What is going on . The once bulletproof market looking vulnerable. I send out a sos Phil Blancato is here, Dan Fitzpatrick on deck. Gas prices are starting too rise. Is this beginning of or the end . Tracy shuchart on this could go. What happened to the safe havens, folks. Everyone said Consumer Staples you couldnt lose. They should be the workhorses of any portfolio. That is back in april. Now theyre down big time. Nancy tengler here how to balance your portfolio in the more vulnerable days. You dont want to miss my takeaway on Government Data absolutely crushing the average american, not the data but the policies based on this faulty data. Wait until i give you the gdp of 2008 before and after. All that and so much more on making money. Charles all right, folks, another rough session and its getting to the point where those who kind of laugh at seasonality, you know, a lot of brainiacs, oh, seasonality, i think they will probably avoid walking under ladders or even throwing salt over their shoulders, right . Because todays weakness seems more like anxiety, maybe the love position war off over the long weekened. Something has certainly changed in the first two days of the week. Of course there are hundreds of stocks out there, millions of investors that have been kind of waiting for Something Like this to happen. In fact look at last week, right . Last week we finally saw small cap names outperform. Small cap growth outperformed all other growth. Small cap core outperformed all other core. Small cap value outperformed Large Cap Value by two to one n a way weve been waiting for transition if you will. Here is one of the problems, market purists will tell you if you take technology out of it, these are the pe ratios for all the names outside of technology, forward pe, it is still at a level purists think is too high. They like under 16. Right around 18 bucks. No doubt this is unique period for the market. This 23 is amazing. He put out a morning note yesterday and talked about the interesting stocks for the Interesting Times were in. I want to bring in Piper Sandler chief investment strategist michael kantrowitz. You highlighted two things. I, lets start with this first, okay . How, how interest cover factors continue to strongly outperform. Explain to the audience who are not quite sure what that means, what youre saying here. Yeah. So interest coverage is a company, is a ratio of fundamentals of a company and its basically how much cash flow a Company Generates relative to their debt service or their interest costs every quarter or every year. So companies with higher interest coverage ratios have a lot of cash, apple cash to cover their debt service and interest costs. Charles okay. Of course youve got a great Top Performing factors over the last decades. Interest coverage is up there. Along with long term on investment capital, Long Term Return on equity and percentage upgrades. So heres the thing. Weve seen these names this year do extraordinarily well. Consumer services up 27 , technology obviously has made a big move up 21 but utilities is also on here. So utilities have not necessarily had a food good year. How do you parse through what i want to be in right know . Interest coverage is a factor, kind of a catchall of quality because obviously to have good interest coverage you have to generate cash flow, you likely have to have some profitability. Whether it is Earnings Growth or profit growth, sales growth, some form of fundamental improvement in the income statement that is what investors have been chasing for quite a while now and sew one of the reasons weve liked larger cap stocks this year relative to smaller stocks is not only because we think the earnings are better and the Balance Sheets are better but also because the maturity wall for larger caps is far further out into the future relative to smaller Cap Companies. So when we look at interest coverage as a factor if you look for companies with a lot of ample cashflow to cover their debt service that will push you up in capitalization towards larger caps because not only are larger Cap Companies more profitable, but also as we look ahead into 2024 and 2025 youre starting to hear about investors worry about companies in the smaller cap space that have shorterterm maturities that are going to have to face higher interest costs more immediately. Charles right. By the way i used a chart from your report to kind of illustrate that. We have the large cap names out here with a lot of their, a lot of their debt due by five to 10 years, even 10 years. Conversely of course the smaller cap names, a lot of it due within the next one to five years, a lot of it even over the next year, to your point, that means raising money at exorbitant money prices even if you cant raise it with that in mind where are you in with the economy and recession because last couple days have been like a sobering process . Market from october, the lows last year, we had a lot of concern around inflation and the fed. A lot of that risk has been priced out of the market and then in june and july this year i would argue investors started pricing in recovery in the economy that really doesnt seem to be gaining any steam. The data has been at best mixed. I think a lot of jobs data weve seen