It is down 20 again. The s p is down 26. The nasdaq is thinking onto a onepoint game. Qualcomm is down 9 after a disappointing Fourth Quarter. There is a slowdown in smartphone demand. Expedia had bookings falling short of high expectations. And we are watching the yield. The 10 year is up 4. 19. It is starting to get back near those october highs, which Rick Santelli warned us about. Lets get back to mr. Santelli. It is the chatter today, rick . The chatter is that there are some issues. Whether it is how much the markets move. Consider this. The fed raised rates a quarter point on the 26th. On the 27th, we had the gdp much smarts stronger. It is virtually unchanged, but it moved about 30 points. The spread has gone from 100 to now under 70. This is huge. Many say, what is going on with the higher rates . Well, the biggest curve trade in history was the twos to tens spread. Now, youre looking at the other side of the mountain. If you look at tens, 4 1 4 on the 24th of october, high yield close, that is the whole thing. If you look at the 30s, it is 438 on the same session. Lets go talk to a traitor, shall we . Hi, jason. Hi, rick. It is good to see. There is so much to talk about. So little time. It looks like equity had a minor reversal today. What are you looking at going into tomorrows big july jobs report . It is quite impressive how well equity has held up today, with the cost of servicing the debt being a huge topic now, and fitch disagreeing and downgrading u. S. Debt, it has made it more expensive. The last time we saw the seven, we had a 5 selloff. This is pretty impressive that the stocks have held up, with tech being the sector that has done really well in the last couple of hours. If you are to pick a whisper number tomorrow, they are looking at 200,000ish. If youre looking at the jobs, they have come down a bit. What do you think for tomorrow and how could it move the markets . It is hard to see this market cooling down right now. I think the numbers are probably going to be impressive and jobs are going to keep being gained. The fed will have to make a decision based on the cost of servicing debt versus the drop economy. And that is all that anyone is talking about. Okay . People are saying fitch is wrong. Lets define gronk. In 2011, last time, there was a downgrade on the debt of the u. S. You know. 0 to 25. A quarter of 1 . Where are they now . 5. 25. Servicing debt is going to reach 1 trillion faster than any of us would like. That is not a good thing. Carl, back to you. Ill pick it up, rick. Thank you very much. Bond yields are rising. Jamie dimond and Warren Buffett say, dont worry about the fitch downgrade. Should we . Lets bring in kevin mott point may be the timing is weird. It feels like we are going to shine more light on the deficits and the debt situation. What is the investor application, do you think . I think the downgrade by fitch shouldnt have caught everybody by surprise. They were on negative watch for a long time. It followed suit with the downgrade by s p some 11 years ago. But it is now a split rating. Moody still has the u. S. At a aaa rating and a stable rating, as well. I think the implications on debt marketing are that great right now. Psychologically, it makes everyone start to question, how strong is this economy right now . If the fed continues to raise Interest Ratesin the face of it, not only will it make it cost more for the u. S. Government to service their debt, but what about the consumer that but 180 billion on their credit cards last year, that are now facing credit card Interest Rates of 21 . Each time they are raised by another 25 basis points. That makes the cost of servicing that that only go higher. The consumer now has to pay off Credit Card Debt as opposed to spend. Perhaps we will talk about recession again. I dont mean to strain the parallel here, but there is something that reminds me this year of 1987. Im not suggesting that there is going to be a crash in the market, but you had a market that was rising. You had Interest Rates that were rising. Eventually, the two collided. The market didnt like it. What you think of that as we head to the Fourth Quarter . There is day of reckoning coming for the economy, even by the feds projections, they believe gdp growth is going to come back to 1 . They are also forecasting the rate next year to come down to 4. 6 . The following year, the come down to 3. 4 . If im doing the math correctly, they are coming down 200 basis points. The fed doesnt cut the rate if the economy is doing well. This is an intended consequence of the rate hikes. If we know that rates are going to be lower for the next three years, that yields are going to be lower for the next three years and that inflation is going to come down, listen, no, you can start to see very attractive Investment Opportunities with that two year outlook. What am i buying . A couple areas that we like right now on the stock side of the equation are in the sectors of technology and also the sector of healthcare. Healthcare you can play through different ways. Largecap from cervical companies. They have grown their dividends at nearly 10 . You a smallcap pay, look at some of the smaller biotech names. Pick up activity there. When i look at technology, of course, the microsoft, the alphabet. How about Analog Devices . They had a fiveyear dip and a growth rate of 11 . They are in that allimportant chip space, focusing primarily on chip manufacturing in those areas. Those are different ways to play this slowing economy. Lower rates and the opportunities over the next few years. Now you have people worried. What if we dont have lower rates . We could show the dollar here, as well. The trading action the past couple of days, yet the dollar under pressure. Bond yields moving up. This feeling of almost, can we really absorb the issue . It will fund the deficit. And at what price . The fact that we have been funding it at 5 , of course Warren Buffett is happy to buy that. Who wouldnt by the 5 . Its a gift. The flipside of that is what it is doing to the