The last, earnings and rates. Earnings have been good for the most part. Rates are not going in the right direction, though. 100 . To a certain extent youre watching oil a little bit. Oil is up. Its about ten year and the ten year approaching 5 . 30 year above 5 . This is a challenge, a problem. We know whats coming with the treasury announcing what their supply will be. I dont like the premises because the bond market is doing the work for the federal reserve. Whats the impact on the market . From someone who is bullish on the ability for the Fourth Quarter to be positive driven by the magnificent seven. Today is an ugly reversal, not a day for the bulls. Today is a day for the bears. This is not a pretty reversal. And the only thing keeping the market from deteriorating further is apple, alphabet, and microsoft. They are providing a degree of resiliency from the market moving even lower. Well get into whats at stake. Netflix and tesla after the bell, too. A good test, apple is negative. Microsoft and alphabet are barely positive. Jimmy, ill go to you because you are a representation of the bullish perspective. You have rates it almost feels like 5 on the ten year is a formality at this point, that it will get there, not that far. Eight basis points away . Its pretty close. Thats certainly an issue. Im not sure its an issue today. I think that its the middle east. The hospital was jarring to everybody and i think the markets have been on edge wouldnt yields be lower . Ill come right back to it. I hear you on it. The equity markets right now are a little bit on edge, which, by the way, you dont sell every time iran rattled swords. To your point, though, this is a question in terms of the yields whats the more powerful force, declining inflation or increasing deficits . Right now it sounds like increasing deficits. I dont think that will last, and here is why. If you look at the last cpi report, and this is courtesy of ed yardeni, if you strip out shelter, which we know is lagging, is at 2 , right where the fed wants it. We know shelter is lagging, so i think it will continue to come down. That takes a lot of pressure off of the fed and thats one force that would counterbalance whats going on with deficits. Could you get to 5 . Of course, scott. Eight or nine basis points away. But i dont think thats where you reside. I think youre looking at a peak in rates. Look, the industrials are bad today. The transports are bad. Well get into some of those. Weiss, do you want to counterbalance, if you will, what jimmys perspective is . Obviously the rate creep is going to weigh on sentiment and 5 may be that line in the sand where if you start to get there and then above, investors will have to make some real decisions where they want to be. Yeah, so id say that, yes, what happened with the hospital in gaza was a contributing factor, of course. That was stark to me yesterday despite the tremendous runup in yields yesterday, really, really significant and we havent seen that oneday move that the market was still moving higher until that complacency set aside likely triggered by the hospital bombing, and then the market sold off. So i think this goes to what ive been saying, the market is too complacent. The issue isnt on the fed raising rates. The issue is china is the largest holder of our debt, of our treasuries. Its the largest buyer of our treasuries. Can they keep buying . So you really need a global view of markets, not just global in terms of geography but global in terms of what you look at. Can china continue to buy our bonds when they have to support their economy. They have massive issues. So rates may continue to go up as we are seeing when the fed basically, i think, is done. Even if the fed is done, for two reasons, it doesnt matter. Rates are where they are. They will stay where they are. And, number two, our paper is less attractive in terms of the alternatives sovereign has had in buying it. And then what i would say is earnings have been okay. They havent been great. Theyre always okay. They dont have to be great right now. Exactly. I think the expectations from this quarter to the next quarter will be even better next quarter after that. The most important ones, as you would admit i do admit. But when you look at the measures of the economy are, jb hunt well talk about later, are not coming through so great in terms of the economy. Flights to israel, whatever, i think the direction is still down. So it is a big week for all the reasons we discussed. Probably last commentary from jay powell ahead of the november meeting. Chris waller, fed governor is speaking as we speak. Steve liesman is ready with that. What are the headlines right now, steve, from mr. Waller, because he is a Voting Member . As you know, obviously it carries a little more weight when waller stocks, when powell speaks tomorrow. What are we learning . And wallers probably the senior economist among the governors and the fed, one of most outspoken. He says the fed can wait and watch and see how the economy evolves before figuring out what to do with policy here. He says recent data has been overwhelmingly positive for both maximum employment and stable prices. The feds dual mandate. The question is whether all that have will continue. More poliicy tightening, inflation might not continue. Housing inflation hasnt helped very much and the Core Services has not really slowed. Some downward pressure from Monetary Policy and Household Spending and increases in interest rates. Hes watching, scott, the recent runup in yields and saying that could also play a factor. He was one of the more hawkish ones. We can be patient here so that patience continues even though things are leaning the wrong way in terms of things being stronger. I dont know why thats wrong but wrong for somebody who wants the fed to cut. Stronger economic growth. He even alludes to it and weve talked about this almost every day a fed speaker. They have done what the fed would have wanted to happen any so you can wait and watch. Be surprised if the message is any different from the chair himself. I was trying to game that out myself, scott, what hes going to say. I dont think he has a reason to make a decision right now and if you dont have a pressing reason and somebody gives you time, scott, i