Before the closing bell rings, and we begin with breaking news. We are just now getting reports that american soldiers at iraqs air base are under attack at this hour by drones and rockets and missiles at this hour. According to security sources, multiple blasts have been heard inside the base. This coincides with a sudden dip in the markets where we fell to session lows for the Dow Jones Industrials which were down 216. Were still down about 206 points. This fresh attack and, again, its in iraq comes after a u. S. Navy warship near yemen intercepted projectiles headed toward it. This according to reuters. We should switch right now to cvoe soling tilt index, at its highest since may, it is above 20. Thats kind of a level that lately, or its not that historically high, but lately that has been the level to punch above it means there is much more volatility. The vix spiking about 8 at the moment. You can see that in this intraday picture. These are concerning developments under even the best of circumstances but, of course, this is the middle east. Starting to churn and many of americas greatest fears could be coming true. The attacks on israel could spread and become a wider conflict with, again, now were about 59 minutes left to trade. Lets take a look at the markets. Weve got the Dow Jones Industrials lower by 190 points, so moderating just a bit, coming up slightly off the floor. The s p losing 31 points, about threequarters of a percent drop and the nasdaq down 114. Russell 2000 down 21, the percentage loss leader, small and mid caps. We are five hours away now from a prime Time Oval Office address by president biden, only the second since his inauguration. The president just returned from a whirlwind trip to israel where the horror of the gaza war continues. With casualties on both sides mounting, tonight the president is expected to request from congress that they approve if a multibillion dollar military support package for israel as it battles against terror group hamas. Were going to take you live in one minute to fox news greg palkot live in israel near the lebanon border. In the meantime, we need to show you how the markets are absorbing so muching both that news absorbing both that news and a speech jay powell gave at the Economic Club of new york. Powell began speaking shortly after noon, and thats when you started to see the dow gyrate. At its low and that was just a few minutes ago, but earlier, the previous low had hit around 12 38 p. M. Right now the dow, we have it at a lot of about 186 points a loss of about 186 points, so it has gotten worse as weve gotten this news about action in iraq are. But it was powells comment that, quote, evidence does not yet show that Interest Rate policy is too tight. That had treasury yields spasming with the 30year spiking 12 basis points over just 60 seconds to 5. 1 . Were still almost there at the moment. It has since barely moderated to 5. 093 . Lets look at the the yield on the 2year bond because it is most sensitive to fed policy. It responded the same way here. It jumped to 5. 259 before pulling back just a bit, we stand at 5. 174 . Powell stated that inflation is still too high. The resilient economy still shows growth above trend but that the fed is proceeding with caution regarding further rate hikes especially in the wake of the hamas terrorist attack on israel which he called horrifying. If to that point in israel, it is 10 04 p. M. Where that horror continues. An 80yearold u. S. Israeli woman and her 13yearold daughter granddaughter, rather, taken hostage when hamas launched a bloody attack 12 days ago have been found dead. So they join the 1300 slaughtered by the militants who are now being blamed for the rocket explosion yesterday that killed hundreds many a gaza hospital. Intel groups around the world now say analysis of Video Evidence shows the mise style was launched from inside gaza. Fox news greg pal cot has been working the story, he joins us live near the remember nice lebanese border. Weve got soldiers being told to be prepared to launch a ground offensive, and now this action in iraq where u. S. Soldiers are defending themselves against missiles and drone attacks. What are you hearing, what can you tell us in. Reporter i think its safe to say, liz, that this entire region is on edge. And in some ways, weve been seeing outbursts and skirmishes certainly where we are right now. We are right up existence the border between israel and against the border, and the last few days we have been watching firsthand israel duke it out with iranbacked hezbollah militants. Just recapping, there have been clashes across process the border at the u. S. Embassy in beirut and at u. S. And israeli consulates throughout the mideast. The arab spring is dismissing israeli evidence it did not hit that hospital, and theyre cup set about the upset about the soaring death toll as israel pounds hamas for its carnage and hostagetaking. Meanwhile, along the border