deficit. I guess the real question here is, can we be so sure that we can go back to the old normal of lower rates and that happy environments . It is something a little bit more chronic. If we are patient, we can. We should remind investors of this diverse portfolio. If the dollar is under pressure, if it continues to weaken, if we cut rates and that brings down the value of it further of the u. S. Dollar, well, opportunities abound internationally in both developed markets and emerging markets. Maybe now is the time when you can diversify your portfolio into sectors Like Technology and healthcare with different rocket camps, such as the smaller cap. And to put it a different way, it is weird because he up to possibilities on Something Like this fitch downgrade happens. He could have the flight to safety. They can buy treasuries. They bid up the dollar. Or you can have the opposite. It is worth noting that we are seeing the opposite lately. The 30 years moving up, he says he is shorting it. Hes trying to time these things. We are not going to go there, but the reaction this week has been one that tells you not that we are benefiting from this, but it seems to be the opposite. I think if youre looking over the next few years, youll get the 30 year in the 10 year treasury, they are coming in anywhere between 25 and 50 basis points. That is it over the next few years. The shorter end of the curve, the fed funds are going to come down over 200 basis points. All of that movement will be taking place. So should i buy short duration bonds, short duration treasuries today . A twoyear treasury . I think if youre looking over the next two years, you want to be at the longer end of the curve. Yields are come down. It is going to impact the lower end of the curve, if you want to lock this in. That may be true. Do you think these yields are going away and this is the only time to get 5 , or i dont know where this is at. 480. You fast for the clock. Youre going to be at 280. You want to get it now. Those are even higher. The curve is inverted. But then you have the reinvestment. And where do you put that money into the market when yields are expected to be lower . You need to build a balanced portfolio. Municipal bonds is a great area right now because of the supply and demand that exists for municipal bonds. But the stock side of the equation, the next six months will be choppy. Next year is an election year. That will create untold levels of volatility. If we look over the next few years, when rates yield and it will be lower, i think the markets will be high. All right, kevin. Thank you very much. Coming up, the as have it. Two big tech earnings on deck. Apple reports its Third Quarter in a row of declining sales. Can turn demand around . Plus, amazon, retail usually takes up the bulk of the attention. Wall street is focusing on cloud this time around. We have a quick power check on the Positive Side of the s p. Clorox is up nearly 6 . Whiter whites, gaining, following positive results, Dxc Technology is down 30 . We will be right back. vo Verizon Small Business days are coming. From august 7th to the 13th. Now is the time to partner with our experts. Get started today with verizon business. Its your business. Its your verizon. Welcome back. Apple stock is up 15 . It is a strong run, yet iphone demand is expected to be weak once again when the Company Reports later this afternoon. Steve kovach is in cupertino, with a preview of what to expect from apple earnings. Hi, tyler. Revenues are expected to be down for the Third Straight quarter. It is up nearly 50 . Like you said, demand has been really tough on not just iphones, but all consumer gadgets throughout the industry this year. And the real question going into this Earnings Report is going to be whether or not we see some guidance from apple on the recovery in that demand. So we are also expecting some stories out of countries like india and indonesia, but not enough to make for those markets like china, which have had some very troubling Economic Data over the last few months, which is the opposite story of the united states. One thing im interested to hear from tim cook is any outlook or commentary from the strength of the u. S. Economy right now. And besides iphone sales which is the most important segment, but services is another thing to watch. We saw last week, meta and google reported a resurgence. Apple could benefit through their App Store Apps and things like gaming could also help with apple revenues. In the guidance that we are expecting to hear on the call, not formal guidance, but just some guideposts to get us through into this current quarter, morgan stanley, on the list, expecting a resurgence in group growth, which is an important part of this story as they hit this plateau. Steve, thank you very much. We will be waiting for your report later today. For more on apple, joining us now is krish sunjar. What kind of guidance can you give us. I guess we should not that this is their third fiscal quarter. It is usually historically their least favorable one. Hey, guys. Thank you for having me. A couple of things i would say. The june quarter is typically the slowest. Usually what happens in that june quarter, they have the iphones. They make up for the iphone that will launch in september. That is why seasonally, june is the weakest. We have the june quarter revenues down 2 yearover year. We are expecting september to be up here after your coming to those gym devils. Overall, the iphone has been healthy, despite the fact that smart phones have been lackluster this year. So the stock is up very strongly this year. We see 40 year after year. It has certainly slowed over the past month or so. What would you expect you have a 220 price tag on it. How would you expect it to react after todays report . That is a tough question. Im tried to figure out the next day reaction. Let me put it this way. One of the benefits that apple has had is going into this year, is the general view that we are going into recession and hard landing. People tend to gravitate