That is the new high going back to august 27th, now settling back to 4. 76. Rick santelli is here with the latest on yields for us. We will dig into what todays report is really telling us about the economy and the fed and biomet is tracking the Housing Market. Before we dig into that, lets look at todays market action. This is quite a turnaround. The s p is at 42. 97, up 39 points. At one point today, post jobs number and everything else, we were actually down 39 points. We got as high is up 47 on the day at one point today. That is how big of a swing it was. We took out yesterdays lows and at the highs, we take out yesterdays highs. That is how big of a swing it has been so a lot of people watching this turnaround say what could it all mean, that is a conversation were going to have later on in the show. The dow is up 246 points. The nasdaq, up nearly 1 1 4 , 160 points for the nasdaq composite of. As for this week in review, all morning, we have been saying we are on the precipice of the fifth straight week in declines for the s p 500. With this reversal, we could be positive and snap that streak. That remains to be seen. But, where it comes to the underperformers, believe it or not, in this rising rate environment over the course of the last several weeks now, it has been technology and Communication Services that have led the way higher. Meanwhile, the biggest declines are no surprises given the following fuel prices is the energy sector, so that is your state of play on the sector side for this week. As for the stocks, the best performers in the s p 500 and what was shaping up to be a down week, check out the names when it comes to markets, exchanges and trading. The best performing stock in the s p over the last week, Market Access holdings. They do an online bond trading platform. In the cmd group and see in the global markets, futures and options trading. This volatility right now is leading to some really nice gains. Thank you for connecting those dots because imlooking in going this is kind of muted, stocks are not doing that good but it is bond striving all of this, isnt it . Maybe even commodities. And rates trades. A lot of people try to take positions, speculate on for the future direction is going to be. That helps explain it. Over to rick now can help explain what striving all this interest many are questioning todays reversal in yields. We see that we spiked up to nearly 4. 90 and we did have strongjobs. This is the best since januarys 472, thats the best of the year. Slow wages seem to be what the market concentrated on but remember at 4. 78 we are up 21 and tens. If you look at 505, 506 and the two year its only up a handful of basis points. If you look at what happened on wednesday, here is what technicians would tell you. We ran out of gas just shy of 4. 90. Today after the number, very similar and when they reassess some of the weaker details, 3. 8 of 4. 90. Today after the number, very similar and when they reassess some of the weaker details, 3. 82 weeks in a row, that some of the highest unemployment weight rate, lowest since february 22. If you look at 4. 2 on yearover year Hourly Earnings, lowest since january of 21. I think that failure is a temporary issue. I would look at it to have long term significance but i think it is important, especially considering the reversal, dont underestimate uturns on a friday afternoon and one other thing down talked about. When you have higher highs and lower lows on a guns hot day in equities, if we get a close that is higher or a close that is lower it becomes an outsized day with prioritize technical significance. Just to be clear, that significant points to yields having peaked now . I would think what that means to me is were going to consolidate going into the closing hour most likely near 4 3 4 but it doesnt change the big picture. Long maturities are still hot and anybody more worried about funds, should definitely pay much more attention to the long and as it aims toward 5 and beyond. Thank you very much. And here is a recap of that jobs report. Nonfarm payrolls of 336 and here is a recap of that jobs report. Nonfarm payrolls of 336,000 in september. Unemployment rate at 3. 8 . Average Hourly Earnings only went up to tents. The employment for july it was revised higher. Will all this force the feds to hike again in september . November . My next guests i know. Diane. I think this was a great jobs number, and im glad to be wrong this time. I think steve did the calculation. I got a d, you know its okay to get a d and have the economy do much stronger i will take it after doing well on the jobs reportbefore and revisions on the other side. The important thing is first of all that 3. 8 Unemployment Rate. Its not because we had more layoffs. We actually had fewer layoffs during the month and we are absorbing the new workers coming into the labor force. Much of the increasing participation is this quirky thing with teenagers that is hard to capture in august and september. That said, this is a great number overall. 