The move in Interest Rates, the impact, if any, it could have on that tech trade. Josh, ten year, 78 basis points, 30year highest since june is this going to be a big risk for that growth trade . Im not sure. It certainly could be. But heres the way that i think we want to think about this. If you go back to february of 2018, that is when the curve peaked, right . Then we had several scarce where we thould we would have a thought we would have a yield curve above those levels but were not there and every time we gotten to that level weve had a big fade what i do think is happening now that is notable, theres a big catchup under way, Small Cap Value is on fire Small Cap Value of 5. 5 over the last three days and large cap tech is not giving up much while thats happening it possible you could have both things working at once i still think that if you get the big cap tech names hanging up there toward highs and not serving as a source of cash and then you get this big catchup trade in the russell 2000 names on balance its bullish for both i dont think we want to talk about these things as either or right at this moment very good point you make. Steph, do you agree with that and do you think that maybe you would get some money coming out of those big tech names of microsofts, apples, facebook, you know the ones im talking about, if rates continue to move higher if rates continue to move higher, thats a function of the economy im sorry, im getting some feedback. So if rates guys, im getting feedback well move it along john, ill ask you the same question me, too john, well try and work on the audio, guys. We apologize for that. This idea of rates now moving higher again, obviously from very low levels but if that moves continues, is there pressure on tech well, were on a roll right now. Thats clear rob, how about we try you. Maybe the price is right this time what do you think . Can you hear me okay, scott yup, i can hear you all right, great. So it depends on how you look at it is the answer we all know if you discount growth earnings at a higher rate, that that should have implications as it relates to pricing of those stocks. So there is a possibility that that happens i would say that these stocks have become such darlings, it is unlikely that investors completely abandon them this time because that is where youre seeing the did your ability and consistency of that growth absolutely josh brown was right. You had this situation where inve investors were massively caught offside. We were coming into september, october, historically difficult months before an election, an election that likely was going to be at least contentious and maybe disputed you had this second wave, you had a stalemate on stimulus. So we were comfortable maybe holding a little more cash than we would typically hold. And whats happened is markets seem to be pricing in a very benign outcome on those scenarios, viewing that were going to have election certainty, were unlikely to have another shutdown, the Economic Activity acceleration is real and the feds going to be cautious about rising rates i would be in the very short run a little nervous about being too seduced by that narrative, but in the intermediate term i think we know were going to have an election certainty, we know were going to have a vaccine or therapeutic. Its how widely distributed it will become and at what pace, but there are some positives on the horizon. And the main positive is you know that the fed is going to stay engaged and this stimulus is going to be here, one way or another, either early or late. I think those are catalyzers for the market in the short run im Comfortable Holding a little extra cash. Thats not that far from the view, steph, that david costin of Goldman Sachs puts forth, he thinks the markets are reflecting more certainty, more certainty in the outcome of the election and starting to price in a blue wave and a big stimulus package coming from the biden camp, and thats why rates are going up, in anticipation of much higher spending from even these levels rates are going up for two reasons, because of better Economic Growth and the recovery coming faster than expected. Weve talked about housing, auto and manufacturing at length over the last several months. Yesterday you get a great ism Service Numbers and employment and back log all going in the right direction and suggests growth and the jolts number today was better than expected as well youre definitely Getting Better growth mean youre starting to price in a Biden Victory or a blue wave, but youre probably pricing in stimulus, right . Does mnuchin and pelosi come to an agreement and we get more stimulus the sectors outperforming conform to a biden win clearly they are pricing in something here i still think theres plenty of uncertainty and thats why were going to kind of bobble around in the market. We dont have these answers yet so i wouldnt be surprised some volatility i want to embrace that and i want to buy cyclicals. Youre painting a fairly rosie picture of the economy, steph. Let me get to job lipton we do have breaking news on apple. You may have seen a flash on the bottom of our screen josh lipton fills us in right now. Josh apple just now giving out invitations here for its next big event. It reads high speed, please join us for a special apple event from apple park. Watch it online apple. Com october 13th at 10 a. M. Pacif. Pacific. We would expect tim cook to announce the new 5g enabled iphones. Some suggest four models we need details on pricing demand easily beating expectations in its most recent quarter. A lot of investors will ask questions about what will be the demand given the challenges of the pandemic and recession but apples next big event, october 13th starting at 10 a. M. Pacific. Back to you. Appreciate that, josh lipton. Gang a gang, were going to get back to our election conversation, economy conversation let keep the ball in the air, doc. Big position you have in apple we started our program with rising rates and impacting some of these big tech