towards safety stocks. Apple is one of them. They have a solid balance sheet. So i think those have been attractive. What has been added on top of that is the fact that many expected the iphone to start slowing because you see the weakness in the nonpremium smartphones, if you look at the chinese smartphones, it has not seen a recovery it. Apple is resilient. They came out pretty strong. That is added on top of the safety stock value of it. Everybody talks about ai. And nobody is doing anything about it. Now. Everyone talks about ai. Do you expect cook or anybody on the call today to talk about apple and ai . Or not . Im pretty sure it is going to come up and they are going to give an answer. I would say that it is more about the plans. Keep in mind, you know, the chips that apple designs, the letter a series and the letter m series have a neural engine built into it. They introduced some of the ai algorithmsin the chip that was launched in 2017 for iphones. So there are some ai capabilities built into some of these chips. The question is how much you want to extrapolate beyond that. This is a comedy that is largely driven by iphone sales. But that is not all they do. They have earbuds. They have ipads. They have macs. What about that side of it . People dont pay as much attention to that side of their business. Talk to us a little bit about that. Sure. You are right. The iphone has been the cash cow for the longest time. It has been remarkably resign. If you look at the hardware side of the business, you have the air pods and watches. I think it will be down this year. Last year was a very strong your bid this year, loosely, you have to factor in the metro. I think because of the hardware, this could come down. Last year, they had all of these other categories. This should still be pretty good. All right. Thank you very much but we appreciate your time today. We will be watching apples results later today. Thank you. But that is not on. Amazon also reports that the stock is up about 50 on the air. Theres a lot riding on the cloud business. Let me tell you why this is so important. It makes up less than 20 of amazons total revenue, but it is the revenue. It got advertising off the ground. Wall street is expecting growth of about 10 . That has come down significantly over the last few years. 6 4 ago, it was 40 . That has come down. If it is lower than 10 , it can fall into the mid single digits. That could create worries on wall street. It is not just the backdrop that is hurting this business. It is the profit engine of the comedy. Maybe there is something fundamental here like increased competition from the likes of microsoft and google. Another thing that we will be watching, investors will be watching is the spending. Remember that amazon spent all this money during the pandemic to essentially double its logistics footprint. Now, it has to spend on Cloud Infrastructure to allow its aws, its called customers to take advantage of this ai shift. That will be interesting. We will be on the lookout for that. The twin marks up, google, and meta, it was mentioned 37 times. We will see what happens on the amazon come. And lastly, i want to note how amazon has done. It has outperformed this year, but if you look at a 12 month basis, and even a five year basis, amazon has been the under performer. Investors have wanted to see that efficiency. That is going to be a focus at a time when spending might be going up. Back over to you. I thought it was a nice gauge of sentiment. It says something about the times, deirdre. Bank of america said the most asked about retailer that we are getting is not amazon. It was floor and the court. So either way. Yeah. Remember, their core business, it doesnt make nearly as much money and at a time, when investors are interested in profitability, that is aws. It is a much smaller business at this point. It is going ast, though. Thank you, krish sunjar one. Coming up ahead, a very important ip. The strike ridges on in hollywood. After the success of barbie, companies are looking for established ip. We will have more later. Tech check is powered by comcast business. Choose any car in the aisle. And manage your rental right from the app. So you can mix work. With leisure. Or leisure. With work. Giving you the control to find the perfect balance. Go national. Go like a pro. The biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. It still does. What can you do with spy . The first time your sales reached 100k with godaddy was also the first time your profits left you speechless. At the counter or on the go, save 20 with the lowest transaction fees and keep more of what you make. Start saving today at godaddy. Com welcome back to power lunch. The Energy Stocks are leading the s p. Everything run is happening. Rates are higher. Oil is higher. The dollar is weaker. What is going on . Remember, the Saudi Energy Minister called this the lollipop back in june when they first introduced it, saying it is the market sweetener. Russia extends its export cut, although that is tapering down a little bit. I think what is really interesting here is that the market was anticipating that saudi arabia would extend this cut, but they also said that they could extend it even further, or extend it and deepen it. So once again, showing that for the first time, they are really taking matters into their hands. This is from opec. This is saudi arabia acting on its own and saying we want to put a floor on the soil prices. That is moving. One other stuff to watch is son run. It was heavily shorted into earnings. I dont think that there is optimism about the solar market. There q3 guidance was muted. They didnt give any big projections for growth this year, but they did say that their Battery Storage attachment rates are growing. That is positive. That is highermargin for them. They introduced cash targets for the first time. I think it is more specific it is Company Specific rather than for them as a whole. It is for homeowners. You have solar and storage. California changed their Net Energy Meter<