Joining us for the entire hour is dan nathan, founder of risk reversal advisers. Welcome back to you. Sara. So theres something youre looking at about the s p 3000 level and fed meetings if you go pack to july 31st, the last time that the fed met, they cut a quarter basis points Interest Rates the first cut in ten years and the stock market was above 3,000. And and it wasnt until the trump tweet the next day that we broke down and stayed down all of augusts here we are now, expectations are for another cut, and it seems like the s p has really paused again at the same level, about 3,000. Weve got lots to discuss with dan, but lets drill down on the big stories were watching today bob pisani is tracking the big reversal leslie picker has details. Mike santoli has a special market dashboard ahead of fedexs earnings which hit after the bell and well have for you here on closing bell. A big day in oil. Oil dropped right after the open on a reuters story that saudis oil output would be fully back online in the next two to three weeks. Saudis Energy Minister said that supply would indeed be back online by the end of september bottom line is this. Big energy names that were up big yesterday. Some of them double digits like apache and marathon, they had given back about half of their gains today. But elsewhere, the market overall, its back to a more defensive tone all the cyclicals that rallied last week. Metals, banks and industrials all trending down again today. Bob, thank you. What do you do with Energy Stocks at the bottom of the happy todheap today so it doesnt matter about the Energy Stocks. Theyre less than 5 of the weight of the s p 500. In a lot of ways, crude down 5 is welcome to Equity Investors and the stocks dont matter so much we want to see them participate, they are going to be involved as far as s p Earnings Growth if we get that in that space but i think crude was testing the low 50s prior to this global macro event over the weekend and i feel a feeling its going back that way and that really has to do with maybe deflation and maybe has to do with the dollar assuming that doesnt happen, if we stayed around 60 bucks for the rest of the year, does that hurt the rest of the consumer or be 80, 90 . I think it does ive heard a lot of strategists say, i think it doesnt, but you think about, what are the headwinds to the consumer right now. We had this quick rise back in rates. We know that the dollar is decently bid we know there are some consumer tariffs that could increase as we get into the end of the year. So at the end of the day, i dont think you really want Higher Oil Prices right now. Meantime, wework postponing it ipo amid growing questions about the companys valuation and leadership former twitter coo adam bain weighed in on the Company Earlier in the halftime report. It is interesting this is probably one name where the investors and the customers are so far in disagreement when you talk to commerce at wework, they actually love the product. So to jamals point, they do have Product Market fit from a customer standpoint. The investors, the Public Market investors so far have begun to speak out, both around things like governance and the like lets bring in our own leslie picker right now with more on weworks decision and what comes next i would actually add another constituency to adam bains list that is, wework employees. The company incentivizes through stockbased compensation, so punting the ipo could also impact employee moral. Wework had an allhands meeting this morning to address its workforce amid all the ipo controversy. The meeting was private, but those in the room said executives reiterated plans to go public by the year by the end of the year without delving too much into the details. The question, though, becomes how much patience do employees have for the ipo delays and lower valuation discussions . The last thing this Company Needs at a time like this is a defection of the wework workforce. Gu guys whats the latest on softbank before they can get this ipo back on the road so as one person close to this deal explained it to me, picture a boat with a bunch of holes on either side and if youve got adam newman in there and the advisers in there and the bankers who are underwriting these Credit Facilities everybody is trying to plug the holes to keep the both from sinking. Everybodys incentives are aligned on that front. Now, of course, everybody has alternative incentives, as well. For example, softbank and massa do not want to see their vision fund suffer as a result of a big writedown in its wework position that said, its unclear that necessarily delaying the deal gives them any kind of step up that they might have otherwise gotten at this point in time so softbank, its been reported, weve been reporting it, that theyre willing to come in and provide some sort of anchor investment into an ipo but the question is how much and whether that makes a big difference now, earlier today on the halftime report, social capital founder also discussed wework heres what he said when asked whether softbank had been a force for good or evil in Silicon Valley well, i think its generally been a force for good, because the reality is founders have been able to find a ready source of capital and from the perspective of innovating on things, they have been there the question is really more about whether it is going to leave a great Lasting Impact in the ecosystem once its 100 billion is put into the ground and i think there, theres a huge question mark the problem its going to create is we have created a whole class of capitalhungry companies who because they could have raised, you know, 200 million did when they should have just raised 50. And they will find a way to spend that extra 150 million, but i suspect the product will not be 150 million better how much can you blame newman