95 of the job gains in two sectors that had been lagging, leisure and hospitality, and healthcare healthcare was very late to reach a previous peak. We finally recaptured the previous beacon restaurant hires, and that matches up with new business formation has positive from online retailers coming out of the pandemic to know Food Services and construction, coming out of urban areas going into suburban areas that is going overall employment, so you are seeing what should have been the hardest mile for the marathon for the fed has become a relay race were now you see sectors that were lagging, including the government sector picking up. , i thought that was quite striking. Several people have highlighted this saying this is a report very much driven by non cyclical parts of the economy, by education, by healthcare, and does that change kind of our conclusions about whats going on with the Business Cycle . I dont think so. There were definitely some quirks in there and we saw this coming. Diane, i dont grade you. I grade myself poorly. I wish there was something i could go back and see, i missed this, i miss that, that there was some kind of indication of a strong number coming. I think the claims number spoke to an even type of jobs report. The homebased type of data was a bit stronger. That was something to Pay Attention to, so im going over my work, too, so im not grading you on this. Kelly, i do think the revisions hire if this were one strong outline number, and they had not revise the prior too much higher, i would say take this with a big grain of salt. Obviously any number with a grain of salt but the idea that the three month average of job growth which at eight growth which at 8. 29 this morning, you have to think the economy is doing better than we thought. You have to think that the job market is not as soft as the fed hoped it would be, and then after you say those things, you have to wonder how much concern is the fed going to have that they are not getting the softening in the job market . In which case, you say okay. Maybe they will be satisfied with the idea that wages are not going up strongly, but i dont know if that is the case. I think theyre going to be looking at that last rate hike of the year is a real possibility but watching what is happening with the 10 year to say you know what, maybe we dont have to do it if the Inflation Numbers are maintained. What would the strike effect be in ll of this . Uaw i think we were waiting until the next one to see this and that kaiser healthcare workers strike looks like it may broaden from three days to another 10 days as they move into the weekend. Any impact from that yet . Not from the kaiser strike yet, and the uaw strike will show up in the october report as long as it continues into next week. We did see this break effect of the writers and sag strike. That broadened and is also were some of the weakness and wages were. But, in the broader context, steve is right in that this is where i dont think the fed is going to do another rate hike because the bond market, as of yesterday, basically we have the equivalent of another rate hike in there from the bond market and as long as the bond market stays buoyant, those bond yields will do a lot of the heavy lifting for the fed, but that does not change the feds even higher for longer, and the second half of the year, we are taking rate cuts out of next year, and we delayed when the fed is actually going to cut rates and i think that is important because that is where the fed is at right now and that is what this data tells you. A stronger economy, even as inflation is cooling, they dont want to risk backtracking on losing ground on the inflation improvements weve seen, but on the flipside of it, they also dont want the stronger economy justifies higher rates and i think that is something lost in translation. Also, the fed is thinking about the noninflationary rate is now moving up on the other side of this, as well. Could you all at home right this down so we dont have to repeat it . I really hate having to do this, but striking workers do not appear in the household survey, so there will be no impact on the Unemployment Rate because they are employed, but not at work. They will show up in the employment survey, the payroll side of things, because they are not employed. They will not show up in claims, because they voluntarily left their work, so that is what is going to happen. You wont see it in the claims numbers are the household numbers. You will see it next month in the payroll numbers. Thats helpful, steve. Parts suppliers and things like that will start to show up. You will see some impact, i believe. The manufacturing numbers have been very strong, but you have the last two months, very good manufacturing numbers after a lousy july, but it should be getting to show up there. A lot of that is people simply losing their job so that will not be a complication. Just to try to poke one more hole in this, i just want to bounce this off both of you, we have known that because of the pandemic the seasonal adjustments are little quirky, especially around teachers going back in september and the fact that education and healthcare have been so strong, is there any chance this all gets revised, even the strength in claims the last four weeks ago or so. Do you think theres anything fluky going on with that . Im surprised we are getting as much but it was mostly in state rather than local education, and thats colleges, so i do think it is probably real. There is the not seasonally adjusted teenage Participation Rate fell in august and september and we dont know that seasonal adjustments are right, so these are quirky data. Usually the august number is a cooler number and gets revised revised up and this year prove that true. I think it is important. Also, this uaw strike is very different than the strikes we had in the past. They have been very careful we counted up so far 2600 Collateral Damage workers in terms of people who are furloughed as a result of the strike. It has not had the kind of spillover effects that weve seen in strikes if youre watching that closely. Morgan stanley just said the cumulative effect is going to be 0. 