is the sovereign more than the corporate. Going into a google bomb, you will public get your money back. The u. S. Could be subject to all sorts of political shenanigans. Youll get your money back but you could get mucked up in some sort of government shutdown. Jonathan sebastian page from t. Rowe price is coming up. Good morning. I need it cool at night. You trying to ice me out of the bed . Baby, only on game nights. You know you are retired right . Am i . Ya save 50 on the sleep Number Limited Edition smart bed. Plus, 36 month financing on select smart beds. Shop now only at sleep number. Was also the first time you heard of a town named dinosaur, colorado. We just got an order from dinosaur, colorado. Start an easy to build, powerful website for free with a partner that always puts you first. Start for free at godaddy. Com i think this is all kind of nonsensical theater. Ive made that clear to the rnc as well. Way back even before i entered this race, i thought the pledge was a bad idea. Donald trump is now playing that game but that is what he does. I would not be the least bit surprised if sometime around sunday or monday of next week, that he signs the pledge and he shows up on the stage on wednesday. Jonathan the first debate is next wednesday, that was Chris Christie, republican president candidate on abc over the weekend. Will the former president be on that stage in milwaukee . From new york city this morning, getting the week started with the equity markets shaping up as follows on the s p 500. Two weeks of losses on the s p. Concerns in china once again. Missed payments, all of that kind of bad stuff. Yields unchanged on the four, 15, 81 yields unchanged, 4. 1 581. Tom i simply want to go back to things that are buttressed right up against resistance depending a what the chart is an one of those is the 10 year real yield. We come back to an inflation around 1. 78 , that is not to be ignored. Jonathan you want to talk about tension . Did you read that Magazine Article that got into over the weekend . Let me share the headline. Is David Solomon too big a jerk to run golden sock Goldman Sachs . When was the last time you saw anything like that . Tom that is the correct point. This broke on friday. This is a huge deal within new york and within american wall street. It is a combination of a New York Times article, Business Insider writing about his alma mater and some students were upset and then the bombshell and the reporter for the new York Magazine, not New York Times is really respected. I think it is the heart of the matter. This is not some journalist running around trying to make headlines. She is the real deal. Lisa you dont write an article like this unless a lot of people are unhappy with the leader of the company. That is the bottom line and i think what you have to wonder is at what point does the issue become a bigger problem . Tom jon and i are just tv and radio animals but you are the real deal from print. There wasnt all that much new in the new york Magazine Article but it was the language that was placed into sort of a funky magazine versus something serious like Bloomberg News or New York Times. The language was shocking. Jonathan it was scathing. Lets do the sport analogy. If this was a u. S. Sports team right now, we would talk about a manager that has lost a lot. Tom but we wont go there. Jonathan mike mayo of wells fargo is quoted in this article and he basically says ive called for miniatures to leave in the past, for ceos to leave. He has not made this call that time around. This feel so personal within the bank. Away from the performance of the quarterly numbers, this feels very personal within the bank. That was a lot of peoples take away. Tom you wonder where this is going, into the weekend and the week. How do you stagger into september with this cloud . The cloud around Morgan Stanley is who is going to replace durbin . This is a whole other scale. What we are going to do now is migrate. Bramo is our state fair expert. She was in iowa at 11 00 this morning, the milking demonstration. The milking parlor, north side of the cattle barn. They showed up this weekend to do the politics of iowa, selected republicans. We go all state fair with the director of policy research at bt ig. Are they kissing babies out there . What are they doing besides gazing at the cattle and kissing babies . What are the republicans doing . They are beginning what is going to be a long and ugly fight. A lot of this is quaint, it is great to see a person running for president flipping a hamburger. A lot of this is good oldschool retail politics but underneath the surface, there is a lot of disdain and a lot of uncertainty over how the next few months are going to go. We have a debate next week for republicans and we dont even know if we are going to have the leader in the polls, the former president participating. I think it is plain and cute and sometimes nice but if you peel the onion on your hotdog, you realize it is going to be ugly. Tom you have the fabric of the midwest with you. Is the republican forever changed by former President Trump . Isaac i will tell you this. I have a fun job. I get to talk to democrats and republicans. What i find interesting is that both democrats and republicans are largely unhappy with the candidate who is leading in the polls for them. Donald trump is the presumptive nominee at this moment. He is leading in the polls by a wide margin. President biden is the presumptive nominee, largely unchallenged except for one challenge which has not shown any running room in the polls. What ive noticed is a frustration with the leading candidates, that perhaps can lead to a change in sentiment over time. It is hard to bridge that divide between what some Party Members hope and the numbers on the ground. Donald trump is going to get 30 plus percent of the Republican Party in a primary race and matter what he does. When you have this many win winner take all primary states, he is the nominee until someone proves to me that it will be someone else. Lisa i was writing a story reading a story over the weekend about the dynamic about the indictment affect. Every indictment that comes out for President Trump basically boost his popularity because it keeps him in the view of potential voters. How long does the indictment affect last . Isaac that is one that we are all watching. Want to come from georgia and there are conversations suggesting the grand jury will hear from folks this week, with an indictment as early as the end of this week or next week. Ive got to tell you, weve heard this phrase time and time again, teflon don. That has proven to be one of the truest ways of thinking about this former president. His supporters simply dont care and at times it gives them more fuel. For the average voter at the margin, it is not going to change their opinion of him. If he is charged with rico violations in georgia, perhaps that gives him even more fuel to fight back against the dark state, the forces that are trying to stop him and hurt you. It gives him the talking point that he wants. I continue to view these indictments primarily as political fodder that i think will give him more fuel on the campaign trail. Jonathan keep us up to speed. New york is about falsifying business records. Secret documents, florida. Washington is january 6. What is georgia . Isaac georgia could be about their statelevel rico statute. That would allow the Fulton County da to pursue charges relating to the former president supposedly pressuring state officials to falsify or overturn the Election Results at the state level. That was really interesting because it isnt a federal charge, it is a state charge. Even if a republican is in the white house in january 2025, you could not sweep it under the rug. That one has some unique powers. Georgia has been a little bit more willing to open up their courtrooms to cameras than new york or even the fed. That is also of interest. Jonathan thank you sir. Isaac boltansky of btig. Im sure i am not the only one losing track of this. Tom i think the nation, even the supporters are just benumbed by the whole thing. To be a polite, this is not normal and i yearn for the way the british