from layoff announcements to hiring plans, job openings have been softer, not stronger. That has been the pattern weve continued to see. We continue to believe that were facing a slowdown that will turn into a recession, obviously calling the exact timing of that is really difficult. Instead we want to position for the path to that end goal which is why we like larger caps and companies with higher interest coverage today. Charles stay the course in the larger cap names. Michael, great work. Always appreciate you coming on and love reading your work, thank you very much. Thank you. Byebye. Charles folks coming up later in the show i will tell you why the government doesnt feel your pain and the reason it is important they are probably the authors of a lot of your pain but first i want to talk about, pick up on this conversation because interest factors as mike pointed out this whole thing favors Growth Stocks especially technology but technology, somethings not right, right . The last couple days maybe theyre taking a breather. I want to sues a example. Case in point zscaler. One of the hot tech names. After the close posted a very, very strong number. They beat and raised their outlook above wall street estimates this lookses absolutely fantastic, if youre the ceo of this company youre sitting back and lighting a cigar. On top of it no less than 14 wall street firms hiked the target on the stock today. It is going to go higher. Guess what . It has spent most of the session under pressure. I want to bring in Dan Fitzpatrick. Dan, the s p 500 peg ratio price to earnings into growth probably most important for Technology Stocks more than anything else, it has rocketed, back to levels at the dotcom days, the bubble days. Is this something that is worrying you . It looks like it is becoming a dark cloud over technology . Yeah, thanks, charles. It is a little worrisome to me but what you really need to look at is past that. Look at the charts will show you where this has already come from. The best markets are like the best stocks. The best ones are the the most expensive. With respect to that i dont really think that is as big of a deal as some might think when theyre looking more fundamentals but if you just look at the seasonality of the market right now were in a notoriously weak month of september and were just starting and also weve had in particular tech, weve had tech move so much higher than if you really think about it, it shouldnt be that much of a surprise this is a more of a sell the news market. So even though zscaler reported just off the charts earnings, it was time to take profits and were seeing that with the megacap stocks as well. Apple is totally broken. Apples tom brady. I think tom is a Great Quarterback but i wouldnt draft him now. And so i look at stocks like that. I look at microsoft, it is also weak and meta. So the very leaders that have taken us up are really stalling and were not yet finding a rotation. Again i would say, partly because of the september seasonality but were not seeing a rotation into just additional tech stocks. Weve got some Software Stocks that are doing really well. Charles right. But were see being rotation into energy. Charles right. So the bottom line you then have taken profits on most of your tech positions, right . Yeah i have. Frankly mostly in cash. I have just a few positions here and there because i think it is important to stay involved so that you continue to have a feel for the market. Charles right. I think most people should but they should be very wary about buying these leaders that have been so strong because you need to understand what your time frame is. Charles right. In youre a longterm investor youre good, but if youre a trader, wait it out. Charles dan i heard word from where you, a guy waiting for you tom brady is waiting for you after the hit. But before then, talk about the oil patch. We got less than a minute to go. If he is, can i get his autograph . Charles you will get more than that my man. We have less than 30 seconds, share with the audience some of the names you like in the oil patch. For the folks listening on raid key wfrb,dwfrd, cop,bkr and tbw. So i do sigh Higher Oil Prices but the thing that lends credence to that is, look what is happening to the exploration and production stocks. Look whats happening to the oil and gas services stocks. Charles right. Youve got a stock like tied water, and by the way they all have the same charts theyre a some charts. Charles theyre awesome. Look at tidewater, charles, it had earnings per share estimates for this year, 3. 37. Last year,. 22. Thats a 1400 increase. You got that, i know were short on time. Weatherford, conocophillips, baker hughes, those are all Awesome Companies to own now, right now, as opposed to superstars of the past. Charles full disclosure i do have subscribers in baker hughes as well which had a pretty good earnings report. Dan, good luck to you in the green room. See you soon. Yeah, i got to say hi to tom brady. Charles i hope he puts out a hand, not a fist. To dans point, starting to search here, whenever that happens we talk to one person, tracy shuchart. She comes here to explain everything to you. The economy, Economic Data out that doesnt look too great. John lonski will break it down for us. First well talk about the bond market, right . Bond street said buy bonds. Wall street said load off on bonds. So far that hasnt been the answer. Phil blancato is long on bonds. Well get his thoughts on that next. Businesses need 5g solutions today. Thats why they choose tmobile for business. Mlb partners with tmobile to not only enhance the fan experience, but to advance how the game is played. Aaa relies on tmobiles network to stay connected nationwide, so they can help get their members back on the road. And were helping pano ai innovate, to stop the spread of wildfires. 