for taking the money if people are willing to give it to him. You blame some of the execution, but not the fundraising itself. He has great points wework is not a technology company, its a raeeal estate company. Especially as they move around the world and expand geographically, but i think chamaths point about whether or not its a force of good, theyve moved markets. Just the size of the checks they were willing to write and the valuations they were willing to pay. So wework would not have had the round that it did at 47 billion if softbank wasnt forcing that a year ago and ill just make one point if this comes public, it will come at a price where its going to work for public investors and this is great news if this is the sort of Business Model you want to invest in as a public investor. Its not great news if you invested in that last round with wework at 47 million. It will take an awful long time to get back to these levels. How much, leslie, do you think this has hurt the reputation and the hype around softbank and massa san it depends what they ipo at it needs a liquidation event before we can see what the softbank, especially at a 47 billion valuation, as well as the valuation in the 20s that they also invested in. They have kind of this blended valuation. So if it comes below 20 billion, there was this bernstein note that said, yes, they would be underwater if this ipo comes in at a significantly lower valuation than that. It appears it might be, but it all depends on timing and when it would go public in terms of your earlier question about softbank and what it means for its reputation, i think a lot of this has to do with habits and the fact that, yes, if an investor is giving you money, you may be inclined to take it you may be kin clied to take it to fund your growth. But the yes then becomes, what does that mean for the zmin of the company and the ability once you do transition into a Public Market company to apply that discipline and transition to becoming, say, profitable to, you know, figuring out how you can grow while also not spending money like its water . I think those are some of the key questions that people in Silicon Valley are asking when it comes to softbank and other investors. Theyre not the only ones who are really doing this right now. Yeah, softbank poured about 7. 6 billion into uber and also hasnt been performing very well lets send it over to mike santoli for a look at todays market dashboards. Overnight guaranteed, well, thats fedexs promise for packages well see what they can deliver tonight with their numbers and overnight uncertainty. Thats a little bit of a look at this chaotic overnight funding market weve been experiencing and then seven nights journey, thats about how long weve had this massive rotation among styles in the market well get a checkup on that near the close. And goes buck in the night one investment factor that might have some folks being a little bit on the defensive relating to the buck overnight guaranteed heres a look at fedexs valuation over the past 20 years and its at an historic low. On an absolute basis, its trading about 11 times forward earnings, a little bit over 11 times. Relative to the s p 500, though, it has essentially never been this inexpensive its at about 0. 7 0. 6 times, 0. 6 or 7 times the s ps overall valuation. Back here when it was really cheap on a relative basis in 2000, it was really just because Growth Stocks and the overall market were so expensive that it was flattering the valuation, even though it wasnt all that cheap. The question is, has something structurally changed for fedex, is it just a global macro story. The loss of amazon customers, is it really a big hit or not so i do think expectations in terms of implied by the price of fedex shares and the valuations are relatively low going into tonights numbers, guys. Well have those numbers live in the second half of the show dan, whats your take as to whether this cheap valuation for them is for cyclical reasons or structural reasons i think its a little bit of both fedex has the double whammy of this Amazon Effect but they also have issues with china and issues with global trade we know that the chinese have actually brought up some very specific issues about the way packages are delivered by fedex over the last few months they are on a list of u. S. Companies that theyre going to target when things when were going back tit for tat so at 11 times, this thing has been banging around at levels over the last year, which we havent seen in a couple of years. And it really has to hold. Its just rallied 10 into this report i think if you get a beat and a raise and just a cautiously optimistic view about trade, this stock probably holds those lows fedex essentially flat ahead of its earnings coming in less than an hour still ahead, the Federal Reserve kicking off its twoday policy meeting in Washington Well discuss what tomorrows Rate Decision means for your money with former fed governor sarah bloomraskin. And later, the man who cofounded netflix. Well talk with the companys first ceo, Marc Randolph and as we head to break, a quick take on our data tracker today. Industrial production higher, climbing 0. 6 in august, peating estimates of 0. 2 . Home builder estimates came in higher as well lbeig bwn 25. Wel rhtac orlando isnt just the theme park capital of the world, it also has the highest growth in manufacturing jobs in the us. Its a competition for the talent. Employees need more than just a paycheck. You definitely want to take advantage of all the benefits you can get. 2 3 of employees said that the workplace is an important source for personal savings and protection solutions. The workplace should be a source of financial security. Keeping your people happy is what keeps your people. Thats Financial Wellness. Put your employees on a path to Financial Wellness with prudential. The world is customized to you. Built for you. So why isnt it all about you, when it comes to your money . So. Whats on your mind . We are edward jones, a 97yearold firm built for right now. With one Financial Advisor per office, were all about knowing whats important to you the one who matters. Edward jones. Its time for investing to feel individual. 