1 on usedcar inflation, so not a big number there but can i ask, diane, more people working, hours worked about the same. Do you pencil and higher gdp from todays numbers . First of all, the Third Quarter is over 5 right now. Its the strongest quarter. Its strong, yeah. And even the momentum into the Fourth Quarter now is still solid, and this was a year taylor swift, beyonciâ– you name it, all of that. Taylors not touring anymore, diane. I know, but the important point here is that we still have plenty of momentum and we need to cushion that in savings. Those benchmark revisions over double the excess savings for mastering the pandemic so we have more savings that we didnt know we had and that is really going to help us, as his student loan payments coming due. Im not worried about the headwind i thought that was going to be. Did you think you were going to have to talk about taylor swift when you are covering economics over the journal . She is in the movie theaters now, so we have a few more months of taylor economics. Always appreciated. Thank you so much, talking about the full impact of this jobs report. Lets turn to the impact on the mortgage market. Mortgage rates have climbed again today. Lets get to diana. She can run us through the numbers. Mortgage rates usually follow the yield on the 10 year treasury so no surprise it is starting to get ugly. The average moved higher to 7. 48 , up more than half a percentage point and one week and nearly a percentage point from the start of september, not great news from for homebuilders who really had to struggle to get out of the red this morning. To get a picture of just how much affordability has been crushed if youre buying a 400,000 home today and put 20 down on a 30 year fixed you are paying roughly 965 more per month than you would have just two years ago when rates were around 3 in that does not even factor in that the same house is now 17 more expensive than it was two years ago before the feds started raising rates and 40 more expensive than the start of the pandemic. We are hearing theres a little bump in supply coming on the market now, that it is unlikely to be enough to counter the higher costs. We will see, though, if these higher rates start to take the heat out of home prices. Quickly, it must drive you crazy on the Mortgage Rates, where are these numbers drawing from . Why 7. 84 . Mortgage news daily runs the numbers every morning by about noon time. What we get on freddie mac and nbas weekly averages and on freddie mac it is from last week, or the days before wednesday and nba is the week before, so they are lagging. We are lucky enough to have these daily. Stick around. I want to talk to matthew graham, as well, now. He says it is no longer just about the fed here, everybody. Mortgage rates are at the whim of other events, as well. Matthew, its great to have you on the program. Welcome. Great to be here. Thank you. And we should emphasize this is not always true. They are affected by tons of other global events but especially so right now. You, and just a minor point of order, they dont necessarily price off the tenure. They correlate highly with the tenure overtime but they actually price off of securities, which are very closely related to the 10 year in general but we have somes distinct differences since the fed started not buying bonds. Another chance what i have been talking to you i and diane up now there are efforts making the rounds saying maybe fannie and freddie need to do something your to bring down the cost of Mortgage Rates in particular. What could be done by the marketplace to try to cushion what otherwise has been a Mortgage Rate highly tailored to what is happening with bond deals . Yes, this is a frustrating thing in my audience specifically doesnt like to hear what i have to say about this but nothing is going to be done at any level to try to ease the pain of rates. The Housing Market has been central to the inflation problem we have. We can talk about affordability being rough for new buyers and that is very true, but at the same time, we have to consider what happened in 2020 through the middle of 2022 with people who are able to refinance that 2. 