United states . Well get the latest. And later, the chart master will be along to break down his list of stocks that are stuck in a bear trap. Hell tell us how investors can break free from these unbearable names. Oh, man. Im melissa lee, coming to you live from studio b at the nasdaq. On the desk tonight tim seymour, guy academy, julie biel and mike khouw. We start with the markets. The benchmark treasury hitting 5. 02 early this morning, a new 16plus year high, but then falling 17 basis points from those levels. It was the third day in a row it closed below that mark. One sector of the market in particular seemed to like the yield move, and that would be megacap tech. Look at the gains in names like meta, amazon, microsoft and alphabet, all of which report earnings this week. Can the momentum keep going or should you be worried about what the results are do to the stocks . A really interesting move in the bond market today. 100 . When you see a 16 basis point move over the course of a few minutes, thats a staggering move. Listen, im not pretending to know whats in bills held. Great trade, number one. He totally nailed it. But number two, i think he looks over the landscape and says, okay, a couple of things are happening. The economy seems to be slowing and the potential for geopolitical risk is escalating with each passing day. Both of those, in my opinion, would make yields go lower. The risk reward probably doesnt make sense here. Im going to take off the trade. Good for him. I dont think, though, he top ticked this one. I still think rates are going to move higher on the supply side of things. So, might take a couple weeks now, given whats transpiring, maybe some of the unwind, but i think yields are headed higher. I understand why hes doing it, but i dont think hes going to mark the top in yields. Higher after the issuance is digested . I believe so. What do you think . The things that have caused yields to move higher have hardly changed. Bill has been outspoken at different points. And i just think you got to place, and jim bianco was c calling for this move, i think the pause makes a ton of sense. We have equity markets this week that possibly, if you believe that some of these big names could disappoint a bit, were going to get into that, too, that would be bond friendly, because these have been, you know, the telltales on the broader economy, which could worry you, and why yields have been going higher. The tenyear jgb closed at a cycle high. Weekend press was that they are going to give up that 1 barrier. I think that the distortion in the japanese bond market has a lot to do with keeping yields down globally, and i think thats something that you really have to worry about. In fact, that is the biggest risk on the upside to u. S. Treasuries outside of some kind of extraordinary issuance dynamic we dont hear about. Because what bill ackman is talking about, are risks that are safe haven drivers for u. S. Treasuries. We look at what the markets did last week, doesnt surprise me we got a kickback again today. We saw the qqqs, i think the charts on a lot of those megacap tech stocks look decent. As much as its been easy to say theyre holding the linchpin what were going to hear this week, those numbers are going to be right down the fairway. There are risks, but i think thats part of how youre playing this. Youre not getting short these names, you are probably figuring out where you want to be long them and short other parts of the market. Mike, how are you feelinging a megacap tech . And if yields are at least in the shortterm at a high, or, at a peak of some sort, then is that sort of an allclear for at least this trade to continue for a little bit longer . I dont know. The Options Market isnt really signaling an allclear on the rate side first. I mean, for nose who are following along at home and want to look at how long bonds behave, treasuries, that is, just look to tlt. Thats trading with a significantly higher options premium than spy is. So, right now, as far as the Options Market is concerned, treasuryies are farisingier, an thats an environment where stocks havent been calm, either. One of the things i also thought that was interesting, tail end of last year, you know, thats when we started to see a beaten up sector all of a sudden roll over again, and that was financials from midtuesday to the end of the week, and we saw some areas of strength in sort of the higher beta and growth areas, which suggests to me that investors are more interested in idiosyncratic growth than making a broader macro bet. What were seeing in the bond market should be cause for some concern, looking ahead. Julie . Yeah, i agree. Absolutely. I think that its becoming more and more of a stock pickers market, where before we just dumped so much money on the economy, that everything was working pretty well, because our consumer is so healthy and now were really separating the men from the boys or whatever metaphor you want to use. And thats really starting to play out. And youre seeing with earnings, youre seeing that in general, though expectations on sell side estimates are low, i think on bye side, people have been pretty disappointed with hohum results. You need to not just report a new quarter, you need to clearly show strong guidance and not a lot of Companies Feel really confident to do that. And whats happening in the bond market is not giving them any kind of comfort whatsoever. Just the volatility is really enough to keep people on the sidelines holding their breath. So, we thought it would be an interesting question to ask you guys, the traders, which stocks, which megacap tech stocks you are most concerned about going into earnings, especially since we have a huge slate this week. And interestingly, guy and mike agreed on one name, and that would be thats gained the most in the past quarter, that would be meta. Why . Not an indictment on facebook at all. Valuation at this level is trading at a market multiple, probably 18 times next years numbers. And you have revenue and eps growth to back that up, probably should be a higher multiple. Im worried because, if you think about who their advertisers are, smam, ill, mediumsized businesseses. The russell is rolling over