think you take it. I think you can find that time if you look at the outlook for the fed rate structure, which is very low probability of that november hike, goes up a little bit in december, and now its 51 by january. If you see things shake out, is this a strong growth in the Third Quarter and waller puzzles over this, does the momentum continue into the Fourth Quarter or pay back with more of a slowdown i think he would take it. Steve liesman from the headlines of christopher waller. Bryn, lets move it forward. Lets move off the fed and talk about what will happen end of the day today. You own tesla. The Third Quarter is usually the best stock reaction for an Earnings Report for tesla. This according to bespoke, averaged a oneday gain of 4 2 3 percent on its 13 day earnings. No other quarter has seen similar gains. So its the first of the mega caps really to get out of the gates. Whats riding on it . I think, first of all, the Options Market says were going to get a plus or minus 6. 5 move. I think a little bit higher than what bespoke was saying weve seen in the past, higher volatility one way. I think people will come in on what are margins, and are we at a trough in margins, which we wont know until the future, right . They can say were at a trough in margins. I think we want to hear about what theyre doing on the ai front. Tesla has been pivoting away actually tesla has been focusing on taking all the videos from all the tesla drivers using full selfdriving, putting that up into their ai model to help the full selfdriving functionality work better. Theyve been having success. Those analysts you have to look at are going to want to see conversations around margins. Its about the s and the y, they continue some of the bestselling cars in the world. I think can give a potential of a negative versus a positive 6. 5. I own this long term because this is not just a car company. What we want to see it what theyre doing on the ai front. Joe, you have it in the joet. Its probably the most rate sensitive of the mega caps. Some decent action in the nasdaq. Its not like every stock is down because they have stopped on the ten year. Apple has been volatile. Alphabet is positive. Broadcom is positive and the like. What about tesla here . And, more importantly than tesla specifically, its importance right now to the nasdaq, which youre betting big on. Its the first step into understanding what the mega cap names are going to be reporting. I think with tesla, its about price momentum versus the fundamentals. The fundamentals are on retreat, theyre cutting prices so the revenue estimates are down, bryn can correct me if im wrong, i think 50 for the quarter, and i think bryn is right. Its about the margins, about the automotive gross margins, do they fall below 20 which there are some expectations theyre going to and an environment youre heavily discounting the price of your cars. That doesnt speak towards strong fundamentals. Unfortunately for us its been nothing more than studying momentum. I would almost categorize that as somewhat guilty with the need to prove their innocence. Netflix today as well. I mean, these are important stocks to get out of the gate before the real parade starts of the mega of the mega caps. Tesla i just wouldnt own it here, plain and simple. The capex, they may be more efficient but still a capex machine. You now are having a glut of evs. Were done, not so convinced, have battery stress or whatever. Number two, you have them reducing price. You have china where the business is and sales declining there despite the price cut. Again, thats capex and, again, no Battery ChargingCompanies Make money and i dont think anything is good here. If they have a monopoly on that, and youve seen them sign deals with gm and ford, theyre going to be the player. Theyre going to be the player. Who is talking about that . Only tesla. The point is theyre not profitable. You have to spend a lot of money. Given what the pickup is in demand on tesla cars, battery cars, its not going to show. Well show you a live shot here of the floor of the house. Well see if the second vote trying to elect a speaker of the house. Emily wilkins will let us know how that goes down. Thats another thing thats important to keep your eye on. Bryn, as i look at the the two most important, apple and nvidia, because of sheer size, its not like theyre trading off that wonderfulfully. Nvidia, new export restrictions are weighing on the stuck. Its getting cut to 600 from 630 at morgan stanley. Theres like no margin for error right now with nvidia given where the guidance has gone and the stock has followed. Its down 10 in three months. Yeah, and also the 200day moving average is a bungee jump, down to 340. Theres a lot of white space between now and then. A lot of people came after the stock is up. I have my eye on somebody. I spy jim lebenthal. Well talk about that in a second. Please, continue. Lets see how much diamond hands they have in the stock. If you look, it bounced off 415 the past two times and shot right back up. If you reach this 415 level, technically it looks weak. Its had a wonderful year. I think so many people got in afterwards youll have people get shaken out of the name. Getting close to the 200 interday which could happen. Jimmy diamond hands, how does that sound . Do you want to keep going . You are one who got in fairly recently. You pointed out 9 , if you want a stock with the potential returns and the proven returns that nvidia has, relatively new to this so i dont want to sound like im the ax in it, in terms of why this week, china, thats the catalyst. This is a heavy day in the market. We talked about that earlier whether its 5 on the ten year or as i think its the middle east tensions when people are looking to raise funds theres a lot of reasons theyre going to look at nvidia. For people who held it, this is a natural weekday to take profits. I do not, just to be clear, look at the news over the last two days regarding the china export restrictions and say, oh, my god, the model for nvidia is broken. Its not. Demand is very high. It is likely to be met elsewhere. People cant get enough of their hands. That will continue. Nvidia is a victim of its own success because of where the guidance has gone. Six months ago its made everybody