It boils down to a simple question, are we set up for a yearend rally or not . I think thats what our viewers want to know more than anything else. I think its possibly. A tug of war between high Interest Rates, geopolitical tensions, valuations that are high, and an economy thats strong, earnings are delivering and a consumer thats remaining resilient. I certainly think thats a possible outcome. Lets remember, if we rallied back to those july highs valuation becomes an issue again especially if its driven by the stocks that the magnificent 7 and rates have stayed higher, you have those same tensions at that point. When we look over the last two years, scott, markets havent gone anywhere, since june, markets havent gone anywhere, but were seeing a loft opportunity you underneath the surface because of the narrowest of these stocks, so i think the answer is yes, you have to be a lot more selective. 11 of the s p 500 reporting this year, netflix and tesla, those are critical. Yields are up a little today. The tug of war exists between the bulls and the bears on the yield front in some respects, yes, were up a little bit today. But theres at least according to the bulls of this the pivot, the bear case they dont care about this alleged fed pivot or not. Theyre like, yields are still going to remain high and the lag effects of tightening are yet to come. Which side do you fall on . Well, i think this short term oscillation that we talked about last weekend and scott, were going to get plenty of ammo from the fed this week, lot of people out speaking, we got powell here in new york on thursday. And so i think, this bull bear tension is really about what are we talking about, are we talking about the rest of this year, and i agree with rob, we certainly could be setting up for the potential for, you know, a high equity market from now until the end of the year, but the longer term lags of these rates it continues to be the open question coming into 2024. And how does that impact the consumer in particular, i think the other thing that you touched on is, you know, whats happening from a perspective on the rate market right now, we were worried about u. S. Debt and we were seeing the yields were ticking up higher and higher and higher and didnt seem like much of a ceiling over the last few weeks, then we have whats obviously happened in the middle east, youre seeing a little bit come back in the market, some additional positioning coming into the end of the year with people needing to bolster their fixed income exposure ahead of december 31st, you could get a bit of incremental treasury demand. All of that, though, is inconsistent with our view of 2024, which is going to be a more challenging environment and more dispersion underneath the surface. There are going to be winners and losers next year in the equity market and unlike this year, when we had a very small contingent leading the returns, we do expect to be more stocks that show forces in a more challenging environment. I want to focus on the next 2. 5 months before we turn our attention to 2024, weve had a good year in the major averages, under the surface the performance of nonmegacap tech hasnt carried through. What do you see it between now and the end of the your . 2. 5 months, are we set up for some kind of significant move higher . So, i think i think that we are and i would tell you that and i dont mean to start the show off disagreeing with rob i dont see valuations being the problem even if we do get back to the old highs that he sees them as, the russell 2000 has a p. E. And the mid caps of 13. The stocks arent expensive. Phenomenon of the magnificent 7 is whats making the market, the market looks like valuation might be an issue, solely because of the massive outperformance and the proportion of the indices these stocks take part. Theyre a huge component. Thinking about stocks as an asset class, the valuation is not the thing thats going to stop us here. I think the bigger concern is, can yrates spike in and commodiy spikes. Two reasons why were not set up for success. But assuming we dont see anything abvernt on that front, i would point out the best development that were seeing today away from just the headline index gains is brent. Last week, something very important happened, for the first time in ten weeks, we finally saw a contraction in the new lows versus new highs and thats for all stocks trading on the New York Stock Exchange and nasdaq. Last week it stopped. Thats way more important than the forward p. E. Ratio of the s p 500 just in terms of the behavior of what companies are doing in the buying and selling. 92 of the s p 500 is up today. Thats the highest reading since april of this year. So it looks as though youre getting that improvement for the first time in a long time, every sector is green. 8 of 11 sectors are up more than 1 . The only sectors arent, utility, healthcare, real estate, the usual suspects. For us to be experiencing for what weve been experiencing, geopolitically and only seeing a vix of 17 is absolutely remarkable. Earnings are coming up. So far, so good. Tech is going to be the most important. Two weeks of tech and Communications Services that are going to decide this thing, but if we get through those and a low to mid 70 beat rate thats where we end up. We justshowed the wall with all the green on it, joe, its a really wide day today for the market. Tony, the head of Goldman Hedge Fund coverage, said, the path of least resistance is higher from now until the end of the year. Confident in durability of the economy. And also likes the setup for tech stocks, calls it compelling. Sounds like, you know, how youre playing it, joe, youre expressing your bullish view through tech. In the qqqs. How were going to be able to progress higher. Yes, very thoughtful, wellwritten note by tony, i agree with all of it, its very rare, scott, that leadership in a year where youre seeing a positive performance overall for the s p 500, its rare that leadership would change this late in the year, its not as if here we are, october 16th, suddenly technology is going to take a backseat, youre going to see ochl the