stocks it obviously had a great run, has apple, up more than 50 year to day however, it is 17 or so off of its high how does this event play into where the stock goes from here asking a guy who is long on the stock is like asking me if i had a bet on kansas city last night if i was rooting for them or if i was betting with my heart. I really think apple is going to continue to do well. I think the 5g is a game changer. I think that taking out logitec devices and sonos devices out of their online store kind of told you a lot about where theythin they are as far as that they think they dont need those peripherals. They think you can still buy them at best buy or amazon but taking them out of their store as they did today and both of those stocks trading down pretty hard, apple is going to do very well theyre virtually in a different position of everybody else with the exception of possibly microsoft as far as the amount of cash they generate and where they can borrow. Rates are going up we saw some big put. Es put purchases and theyve made some nice coin on those purchases and a lot of us think can you continue to see rates moving up, even though those contrary to what everybody said. They said it would be lower forever. I do think we will go back to lower, scott, but in the short term were going to see a pop out of rate and thats what that bet in november on those Interest Rates etfs told me. Josh, how much of the 5g is already in apple and the move that we saw . You have to believe that some of the move in the stock building up to this moment was because of 5g, right . Steve weis has talked about it all the time on this program, as is many people what do you think . Well, i think that many investors are aware of the opportunities that 5g creates but im not sure analysts have done a ton of changes to estimates based on how well they think the next phone will sell so i would argue that while theres broad awareness of how amazing a 5g future will be for the ecosystem, im not sure thats definitely in the stock and if it was, clearly a lot of that enthusiasm has already come out given the draw down that apple is in right now. So i wouldnt use that as a reason to not want to enter a position here. All right i want to get back to the conversation we were having. Steph, you know, as i went to you about this costa note, which is pretty provocative in terms of what the outcomes of the election could mean for your portfolios, which a lot of people care about, were four weeks to the day from election day and you did you were painting a very rosie scenario for the economy. I dont know if a lot of people agree with you on that, but thats what youre attributin attributing thats the whole point. Thats what youre attributing the move higher in rates to more than anything else both. Its both. I said its coming from both reasons, better economy and getting more certainty on the elections and more importantly it fiscal. I think fiscal, they got to get it done. You cant have 14 Million People unemployed, right . So theyre going to get it done, its a matter of timing. Is it Pelosi Mnuchin ahead of the election or is it biden if he wins and it doesnt even have to be a blue wave, you still have an interest of getting some sort of fiscal done. So these two things, when value and cyclicals start to work you see better growth and inflation starting to go up. By the way, inflation breakevens have resumed their upward cause its a big tell. Were not going to see rampant inflation and massive growth were going to see massive growth in the Third Quarter but then returns to 4, 5 but thats still pretty darn good rob sechan, how do we score this out here . Youve got the prospects of a big spending package, if it is a blue wave, the markets might be trying to price that in, versus what could be higher taxes, Capital Gains and corporate, and the prospect of fewer buybacks, which would be the result as well of higher taxes, lower earnings and would that be lower stock prices, too . And more regulation in that environment. I think heres what you have. You have higher taxes and more regulation taking a back seat to more stimulus right now. In addition you have the notion that theres likely to be a vaccine or treatment sometime in the intermediate term. You know, i dont want to get too off sides on this notion, though, because lets remember, on november 7th, 2016 the betting markets going into the next day, which was the election day, had Hillary Clinton at 89 chance to win and donald trump at 11 chance. So theres certainly a lot of surprise that can happen i think what the markets have liked is the certainty that comes from the notion of biden widening his lead. Okay theres still a lot that can happen with a month to go, and i think we could get back into this contested notion and that might be disruptive to markets, okay if im thinking about how to position portfolios right now, were overweight global stocks for sure because the risk trade for the long term is on, but we built some cash and we built some cash out of the areas that we felt were the most frothy, taking back a little bit of our gains in tech, moving in to some industrial exposure with the notion that in the intermediate term were going to see the cyclical pickup continue, which were already seeing in the numbers that steph talked about. Unless, josh, as you suggested on this show, that that pick up and cyclical stocks and value stocks is another false move, it only lasts for a very shore period of time, its what you look at through a stock like and it doesnt show any signs of slowing do you any twn soon i agree with what rob had to say, that balance between an uncertain election outcome, but the coming of a vaccine, which i think most people expect news on at some point before the end of this year, i actually think it will be earlier. So thats that push and pull and people are like, well, why is the stock market so close to alltime highs if everyones worried about the election because what theyre actually doing is the fear of all of that is taking place away