53 rate and free up a ton of cash flow that has subsequently driven inflation, and that has resulted in a cranky your Federal Reserve and rates moving higher, so i dont think youre going to see a lot of love on an official level weather that is from fannie, freddie or the family itself. Diana, do you agree . Because housing is the one place where officials really want to come into the rescue and weve seen a lot of efforts over the last couple of decades. Affordability is worse now than its ever been. I tell you what. I get dozens of emails in my inbox every day from various government organizations saying the government has to do something, we have to get affordability back. I cant tell you how much realtors are getting hammered by this and how Real Estate Agents are fleeing their jobs right now because they have nothing to sell, but i think matt makes a great point, and that is that so much inflation right now is driven by housing in we are seeing that still in the rents but home prices up 40 is astonishing in just three years, so i agree that i dont think anybody at the government level will do anything to bring back those rates to a point where home prices can climb higher and higher. The question is, what can you do on the lower down payment, on the fha side, on some kind of programs to help people afford housing without bringing rates down to these abnormally low levels. I mean, 2. 75 is really just going to create a market thats going to be on fire. Youre never going to be able to put that out. The argument was from dave stevens, briefly obamas fha commissioner and he says fannie and freddie should return to the nbs market. We are going into an election year, and maybe somebodys going to look at this and say yes, maybe they should because the spread between Mortgage Rates is wider than its historically been in the fed does not look like its coming back into the mark market anytime soon. Yeah, its not coming back into the market because it realizes it has accidentally, maybe unavoidably, played a role in driving inflation in 2021 purchases, so i think even recent fed comments have said the Housing Market is doing kind of what we wanted to do, and thats unfortunate. The fed might say that and they can say that and try to understand the macro effect but you dont think the political side of this in washington with the Housing Market into the election year, somebody might say you know what then, fannie and freddie, you go buy nbs and bring that rate down. I think diana nailed that point in there can be a push for initiatives that affect affordability without trying to manipulate the broader Financial Market and that is really the ill effects of fiscal stimulus, and especially relentless to eat in 2021, so that is right on. If we have tohelp affordability, it has to be at a fiscal level. Thank you both. Really appreciate it. Historic moment here for housing and mortgages. Still to come, exxon mobil nearing a deal to buy pioneer natural resources. Our next guest says it makes complete sense, and this could be the first in a massive consolidation way for energy. Plus, the Airline Index hovering at its lowest level in a year. Will look at the headwinds facing the group as earnings season kicks off next week. As we had to break, the dow is up 300 points, nearly 1 right now. Nasdaq leading the way with 1. 5 . Even the russells are up 1 today with the 10 year yield reversing back over. 480. We are back after this. Your record label is taking off. But so is your sound engineer. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire im so glad we did this. Im so glad we did this. Im so glad we did this. Life is for living. Lets partner for all of it. Im so glad we did this. Edward jones heres why you should switch im so glad we did this. From chrome to duckduckgo. Duckduckgo is a browser you download to your mobile and desktop devices. Unlike chrome, the duckduckgo browser has privacy builtin. It comes with a private alternative to google search, which doesnâ– t spy on your searches, and it blocks cookies and creepy ads. And theres no catch. Its free. We make money from ads, but they dont follow you around. Join the millions of people taking back their privacy by downloading duckduckgo on mobile and desktop today. Welcome back to the exchange. Shares of pioneer surging today as exxon mobil is reportedly closing in on a deal to buy the merger for 60 billion. My next guest is all for it, and hopes it is the first of many more big deals to come. Joining me now is bill smead, chief Investment Officer at smead Capital Management. Sometimes i feel like a person such as yourself would come on and get mad and say you know, making deals destroy value in the long run. You are totally on the opposite side of this. You love it, and just talk to us about why. , i was in europe for one week two weeks ago reporting what we do, and in europe, they are so antioil and gas and fossil fuels, and that attitude has caused a deeply outof favor position for this industry despite the need we will have for the next 30 or 40 years, whether it be to produce gasoline, or whether it is to produce electricity, so people are at a line, and the situation is the great Big Companies have provided liquidity to the largest investors. Therefore they traded very high multiples in relation to the small or large companies, and the larger the smallest Largecap Companies in the industry, so if you build out there and poke holes in the ground youre going to have every environmentalist and esg person in the world condemning you whereas if you acquire a company that already