believe it is the player in ai. The stock has followed that narrative. Let me give you an analogy our good friend mark fisher used to use. If someone pulls the fire alarm, the room is full. To bryns point a tremendous amount but the price could fall down to the 200day moving average. Ive advocated for a reasonable valuation alternative which is bro broadcom. And broadcom has actually been very resilient despite the news weve heard this week with the restrictions placed on a lot of these chips being sold into the chinese economy. Its at a reasonable valuation and with nvidia, look, my thesis being the catalyst for a strong Fourth Quarter, no i in team, im on team mega cams. Im not saying any one of these stocks will be the stocks that will lead us going forward. If youre studying position, boy, its a pretty overweight positioning thats allocated to nvidia. I mentioned apple amid these reports that, you know, maybe the new iphone is just not the barnburner people were expecting it to be. Steve kovach is joining us with that. Now thats becoming starting to take over the narrative. What was a good start is now like, hmm, whats going on . Thats exactly it. Theres good news and bad news. You can pretty much guarantee youll get an iphone for christmas. For apple investors, demand appears to be slipping for the iphone 15 lineup and that could be harder for apple to return to sales growth in the current quarter. Analyst have is been tracking iphone 15 availability meaning the percent of apple stores that have phones available now if you walk in and try to pick one up. Availability very limited the first week or so but improved a lot in recent weeks. Bank of america saying up to 30 in the rest of asia and apple needs those markets to buy new iphones. Last year factory shutdowns from covid caused apple to miss a lot of sales. That had a rippling effect. Huawei overtook apple as the top brand in china after releasing new flagship phones for the first time in a few years. The nikkei reporting iphone unit shipments will be flat this year while huawei plans to make tens of millions of new phones next year. The flat unit sales to sell the more expensive pro phones to sell well and get apple back to growth. Apple is producing more phones enough to satisfy demand better or demand isnt holding up enough. Which is why availability has improved for the same time period compared to a year ago. Now apples Earnings Report on november 2nd will include the first several days. Good report from steve kovach. Bryn, you own it. I know you like it, but liking it and then looking at the chart are two different stories and they do tell maybe two different stories. Apples chart looks terrible. I think 169 is the 200 day. Its not that far. Ive been pretty consistent on saying this. What i would like to see from apple coming back to top line revenue growth, to mean the b bugaboo is earnings per share continues to grow. The per share continues to get smaller. And so that, to me, you want to see good top line growth. Its had a good return this year relative to a google and a meta and other names its underperformed. I think we need to start coming back to top line growth or people will say this company has a rich multiple. This is an older name. Its done very well, but what multiple should we pay for the stock . I think its a very, very important name, the number one or two holding next to microsoft in both the qs and the s p. The weakness cant be ignored. Well keep our eyes there. I mentioned whats going on in d. C. , the house trying to elect a speaker for the second straight day, at least according to whether jim jordan will be elected by his republican colleagues. Emily wilkins is following it for us. Reporter at this point the vote is ongoing, but jim jordan does not have enough votes at this point to become speaker. He could only afford to lose four republicans, so far he has lost six, and we are seeing members who voted for jordan yesterday now going ahead and voting for other candidates. Now this was expected. Jordan and his allies came out before the vote, said they expect this had to happen and promised to keep fighting. Republicans are already looking at other alternatives. Youve heard talk about empowering speaker pro tem Patrick Mchenry to be able to pass legislation. We are expecting a resolution to be introduced soon, as soon as today from dave joyce that would give him powers. More and more republicans are saying, hey, we put forward scalise, jordan and want mccarthy. None of this seems to work and we have to find something else. The criticism youve heard from jordan and other republicans to that plan is that they would likely have to work with democrats to get that done. So seems like we have a long ways to go at this point before anyone will be named speaker of the house. Emily, appreciate the update, Emily Wilkins down at the cap capitol. Stocks, meantime, session lows. This adding to the unease that investors are feeling between the war in the middle east, whats happening in interest rates, the lack of a speaker down in d. C. And the chaos just surrounding that whole process for the better part of the last few weeks. Well watch that. Coming up, well do our chart of the day. Morgan stanley pacing for its worst day in more than three years. E. Yn is making a big mov well reveal that and will trade the space next. I promise to serve, not sell. I promise our relationship will be one of partnership and trust. I am a fiduciary, not just some of the time, but all of the time. Charles schwab is proud to support the independent Financial Advisors who are passionately dedicated to helping people achieve their financial goals. Visit findyourindependentadvisor. Com meet gold bond daily healing. A powerhouse lotion that moisturizes, heals, and smooths dry skin. With 7 moisturizers 3 vitamins. And. New gold bond healing sensitive. Clinically shown to heal moisturize dry, sensitive skin. Gold bond. A pretty ugly day for the bank stocks today. Leads to us bryn, who has made a move and sold goldman sachs, which youve owned for a long time. So why now . Yeah, ive owned it for a few years personally. We explicitly moved out of financials for clients in august of 2022. I had owned goldman. When i look out today at what catalyst do i see to drag the stock higher,