value leave the market, no, in fact in a positive year, its generally the leadership that will tend out to close out the strongest. Thats what im positioning for, thats what im seeing in market. Two of the more critical stocks in terms of the generative a. I. Story in 2023, theyre not going to be reporting in october, theyre actually going to report later in the earnings season, so nvidia will report in days s preceding thanksgiving. So theres potentially more positive news to act as a catalyst on the other side of the earnings and the fmoc report. The markets today to joshs point its a very, very strong cocktail of positive dynamics, first of all, you have a 10 year and 30 year yield which is rising. Market is shaking that off. Youre seeing very strong buying in futures market for both the s p and the nasdaq and crude oil is not trading with that heightened sense of urgency that it was trading on friday with the concerns surrounding geopolitics over the weekend. I like the entire dynamic with how were set up here today and its indicative with how were going to set up for the remainder of q 4. Josh makes a good point the valuation of the s p 493 is not the valuation of the s p 7. The magnificent 7. Those drive the market. Its hard to say broadbrush statement that valuations are too high when the overwhelming majority of stocks, you know, if you look at the equal weight s p for example, what valuation are we talking about s p 49315 times . Reasonable, theres opportunity outside the magnificent 7. But when you talk about whats going to drive markets its going to be the capitalization of those names thats going drive performance until the year end. What they do have going for them is window dressing, if you take the playbook from the previous two years and youre coming into yearend youre buying the winners and tax harvest the losers. A setup where Technology Got hit, it rallied very hard. Energy got hit the year before, it rallied very hard. So if you push that playbook to this year, you could see very much the same thing, now what that does set up is for opportunities selectively and i just be mindful of the selectivity, here are some of the issues out there, smallcap stocks, despite their valuation are deeply impacted by the financing markets, much more than their larger competitors, theyre impacted by supply Chain Management and cost of labor, so you have to be put all these things in your calculus. Is that not understood by the markets . No question its understood by the markets. Why does money keep going into the megacap names, why make it more difficult because theyre delivering on earnings. When you say, you know, you have to be, look under the surface for stocks that are going to do well, the prevailing thought in many corners is, dont make it harder than it as to be. From the beginning of the year until now, you can take you from here to there again. They reached valuation levels in real rates were climbing which is what the fed wants. Shannon, jn than said its just a matter of time. Just a matter of time until winners to come. He talks about tech. Its going to catch up to tech eventually. You buy that or not . Well, i mean, i think hes really looking at it from a mean reversion perspective and we have all these potential head winds coming into next year and why wouldnt you see that particularly because, you know, think joe or josh, one of you guys made a great point of the sectors underperforming today and theyre the defensive sectors, scott, there needs to be capital if we do see continued Economic Contraction and more caution in the first half of next year, that money has to rotate from somewhere. I think of it as rotation standpoint than fundamental flaws. Weve argued about this several times on the show. Cash flows, continued top line growth, ability to engineer that, thats what megacap tech has. Its about a rotation that we need to be happening to find investments in more defensive parts of the market and its more about the timing of that more than anything else. I think thats the question youre asking on the show today. Joe, im not sure theres going to be selling of those stocks to fund the buying in other areas. Now, let me bring up, too, you know, joe, we have an update, everyones been talk about the broad strength today, let me see apple, if i could see, intraday, before the program, that stock was red, which is unique in and of itself today. Its still red, why, because jeffries talking about iphone today being outsold by huawei in china. Sales are down 14 . One of the worst debuts in china for the iphone since around 2018. How much does this matter . I think it matters. Obviously, specific to apple, listen, the news came out earlier this morning and the market went down initially off the news the nasdaq futures came right back once again, so its specific to apple and i think theres enough broadbased strength in the megacaps that well see resiliency to the degree in which apple is going to be the weak link i dont think thats going to be the catalyst that reverses this overall positive trend. Yeah, rob, look, you own apple, youve been trimming it, you said today that a call on apple is a call on the market. Its neutral. Square those thoughts for me. Were set up for a modest run, maybe back to the july highs. Were not in the camp that were going to see 4700 on the s p. Were neutral apple, recognizing that were longterm owners of this stock and we have valuation discipline which may or may not be valued by others on this show but when the stock gets expensive we trim it down the trading rangers, you can trade these bookends to create opportunities to buy other types of names and so apples a great business, but youre in an environment where theyre expensive, having some deceleration in their business and being overweight doesnt make sense but because of the large cash balances they have an incredible ability to manage their shares outstanding and were not selling it for our longterm investors. Your thought on apple the significance of, you know, again, big up day and yet this stock is red and some significant concerns about the strength of the 15 . Theres no question that geopolitical tensions between the United States and china are an issue for apple, no question that apple has an uphill battle right now, id suggest this idea that things necessarily have to get significantly worse there is simply not true and thats why the stock is only off 1 today, its important to point out that apple is foxconns most important customer. Foxconn e employs 1. 