45 minutes left of trade heres a check on shares of chipotle winning today, getting a pop on news its adding carne asada to its menu for a limited time it says chipotles first new protein since it added chorizo back in 2016 carne asada will be available starting thursday. Chipotle trading up 3 thats not an alt meat, a fake meat, its a real meat, but investors think maybe theres a limit stimulus boost there its already been on a monster run this year for that stock now the fed will be kicking off or has kicked off its twoday meeting in washington today with most investors expecting the central bank to cut Interest Rates for the second time this year. The Carlyle Group is out with a new report looking at the complications of a low Interest Rate environment, arguing that investors have focused too much on Central Banks, ignoring other factors that are depressing rates like demographics, technology, and rising corporate savings. Joining us now is the author of that report, jason thomas director of research at the Carlyle Group. Thank you for joining us thank you for having me what are the investment implications of what you found here so rates are cycling down in the United States. But the permanent long run equilibrium Interest Rate is low and its staying there its not going back up so investors have to get out of their head the notion that were going to go back to 4 , 5 longer data yields in the United States or much above 1 growth ever . I think that over any conceivable investment horizon, that should be the outlook its a way now to new reorient your portfolio in that environment. If you look at a portfolio that would generate 8 to 9 returns on average, normally your base rates would generate 4 to 500 basis points of that your risk premium would be the rest today, the risk premium, the risks that youre taking in your portfolio has to increase to hit those sorts of returns what about the kind of broader Global Growth environment and the amount that were focusing on Central Bank Action and whether or not that going to be the crucial factor to change the direction and momentum of growth i think we focus too much on Central Banks, of course and i think that were in a structural malaise where this period of low growth is going to persist. Theres really not much that Central Banks can do about it. We have a fiscal policy lever. And i think that one of the key implications of a lower for longer environment is that theres more fiscal space than we thought so in in places like europe, you have a very odd policy mix where you have negative Interest Rates at the same time where you have roughly budgets and balance. And a i think a much more appropriate mix would be budget deficits of 3 to 4 , similar to what we have in the United States, and that could change savings and investment relations in ways that actually allow for rates to move up somewhat and have somewhat faster trend growth but would it, though, when you think about we had that fiscal stimulus, that huge tax cut at the end of 2017 so we had one year of a bump in growth, hacked on 1 trillion to the deficit, and now here we are coming back right to trend for all intents and purposes how do we continue to do that . Im really not talking about a fiscal stimulus or a cyclical move im suggesting on a longer term basis we can have longer budget deficits than weve had previously because rates will always stay low what happens when they go back up again he doesnt think theyre going up thats precisely the point. Once you incorporate the notion that rates will remain lower for a much longer period of time, because of structural factors. Demographics, thats not switching anytime soon you have this enormous grease in savings in the corporate sector where you have the ten largest businesses by market cap in the United States that generate 2. 5 times as much cash from operations as they reinvest from the business so you have savings and investment relations that have moved in ways. And once you incorporate that, you can incorporate larger deficits the ipos that weve seen of late, thats concerning you or you think its a bullish sign when you see money going into these lossmaking companies . Thats the thing, you have a banner year for ipos that are loss making. In fact, if you look, theres been 130 ipos through the end of august only 22 involve profitable businesses 17 , thats the lowest share in history. The only time that we had shares this low, close to it, were 99, 2000, we know thow that turned out. I would be very correspond some of these companies will do very well and theyll grow out of these issues into profits, but on average, i think you have to be concerned. But even though the market has basically rejected wework, uber and lyft havent exactly been successful. I mean, its in a market that its imposing discipline to some extent, but until recently, the ipos were up about 30 . There was a lot of enthusiasm. Is wework a sign is it idiosyncratic or a sign of changing perspectives on these lossmaking businesses these losses are not small the average ipo this year, negative ebitda of 85 million so an annualized rate of negative 100 million on average. These arent trivially small losses these are very deep lossmaking businesses i think its something to be concerned about. Low rates forever, not low rates for longer as long as any of us in any of our time horizons from an investment perspective i plan to live a very long time, but there we go. Well see. Jason, thank you