from the stock market in the Options Market let take a look at the vix its over 28 the average level of the vix has been about 17. About 80 above the average of the vix the entirety of the Trump Presidency and even before then thats significant puts and calls out of the window of the money thats is where peoples fears about a contested election are taking place additionally, theres a lot of money in treasuries. Even though yields have risen somewhat, that money is going to stay there through the end of the year this contested election could go on through december. Dont forget, al gore didnt concede until december 13th or something. Does anyone want to say this version will be more benign than that one i dont. I think thats where the fear trade is happening its not happening in stock prices right now josh, forgive me. Ill come back to you i promise. I have breaking news with phil lebeau regarding the airlines. We just received a memo from American Airlines, the pilots union. The union is saying it will be postponing at least until december the beginning of 737 max Pilot Training now, at first blush this is one reason why shares of boeing are lower. The reality is that you have mainly a scheduling issue here and they want to make sure the plane is recertified, which many believe it will be by midnovember the fact that theyre pushing trainer from december to november, back to december, not huge in the eye of the pilots or in the eyes of American Airlines either the Pilot Training which was scheduled to begin in november for 737 max, the recertification of the max, once that is done, that Pilot Training has been pushed off to december we appreciate it, phil. Thanks for the update. Phil lebeau there for us steph, you own boeing. I do. Its not surprising at all i think whats more positive is the faa head just flew two rounds on the 737 max and had very positive things to say. We know its coming. Its a timing issue. This year is a writeoff anyways. Its all about the coming years and getting that plane up in the air. You have to have patience. I would be adding to it today if it goes a lot lower because i do think next year the setup is quite good josh, i want to come back to you on what we were talking about. You were making a point about what could be in store for election day i dont want to run over the point we were making as well about growth and stocks like crowd strike, which we were looking at and youve been making the point that it is poised for even more of a breakout so you can finish your point you were making earlier, please, but also get to the crowd strike issue for our viewers, if you dont mind. So crowd strike is emblematic of what i want to say. There are basically three mega trends right now this has not been a difficult sixmonth period in the stock market quite frankly what all three mega trends have in common is they were inevitable before the pandemic and they accelerated housing we talked about, they look unbelievable, stewart insuri insuran insurance, you cant close on a home without Title Insurance and home sales are up 20 year after year thats not going to stop crowd strike, can you not do this work if youre not protecting not only data but workloads. And crowd strike is in a tam thats potentially 1 trillion over the next five years so they are growing twice as fast according to Goldman Sachs, than all of their peers, which are also growing fast. The more stuff that moves digitally the more you require end Point Security and Network Security and crowd strike is crushing and the third megatrend is consumer facing businesses that have figured out how to move to digital and appbased. I own starbucks. 94 is the alltime high prepandem prepandemic. Starbucks is one of the companies that has an app that works literally like magic i can walk into a starbucks and to the even have to make e eye contact with someone, which is my dream if you know me these are the stocks that feed into the mega trends taking place right now and all the pandemic economy has done is accelerate those trends. There are winners everywhere within those three categories. But you could also everything you said could be absolutely true but you could still have bubble pockets, if you will, john, within areas of tech, even if the story is great and the story works, these stocks have gone up a lot. Some of these stocks are trading at sky high valuations ubs today takes on one of the issues of their five key questions for the last quarter of the year and asks the question is the tech bubble about to burst they dont even think tech is in a bubble at all. They say current valuations appear justified given expected Earnings Growth of 18 i dont know do you agree with that are you comfortable with where tech is trading as a group as a group, yes, i am, scott. And, you know, we just heard with josh lipton talking with twilio ceo and i think that many of these areas will continue to grow in 20212022 and on now, will they grow at the same pace, which is a different question, i dont think so i dont even think apple will grow at that same pace i dont really think very many of us do but holding on to gains of the sort that youve seen out of twilio or even out of if you want to stretch tech a little bit, over to roku, there are a lot of these stocks, scott, that continue to grow, even after covid is in the rear view mirror because weve embraced them, we like the tech and because theyve built basically nice moats for themselves i think the valuations are okay, and its still the area that i want to be in versus those value stocks so speaking of those value stocks, rob, the flip side of course of the stocks that have done everything, so to speak, are those that have done next to nothing. And those are the banks. So lets end this segment of our program discussing the banks because in the past five days, bank etfs are up more than 10 oneweek performance, the kbe 10. 5, the kre 11 , citi8, jpmorgan up 5, goldman and Morgan Stanley up 4 respectiv y respectively, 4. 5 and 4 for goldman and Morgan Stanley respectively do we belie