2 Million People in china to work on things like, iphones, they are a top ten employer in the country of china, theres a very high degree of depend dense on these various entities. I think the market is smart and understands that. If you opened up the wall street journal and said, apple is struggling in china youre really not paying attention and i would hesitate that theres some sort of Market Impact coming to that insight today in october of 2023. So if thats the big drag on apple itself today, thats okay so be it, this is still one of the bestrun companies in the world, obviously its a premium valuation. Theyve earned that premium valuation. This is a stock that we need to hold up until yearend if were going to get that rally. Real quick, too, its not insignificant the business in china, 20 of apples revenue comes from china. If huawei has gained back a significant part of market share, the company exhibited slower revenue growth, apple and the iphone drives the whole boat, which it really does, thats certainly something to keep an eye on. Up next, cais founder, cha chairman, matt brown joins us. Dont go anywhere. We have a big show still ahead and were back in two minutes. Cmon, were right there. Cmon baby. Its the only we need. Go, go, go, go ah touchdown baby touchdown are your neighbors watching the same game . Yeah, my 5g Home Internet delays the game a bit. But you get used to it. Try these. Theyre noise cancelling earmuffs. I stole them from an airport. Its always something with you, man. Great solid greek salad . Exactly dont delay the game with verizon or tmobile 5g Home Internet. Catch it on the xfinity 10g network. We got a good day going on the market. Dow better than 300. Were back on the half. From Beverly Hills. Investors look to maximize returns at a higher rate environment. Joining us is matt brown, cais ceo. You have an interesting product that you directly connect Financial Advisers and asset managers, correct . Thats correct. How does this work, they can translate directly . What weve done is connected with the independent Wealth Community with a host of alternative asset managers, real estate, hedge fund managers, giving access to each other. Such an interesting environment that were in a new environment relative to where return expectations are in Public Markets, Interest Rates are high and some suggest theyre going to be higher for longer, what does that mean for alternative allocations . Were seeing a new era of access right now, average allocations to alternative investments have been quite low, below single digits. Institutions are close to 40, 50. Over the next decade, what were seeing a huge shift in allocation, the rise of threedimensional portfolio. More of a balanced 50 30 20. The big news there is, this is one of the biggest reallocations in finance, upward of 12 trillion will be reallocated from Wealth Management into alternative investment and hedge funds, private credit, were talking about private equity, im curious, as to someone whos running a Wealth Management firm, how youre thinking about the future of what the portfolio looks like, the way matt describes its no 60 40. It cant be. We talk on the show on our show every day about liquid markets but theres structural advantages in private markets. Diversification. When you think about forward returns, and achieving actuarial targets what some do all the time, theyre thinking, i have a 5 actuarial target how do i achieve that in a world where they may be coming down, and the level of control that can be exerted in the private markets is substantial both from an operating leverage standpoint, Financial Leverage standpoint and then opportunities that are created where forward returns move higher, when Public Markets get scared, private markets step in to take advantage. European debt crisis. Banking crisis. Private credit emerges as another solution. Yes, the cost of executing in that space has gone enormously higher because of the Interest Rates going up and so returns come down, but there are so many levers to pull as longterm investment owners versus traders. You think that, you know, ria have an easier time selling alternatives to their customers the typical mom and pop investor. Well, first of all, were a b2 b platform, theyre not selling, theyre advising, theyre building portfolio and convincing the average investor i think right now, the story is out there that the 60 40 isnt working and thetrack record of private equity, private credit, Hedge Fund Strategies are delivering return, thats pretty well proven, advisers right now dont lack demand for them, they lack access and education. As the platform steps in as the technology to make sure were arming the financial adviser, being the copilot if you will making sure theyre allowing for great products like alternatives to get into the portfolios to improve portfolios. I have a question, you look at the community, many of them are boutiquey, access is important to this, huge selection risks in the space, a company like yours is really stepping in to help those advisers not just construct but to get access, what has the adoption been like in that population towards these assets as they become more and more important. The adoption rates per case have been growing exponentially. The Adviser Community has had the demand but just lacked the tools to be able to really source, value wait, learn about the strategies and implement and execute fficiently. Manual processes that have burden the world of alternatives have gone away with platforms like cais. So, were seeing huge adoption rates. We measured that. We also measure deepening wallet share, to extend their relationship with their existing client. Many advisers believe that that their clients arent talking about it because the