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When paul volcker was doing his thing that is exactly what happened. Look, financial conditions havent gotten tight. Theyre still very, very loose , very loose what is going own. We saw record rate hikes, why isnt it working . How come it didnt rocket like it did before. He suggestions maybe all the quantitative easing. Years of quantity quantity have rendered the fed policy impotent. Whatever is happening right now, a lot of folks who are buying into bonds may be a little bit early with the bond market here. I want to bring up the bond market because tlt, this is when the fed began hiking rates and this is where we are now. Wall street was saying it is a screaming buy right around here but is it . I want to bring chief Market Strategist at osaic Phil Blancato. Phil, i thought about you when i saw the article because youre a bond guy. Saying buy tlt. It is pretty rough and yields are up again and i feel like if it breaks this next support point it will hurt a lot . Except youre earning more than the current rate of inflation. You have the opportunity to pad your portfolio with income. Lets be honest, were in deflationary world. I agree with the point you made, there is still too much money in the system. Seeing Credit Conditions tighten, cone super slow down. Were out of excess cash. Things are tighter, rates drop and win on price appreciation and yield. Charles how do we get, do we ever get tighter to this level . Doesnt sound like the fed will do enough work to get the volcker tightening conditions we had unless it happens overnight . Two things drive this they want the fed Balance Sheet 80 billion, 100 billion a day. Two, theyre not done hiking rates. Another 25 basis points to go in my opinion, because inflation is too high. Another year to get where it is really tight. Charles cleveland fed, theyre looking at core cpi not going down too much. Monthovermonth and core pce not going down too much this is probably to your point why the fed keeps hiking rates. Exactly. I would add one thing to this. Charles sure. Be very careful the cost of energy. Now that oil spiked, watch headline push higher as residual effect of energy going higher that could really spook the fed. Headline cpi number could be too low. Exactly. Charles well watch the cleveland fed on that. Meantime lets talk about some of your stock ideas. You like the leaders. Looks like you like industry leaders. You like nvidia, which seems to have trouble staying above 500 and you like walmart. Wall mart standing out in the crowd. Jpmorgan and caterpillar. Start with cat, the dollar is getting stronger. They do a lot of business overseas. Are you concerned the dollar being too strong for multinationals . Im not. Dividend trading at pe that is, below its fiveyear average. Guesting a discount, getting a dividend, battening down your portfolio, creating balance in the portfolio do whether what comes in the next few months. Charles do the jpmorgan picks counter the theme of fed tightening even more . Financial conditions getting tighter that doesnt help jpmorgan. Still buying it at fiveyear discount as well. Getting a 3 dividend. Very diversified dividend. Banking trading lending. At that point, doesnt hurt them as much. Buying a Great Company cheap. Charles youre focus on great companies, strong companies, proven companies, with strong cash flow on sale, bottom line . Exactly. Thats it. Charles great stuff, my man. Appreciate it. Charles folks want to hear from you. Love hearing from you anytime you have a comment about the show, guest, topickings if you have a top pick suggestion, tweet me cvpayne. Colter any saying drill, baby drill. Enough of this bidenomics crap that makes everyone broke when we have plenty of gas, oil beneath our feet. This is crazy. Thanks for filling in for cavuto. Courtney, im filling in for neil later on today. Catch me hosting on the 4 00 p. M. Show at fox. Coming up, Consumer Staples, three months ago everyone eye greed, Pricing Power remains in companies and you had to own them. Well take a look at that chart, folks. Nancy tengler here on what the heck went wrong. First well continue the conversation about oil prices because that is the wild card. Phil said that could be the black swan. Heres the thing, if you look at levels, crude levels, particularly gasoline, this might just be getting started. Tracy shuchart breaks it all down next. I have type 2 diabetes, but i manage it well. Jardiance its a little pill with a big story to tell. I take oncedaily jardiance, at each days staaart. As time went on it was easy to seee. Im lowering my a1c. 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