if theres a lag or a delay or a push forward in terms of their advertising dollars, facebook will be the first one to feel it. So, if you start to get some, i dont know, rhetoric or some talk around that slowdown, that could auger potentially poorly for the broader market, which is why im looking at facebook, in terms of the tell for the broader economy. Mike, why did you pick meta . I picked it actually, part of that, i think, is some of the same reasons that guy was just talking about. Theres another one, too, which is, what is management going to do . People often talk about some of these companies as having levers they can pull to turn on or off profitability, to turn on or off Free Cash Flow. This is a company that demonstrated they have those levers and they have used them. Thats a positive, in one sense. Its a negative when they elect to start pursuing things like the metaverse and throwing buckets of money at it and you see Free Cash Flow drop to near zero. And thats what caused this swoon. So, if we start to see management Start Talking once again about investing in some of their visionary projects, that, i think, is a potential risk. But the company is very cheap, if they dont do that, and even with some of the pressures that guy was just talking about, you know, they might actually get some flow from x, for example, which is obviously changed their algorithms and some of the content cray toeators turn to t products. Amazon, on the retail side, it is Enterprise Spending on the aws side of things, julie. Yeah, and part of it, too, for them, its a little bit they dont have quite as many variable costs as Something Like a meta. So, i worry more about the level of kind of cap x investment hard dollars slowing out of that business in order to be as competitive as they can be in a. I. I think theres a little bit of a Center Margin for them. No pun intendedintended, on bei to weather any kind of storm in Enterprise Spending or the consumer. Generally speaking, big cap tech has earned its premium multiples, broadly speaking, right, because you are exposed to secular growth trends, they are in businesses where it really pays to be big, but this is the one that i think this is the most that is most exposed to the consumer. I think d1 is microsoft and apple. Division one. Hes calling us the jv and hes the im not calling you the jv, per se, but those companies its microsoft. Its the secondmost Important Company in the world. Its the company that, to me, is in touch with the enterprise. They were the one that really almost even started the a. I. Frenzy on some level with chatgpt. Theyre the one that i think is the most resilient Business Model and one of the charts that along with apple, at the end of october and the beginning of october, really started to scare everyone. Their chart has done better than apples. The Biggest Issue with microsoft is not that the earnings numbers are going to be difficult. Azure has been guided to mid 20s growth. Its that the street wants to be at 35 times on this. And thats, relative to history thats expensive. Its the secondmost Important Company in the world, the secondbiggest certainly in terms of market cap. Thats d1. Thats the one that has the most on the line. For more, lets bring in jim bianco. Great to have you with us. He warned, by the way, on fast money earlier this month that bond yields could race through 5 in the next couple of weeks, now believes they can go even higher, despite todays reversal. How high are we talking about, jim . Well, if the yield curve is going to uninvert and that seems to be what its doing and that means that the highest point in the yield curve will eventually become longterm interest rates, which is normal, well, the highest point in the yield curve right now is sixmonth bills at 5. 5 . So, if were going to completely uninvert the yield curve and i think were destined to do that, somewhere along those lines, then its got to go to 5. 5 . Because the fed has said that theyre higher for longer. So, i dont think that this move is quite over with just yet. I know everybody keeps asking me when the move is going to be over with, but i think that the probable that everybody faces is, they forgot the 2009 to 2020 was the qe abnormal. They say, my god, weve come up 500 basis points, thats a lot, its going to hurt things no, the first several hundred of that was getting to a level of neutral. The last little bit of it has been restrictive. I dont think its been restrictive enough to really hurt the economy. Thats why later this week, were going to probably report a 4 gdp, after we had some pretty good numbers with jobs and with unemployment claims going under 200,000, so were not really punishing the economy, and thats why i think the markets have room for rates to continue to move higher. Laying out the case to 5. 5 , jim, you didnt mention treasury issuancy, the bank of japan, im wondering how that factors in. Well, they dont help the situation, you know, treasury issuance is going to be a shift from shortterm to longterm, so its not that were going to be issuing more than what weve expected, its that we issued a lot of treasury bills after the debt ceiling was lifted, that was four, five months ago. Now theyre maturing. And the treasury wants to kind of issue more threeyear, fiveyear, tenyear notes. So, thats going to help put upward pressure on long rates. The bank of japan, remember now, japanese are the largest foreign holder of treasury securities in the world. Not china. So, if they are going toll loosen up and let their rates go up, japanese investors are going to say, you know what . Our own jgb, japanese government bonds, look more attractive. Theyll move back to japan, and then were going to see a dampening of demand. Hey, jim, tim. I agree with that. But great call a couple weeks ago on the show, three weeks ago, you said theyre going higher, theyve gone higher. You have pointed out you think you its not just the bank of japan, its that a lot of investors were onboard with this recession environment and people have capitulated. Thats the term ive heard you use. Talk to me about that. Where do you think positioning is now . Because seems to me like everybody thinks yields are going higher, even though