has production you are avoiding that grief. The, you are going into lena kinds crosshairs. At some point she sat up and says wait a minute. If there is more to come, when they get involved . I heard sarah eisen say that. I was watching the show this morning. I was watching this morning and i heard her say that and i thought to myself, are you kidding me . I mean, the federal government has made this industry a nightmare, and the body politic has made this a nightmare. You know, there is no monopoly. They are trying to convince people that you are going to switch to all electric vehicles and there will be no need for gasoline. Why would you care what somebody in this industry does . Theyre all expecting the industry today. Well, there is senator Sheldon Whitehouse who has slammed the prospective deal between exxon pioneer and an email statement circulated friday saying xl has a big pile of cash it made by gouging consumers. Now they are looking to use that money to double down on push polluting the planet, pushing more cost and dangers on consumers so there is your reason for the administration to pick it up. Yeah, and that is like a person of addicted to cigarettes mad at Phillip Morris for raising the price from . 20 to five dollars from 1970 to 2010. In other words, they are creating the problem. The people that are criticizing this are the ones that have created the problem. They are restricting the supply of the commodity, and only going to drive the Prices Higher as time goes forward, so that is the height of hypocrisy right there. But thats politics. My point is good day youre right. The fact they have a statement to me is the first sign that maybe they would get involved because the exxondans very deal i dont think there was any pushback and is an overall going to raise Oil Production or lower it . What are the numbers there . All this does is extend the productivity of the property owned by exxon so that they can provide the fossil fuels that people need. They are attempting to make their company longer lives in an investment and body politic market that wants to shorten the life of the industry. They are trying to keep themselves alive and provide the customers what they need. 40 of electricity is produced by natural gas in the United States of america. Coalfired is 19. 5, and will probably be zero in 10 years, so where are you going to get the electricity . We are not going to there is no wind and solar miracle its going to replace that. If this does happen, and the deal has been rumored before, so who knows, but there are also so many interesting things to say about pioneer. But also, i want to briefly talk to you about the jobs report and whether you think it is a mirage, or whether the economy strength is more you know, longlasting, and why you are not going to be on you about the homebuilders again because more people are starting to bail on them. Well, we have said for years first of all, there are 40 more millenniums than there were in the prior generation. They were slow to get started. Theyre going now. More people got married last year than this year, then any year in the last 10 years and theyre going to form the household regardless of whether houses are unaffordable or not, so it is necessity spending. They used to do to session discretionary spending. We had a lousy economy in the 2010s because the largest Spending Group was only buying burritos and beer, and lulu lemon went to tuscany to ruin their age 55 vacations. So here we are. They are causing a stronger economy, which we predicted. We have said this all along, that they would, and that causes grief for the affordability but i think in the prior show, they said something about record and affordability. No. I paid 13. 5 for my First Mortgage in 1983. Yeah, but the home price is like 70,000. Now they have to pay 8 with a home price of 480,000. I understand, but the incomes are also up in that same kind of multiple. What people spend on gasoline, and what they spend on mortgages as a percentage of what they are doing, it is affected right now by a lack of supply, and we own the companies are going to solve that supply dilemma but again, its going to take five to 10 years to solve that dilemma and will have to sit through and the last piece, as you said, there is no work from home and that seems to be the last puzzle piece. There you go. That takes gasoline to get them to work right now. Ilsmd wi s bl eathmead Capital Management bringing it full circle. I appreciate your time. Interesting to see if that deal goes through. Coming up, higher rates are wreaking havoc on insurance premiums across the country. Believe it or not, some payments are now even higher than their mortgages. Had on the exchange. Im an investor in a fund that helps advance innovative sports tech like this Smart Fitness mirror. Im also mr. Leg day. 1989 anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq100 innovations. I go through a lot of pants. Before investing carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com. The first time you made a sale online with godaddy 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 new projects means new project managers. You need to hire. I need indeed. Indeed you do. When