we have witnessed a steady stream of strikes and skirmishes this week involving hezbollah and the israeli military. There was a fresh hezbollah hit today. It was aiming for the army but landed in a civilian area, and there were injuries. Militants are using rockets, antitank missiles, mortars, whatever they can get their hands on. As for israel, they have built up a major presence here. With we were with an artillery unit today that arrived just a day after the massacre down south. Theyre also using tanks, airstrikes, drones and flares. We call them skirmishes, liz, but they are deadly. In the past week, there have been five Israeli Soldiers killed here, eighteen hezbollah and other militants can killed as well. Weve been reporting, it doesnt hurt to repeat it, hezbollah claims 100,000 fighters, 150,000 rockets, has fought with israel in the past and they and their benefactor, iran are, have made it clear day after day after day here if israel pushes further against ally hamas in the south, they are ready to go big here. But the way i look at it right now, liz, its kind of like two global prize fighters going back and forth trying to draw first blood ors but its blood, but its getting more and more dangerous. Back to you. Liz yes, indeed. And and youve been covering it from that very northern part of israel, and us suddenly that action appears to be heating up along with whats going on in iraq, the breaking news we just brought with our viewers. Greg, thank you. You and the crew stay safe. Weve got president bidens president ial address tonight, 8 p. M. Eastern. He will discuss the funding that he would like to see congress approve for israel and for the war in ukraine, dual wars here. Fox business will have complete coverage live beginning 8 p. M. Eastern. The markets, obviously, pretty much reflecting the uncertainty in both the middle east and at the federal reserve. Not a surprise that investors having a bit of trouble digesting fed chair Jerome Powells earlier comments that spanned from how surprised he is by the resilience of the u. S. Economy to the dangers of overtightening Interest Rates to cool inflation. A 400point swing for the Dow Jones Industrials, thats what were looking at. At the trough we saw a 216point loss. At the peak, the blue chips spiked 187 points. Right now were back down nearly 200 points. By the way, the Dow Jones Industrials have crossed the unchanged line 85 times today alone. Lets look at the s p, and the same type of reflection in this intraday chart that you can see. Were at 4,284, thats a loss of about 29 points at the moment. Flip it over to the nasdaq. It has had a 200point intraday swing and right now is falling about 100 points. We are specifically monitoring the 10year yield very closely here as it approaches 5 . It did hit 4. 996 on powells comments earlier, were at 4. 9 8 right this moment. Youve got to watch all of this because that 5 threshold, that would be a level that the benchmark treasury has not closed at since 2007. Could it do it in this final hour of trade . Were watching it minute by minute. And now despite weekly jobless claims, and this is morally very good news normally very good news, falling below 200,000, the lowest number of people joining the unemployment lines since january, its an evidence of a strong labor market, the fed funds futures now reflect a smaller chance of another rate hike. Okay, so let me just explain that. The stronger the jobs picture and the economy, you should sort of see that we would see a rate hike to cool down all of this. Thats what the9 fed would like to see. But right now november fed funds futures show a 99 chance of a pause. The fomc meets november 1st this is the market getting betting on that. December, the last meeting of the year, youre looking at a 30 chance of a quarter basis point hike, but thats actually down from 40 or odds yesterday. And then for january of 2024 were looking at about a 34 chance of a quarter with point hike from where we are now. And its not even worth with it to show, but i watch this kind of stuff, a 3 odds of a 75 basis point tightening. Who knows whats going to happen between now and then. Powell also emphasized during his comments today that the banks are in stable condition, and he noted particularly the regionals. He said theyre strong and well capitalized. And we got some evidence of that from truest and key corp. Earnings. They came in with earnings today, and shares are mixed at the moment. Key corp. Unchanged, fifth third the up nearly 2 , truest down 2 . Lets get to our floor show is. Joining me now, Phil Blancato and trader teddy weisberg. Teddy, the market interpreting or having trouble interpreting exactly what the fed is trying to say especially as he spoke to, you know, the Economic Club of new york. How did you interpret it, and why are markets down at the moment . Well, i think my interpretation, liz, is i think were going to see Interest Rates move higher. I, quite frankly, didnt