its a conversation you were having a few weeks ago, and certainly a couple months ago, this isnt where people were, they werent talking about 4 gdp. How much is this something that actually might be why we could get more of a pause right now . Well, yeah, i think that, you know, the problem with positioning is, theres been talk and what people say and everybody says its going to go higher. Then, if you look at the way that people are positioned, i like to joke that theyre up at night staring at the ceiling, going, theres going to be a bond rally without me. Thats why you see this flow in the tlt. And thats why you see the relentless amount of call buying in tlt in the last month, theres been a million and a half calls purchased in tlt and Something Like 400,000 puts. Thats why you continue to see surveys like the bank of America Global Fund manager survey having the highest amount of people in the 20year history saying the next 100 basis point move is going to be lower. So, thats why i say that theres got to be some kind of capitulation. Everybody is waiting, begging, theyre trying to position for this big decline in interest rates, and it doesnt happen, and they keep getting punished while theyre waiting for it, and we all know, the way markets work is when it happens is when no ones positioned for it. And so, i still think that theres got to be more capitulation in this bond market, which is why i dont think this move is over. Now, maybe for the next couple weeks we turn sideways around 5 , but ultimately, i think were going to go higher and see a capitulation. Jim, great to see you. Thank you. Thank you. Jim bianco, bianco research. 5. 5 by jan 1. How does that factor into seasonality, in terms of the santa claus rally . Were actually come on. Cant we wait for halloween to get no. Boo. That was one of the great episodes of all time. We should find that in the archive. I dont adhere to seasonality, but ill play your reindeer game and say, if we see 5. 5 over the next few weeks, the equity market will not like that and we will be where did we close, 43 and change . We will be testing 4,000, under those set of circumstances that jim just talked about. For the record, i was going to ask you, where do stocks go with yields im in your head. Im in your head. Of course you did. All right, lets get the nvidia. Reportedly planning to team up with arm to make chips for pcs. The news taking a bite out of intel and amd shares. Kristina partsinevelos has the defails. Well, reuters reporting that both nvidia and amd are looking to build the central processing units for personal computers by 2025. This is normally dominated by intel. Nvidia dominates the gpu space, the graphic chips needed for a. I. Models. Cpu chips for nvidia would be a new avenue. They would use arm architecture, which is why arm jumped on the news. A lot of people get confused with the names think of arm like a coding language in which Companies Like ini vinvidia us design their own chips. That arm language is so good, it helps apple make custom chips for its mac computers. That means arm specializes in the blueprint for these pc chips, but the problem is, so does intel, with its x86 architecture. Two languages, arm versus x86. Thats why intel posted its worst day in a month. Amd plans to create a cpu chip using arm architecture, and yet the stock fell. Why is that . Amd already makes pc chips using intels language. And so, there are fears that this new chip could cannibalize the old amd pc chip. Qualcomm, another company that wasnt mentioned in this report, but theyve been saying for quite some time that they, too, plan to build a pc chip. And we should get more details tomorrow at their annual summit around 3 00 p. M. All of these new pc chips, though, mean eroding market share for intel and thats why you see the negative reaction. Nvidia, amd declined to comment. Where does microsoft fit in . Good point, too, these particular chips that nvidia would be working on would work with the microsoft in infrastructure, as well. So, get more details tomorrow, because theres going to be an event that microsoft is holding tomorrow to reveal some more of the details here. What do you think of this . Interesting. All right, so, go back to august, nvidia traded down to 409, huge bounce. Go back to september, traded down to 409, huge bounce. What was the low today . 409, guy. Thank you, tim, for playing. 409 again. And we bounced. So, you have something to trade against in the form of that level. Big volume day, and let me be clear, im not bullish in nvidia, but the stock declared itself to have support, thats how you trade this name. Can intel get through this, mike khouw . Intels got some problems. You know, it seemed like they were working their way out of it. They sort of went to sort of more businessfocused management rather than productfocused management, didnt have the Engineering Team in the csuite, and that proved to be a problem. One of the things i look to is, if you take a look at a new machine, once upon a time, they put a sticker on them, you may remember, everybody advertised about having intel inside. Everybody cares about the gpus. When you buy a newlaptop, it has an nvidia processor, its going to say gtx force or Something Like that on it. If they start moving into intels territory, i just find it very difficult to believe theyre going to be able to fight their way out of that one easily. Its interesting to hear microsoft get in the fray, too. And say, hey, guys, i you better have the chips ready to power our new a. I. Windows. And they have the ability to push this around. The only thing thats more extraordinary about nvidias 3480 move or 180 move this year is, i think how its held in. That 17 pullback off of that kind of a move and the fact that semis, through a lot of difficult questions about the economy, valuations and what not, i think those charts are Still Holding up. I dont love all the good news we priced in there, im not telling you its going up forever. Based upon what the market has done, so far, you have to give that bounce off of 409. 409. Formula 409. Funny you say that. Formula 409. K. P. , you use formula 409 . I dont think it exists anymore. Come on, tim. I think win ddex cleaned the