you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. Visit indeed. Com hire and get started today. all toooo youuuuu w sean esumes on indeed mi wish for the amazing. New iphone 15 pro jason sean do you mean this one the one with titanium . sean no way i can trade this busted up thing for one. jason maybe stealing wishes from the birthday boy is not your best plan switch to verizon and trade in any iphone and get the new iphone 15 pro on them. sean what . jason yup, and on an Amazing Network sean and i dont have to ruin anymore birthday parties jason yeah, that ship has sailed. Lets go get you the iphone. Here we go, come on hon. vo trade in any iphone in any condition for a new iphone 15 pro on us. Only on verizon. Good afternoon and welcome to our cnbc news update. The largest u. S. Health strike in history is on its third and final day but an agreement has not been reached. Picketers spanned four states including kaiser healthcare workers from a coalition of unions, the strike plan to end monday morning but they could launch another rhonda strikes in november. The Iowa Democratic party will hold its caucus on january 15th the said it will not release results until super tuesday in march. It still needs approval from the National Committee is iowa tries to retain its role as the first state on the president ial nominating calendar. The civil front tile fraud trial against former President Trump is done but former cfo Allen Weisselberg is scheduled to take the std. Ancoming up, city is slashi its estimates for the big four Airline Carriers right is earnings season is about to kick off. The analyst behind that call joins us to explain next on the exchange. 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. In the u. S. We see millions of Cyber Threats each year. That rate is increasing as more and more businesses move to the cloud. So, the question is. Cyber attack as cyber criminals expand their toolkit, we must expand as well. We need to rethink. Next level moments, need the next level network. [speaker continues in the background] the network with 24 7 builtin security. Chip . At t business. Icy hot. Ice works fast. Heat makes it last. Feel the power of contrast therapy. So you can rise from pain. Icy hot. This is american infrastructure, a prime target for cyberattacks. But the same aipowered security that protects all of google also defends these services for everyone who lives here. Welcome back. Its been a rough few months for the airlines with the travel season coming to a close and fuel prices on the rise. United and southwest down 20 in the Third Quarter with american leading muslim must slump down nearly 30 . Joining me now is stephen trent, managing director at citi covering the sector. I remember deltas 16 day winning streak early in the spring. These stocks turn around on a dime. Now, it is the other way, coming down. What makes you think this is not necessarily a buying opportunity . I think within the space we are seeing some bifurcation where u. S. Domestic does look a little choppy or. Would you have . s about what should happen to the economy and whether or not the group can sustain demand. On the opposite end of the spectrum, International Long haul is doing well right now. Transatlantic and transpacific, the numbers look great. So, i think when we think about this interplay between revenue and expense, you do have some push to cut expense. It is fine to have a later cart, but a lighter cart is useless if you dont have a horse to pull it, so we are seeing the best horsepower right now on the longhaul side. And this is where i would think delta, united, those kinds of more internationally geared carriers versus some of the domestics is that kind of a strategy recommend people have with the airlines for the next three to six months or so . Absolutely. International longhaul is doing great. If you are a Network Carrier today and you have good transatlantic and transpacific metal, thats going to give you some nice tailwind. At the same time that is happening, i think the Network Carriers are also benefiting from this spooling up of their revenue. While all that has happened we have seen a shift since the pandemic started. Most people are only in the office three days a week. That has changed the way people travel and purchase tickets, and has supported economy plus, so if you are a lowcost carrier and you dont have economy plus, that puts you in a tougher spot, so we do like those Network Carriers with the notion that American Airlines is heavily levered. So, there are two kinds of things to ask right now and maybe the most important one is leverage. The other piece of this has been the credit card business as a huge driver of revenues, if not earnings for some of these carriers, and is that sustainable . I think on the cobra and the cards and, that does look like it has legs, so it would be disingenuous of me to say there is no risk from everything going on, but when we think about what is happening today, what is probably going to occur next year relative to what this all looked like prepandemic, and those Network Carriers have really gone a long way, we would argue, in derisking their earnings stream. For example, if one looks at pretax margins for the Network Carriers today versus 2019, and compares that to how the discount carriers performed then versus now, they have essentially flipped. Partially on the cobra and the card side, partially because Network Carriers have momentum now and those Network Airlines that have managed to not get too deep into leverage, we think are very well positioned. United airlines would be a good example. Some of the airlines so my credit card businesses, but lastly, on the Balance Sheet issue, a company like united, what are the potential earnings squeeze it could face from higher rates . There is some differentiation in the group with respect to the extent to which they have fixedrate debt versus floatingrate debt. You can have some nuances there, and then from an economic perspective, of course. Certainly there is a chance for 10 pacific, transatlantic giving them up is so is that revenue slows down then we need to start thinking about how well they are managed and i think across the group it is been an interesting challenge between supply changed chain challenges and cost, so those are factors that could affect the ability to deal with Financial Leverage beyond what is happening with Interest Rates. Listen, they are all going to be a bailout because passengers are 5 lighter thanks to ozempic. Thats a report we saw yesterday thanks to a colleague of yours. I did not see that, but will let them defend that thesis. Steve, thanks for your time today. We appreciate you coming in. Coming up, rising rates helping insurers, investment portfolios. This name up 30 since january and named a top pick by katie w. We will reveal it next. It has been a rough rate for utilities. Utilities. The exchanges back after this. You founded your Kayak Company because you love the ocean not spreadsheets. You need to hire. I need indeed. Yoindeou do. Hire. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire captivating music the first law of thermodynamics states that energy cannot be created or destroyed. but it can be passed on to the next generation. welcome back to the exchange. Higher rates are giving insurers a boost. Insurance etf up 8 and arch capital is one of the top performers year to date, up more than 30 as rates continue to climb. Contessa brewer is here with how long some of the runs could last. Why cant premiums come down if they are raking in all this money . That has to do with two things. It has to do with inflation and it has to do with the intensity and severity of catastrophes. Higher Interest Rates translate generally to higher return on equity for insurers because they focus on fixed income investments. March is former ceo has said for everyone percentage point of yield, propertycasualty insurers see 4 improvement in combined ratio. Analyst mayoral mayor shields told me his pixar between casualty insurers because they have more times between collecting premiums and payouts and claims. S ski heappoints to renaissance along with aig and chubb. Life insurers have an even longer lag time, or what they call tail in the industry. Investors have been pouring into their product lines, their annuities. Last year the record for Annuity Sales alexis fixed Annuity Sales still climbing. Life insurers are beginning to see a two investments. Analyst top picks, core bridge, it sells a lot of fixed annuitieses. Unum which sees improvement in its legacy Long Term Insurance line. And are you ready for this, apollo because it gets 50 of its proceeds from fixed annuities. And they are concerned that higher ratings may lead to a more volatile credit cycle. Corporate bonds are their biggest investment and they are concerned about snowballing defaults. So commercial Mortgage Investments are a particular worry as developers face new borrowing costs and skyrocketing costs for insurance. Wow, that is fascinating about apollo. Maybe at some point down the road it could help translate into some pressure off the consumer. Contessa, thank you very much. Still to come, one investor seeing big opportunities in the muni market and bonds backed by banks rather than government agencies. Details next. Municipal bonds dont usually get the Media Coverage the stock market does. In fact, most people dont find them all that exciting. But, if youre looking for the potential for consistent income thats federally taxfree, now is an excellent time to consider Municipal Bonds from hennion walsh. If you have at least 10,000 dollars to invest, call and talk with one of our bond specialists at 18003764376. Well send you our exclusive bond guide free. With details about how bonds can be an important part of your portfolio. Hennion walsh has specialized in fixed income and Growth Solutions for 30 years and offers highquality Municipal Bonds from across the country. They provide the potential for regular income, are federally taxfree, and have historically low risk. Call today to request your free bond guide. 18003764376 thats 18003764376. Municipal bonds dont usually get the Media Coverage the stock market does. In fact, most people dont find them all that exciting. But, if youre looking for the potential for consistent income thats federally taxfree, now is an excellent time to consider Municipal Bonds from hennion walsh. If you have at least 10,000 dollars to invest, call and talk with one of our bond specialists at 18002173217. Well send you our exclusive bond guide, free. With details about how bonds can be an important part of your portfolio. Hennion walsh has specialized in fixed income and Growth Solutions for 30 years, and offers highquality Municipal Bonds from across the country. They provide the potential for regular income. Are federally taxfree. And have historically low risk. Call today to request your free bond guide. 18002173217. Thats 18002173217. Welcome back. Ishares etf hitting its lowest level since the pandemic. The tax free yield as of wednesday just under 4 , but its tax equivalent is currently seeing a return of over 6. 5 . Joining us with where to find opportunity in munis is western assets. Rob, good to have you here. The pleasure is mine. Thank you. It is kind of this odd moment for munis which are getting more attention than ever because of some of the yields on offer. But at the same time, when they are marks to market, losses amid higher rates must leave people feeling uncomfortable. Absolutely. And were seeing a lot of investors hiding in cash because cash looks at ttractive and the is an averse to adding rate risks to your portfolio given the devastation in 2022 and the last handful of months. But there are plenty of opportunities to move out of cash into even short duration securities and pick up a sizable amount of income in todays marketplace. Not just from a nominal level, but even on an inflation adjusted basis. Some of the concerns about inflation and where it is and where it is heading, the view even where inflation is today, and it is much above where the fed wants if to be, the nominal levels are looking very attractive. So i think one of the this inks that muni investors must be frustrated by, and maybe they are, maybe they are not, but they might have thought six months ago, hey, i just got an amazing yield on this five year lets call it, im assuming people hold to maturity, but they might think i got this amazing yield. And now they are kicking themselves. So, you know, what is that how is that dynamic playing out . So the dynamics are different in todays marketplace. First level of rates are higher. So that is why as you point out they are kicking themselves because had they been a bit more patient, they could have bought into higher rates. But i think more importantly inflation continues to down shift. So folks who bought fixed income a year ago and kicking themselves today, level of rates are higher, but on inflation adjusted basis as inflation continues to recede, it is more attractive today and frankly, you just havent seen this level of rates and this inflation adjusted rates more specifically for the last 15 years. So those are the different dynamics in todays market. And some of the tactical things. It gets real specific real quickly, so you are talking about short duration gas prepaid bonds. If you thought munis werent so he sophisticated, there are some real opportunities. And there is one of the cheapest sectors. And part of that is the supply constrains is not true in the grass pea pay. We just see continued amount of supply hitting the marketplace. With that, you could pick up spreads for a and even aa financial organizations. That look extremely attractive in all parts of the curve, but especially in the front part. You are talking 4. 5 , 5 yields for durations that are less than five years. So you are not going to see that. We think as soon as the technicals tighten up, you wont see those levels for very long. Prepaid gas bonds which agencies use to purchase long term supplies of natural gas. Every day i learn something. Rob, thank you for your time today. And that does it for us today. Shares of the big three automakers are all higher ahead of uaw president shawn fains update on negotiations. Well get that in a few minutes. Power lunch is taking it live. Ill join tyler on the other side of the break. When you think of investment risk, do you consider climate risk . Changing weather patterns are impacting the way we live and the value of businesses large and small. This can mean disruption to supply chains, changing demand for products and shifting regulation. What does this mean for your business, your clients, and your investments . Ice offers data and markets that can provide critical insight. Manage your climate risk with ice. Every day, businesses everywhere are asking 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. Welcome to power lunch. Along side kelly evans, im tyler mathisen. Two major events were looking for. First a major rocket launch about to happen at any moment. This is amazons first deployment of internet satellites to take on spacexs starlink. Plus president of the uaw shawn fain speaking shortly giving an update to his members on facebook live. Well give you those comments such as that they are news worthy once we have them. And already a pretty wild day for the dow, currently up 333 points, near session highs after the big jobs report that was at 8 30 this morning. Initially sending a shock down investors spines as it defied expectations shoorsoaring by 33, fueling concerns to more fed rate hikes. But bond yields reversed lower and stocks are near as i said session highs. Nasdaq up 1. 5 . Lets bring in