understand the message. I thought it was, you know, weve heard fed speak from a lot of different fed chairmen over the years. Ive been doing this for over 60 years, and todays speech was the most confusing i think ive ever heard. So im not quite sure what his position is, but but if i read between the lines, it sounds to me like the economy mains strong, employment remains strong, and theyre not doing a good job dealing with inflation, so Interest Rates are probably going to move higher. Liz phil was at that event today. [laughter] phil, when you were watching this, what was the key point that you brought out . Im glad teddy agrees with me, i was a little confused well, its not even confused, its fence sitting. Powell has a very difficult job. He is trying to thread a needle, not to panic the markets. I would not call this panic right now, but what jumped out at you . Pause. That he was very comfortable where were at. He thought the bulk of the work had been done. He quoted Milton Friedman as patience is important as a lag component, and most importantly, rates higher right now are more about a supplydemand issue as well as a stronger than expected economy. Even he said it caught him by surprise. But but the labor market, in his opinion, is showing significant signs of weakening, youre not having this real draconian issue around wages. Even though we got a great retail sales number, in the end, he think sees that moderate slowing down. Its why hes on pause. Liz okayment and you noted two different parts of the treasury, of the yields curve, and you said look at the 1year and hook at the 10year. Why . What is that telling you . What youre seeing, the 1years staying relatively liz 5. 149 for the 1year. The inverted yield curve is beginning to go away, and right now you have an opportunity to do two wonderful things in your portfolio, put 75 in that 1year position, its a great way to earn income, be paid to wait around. If im right, the Interest Rates are going to grind, youll get price appreciation on that long bond, but you get safety in the short. Its the best thing youve had in a portfolio in decades. Liz teddy has been talking about investing in tbonds and treasury i want to say going act back about eight months, but is there anything interesting in equities because things are a little bit cheaper right now . I think, you know, if you twisted my arm, id still go with insurance stocks and energy stocks, particularly insurance stocks because they have a wonderful theyre in kind of a sweet spot here liz theyre cheaper today. Im looking at a bunch of them that are dropping pretty dramatically. Well, you know, i think today is, todays a little difficult for anything. Liz yeah. Is and, i mean, a im not sure if its a trade im going to make for everybody, but i thought that the fact that United Airlines reported yesterday and they the beat it up pretty good, down about 99 9 , was in the 50s, now saidinging in the mid 30s, i think its a great way the play oil, quite frankly. Were long energy, and i think being long in an airline, particularly United Airlines, is a great hedge here. Its a great hedge against energy. Energy is up now. You know, if we get lucky and hinges calm down in the middle east and things start to reverse, anyway, i think its an interesting trade to be kind of buy an airline here and stay long energy, and its a pretty good hedge. Liz phil likes exxonmobil sorry, likes chef. Ron. Chevron up about 3 this year but down 5. 5 year to date, pe of 11. Paying almost a3. 5 dividends and a dividend and a company that is diversified and is going to win on not just manufacturing, but development of new resources. I think the companys got a real upside here. Liz by the way, you also saw on phils list, xerox, that has a dividend of nearly 7. I want to thank you both. We are now hitting fresh new session lows for the Dow Jones Industrials. Were coming right back with much more on that breaking news as it happens. Plus, we got some housing data out. The company that has its finger on the pulse or should we say on the plumbing of the housing market, and there is a lot happening. Youre looking at Home Builders falling at the moment, but year to date all of these are up doubledigit percentages. Stay with the claman countdown, were coming right back. Is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. adventurous music be ready for any market with a liquid etf. Get in and out with dia. Liz the dichotomy of the housing markets health on full display today. Okay, existing home sales in september dropped to their lowest level since the foreclosure crisis. If that was a long time ago, october of 2010. As the current average Interest Rate for a 30year fixed mortgage hits 8 , up 20 basis points week over week. Despite the bearish housing outlook, you know, Mortgage Rates so high, whos going to buy a house in one Plumbing Supplier stock looking rather flush. Ferguson is up 54 over the past year. We do have the wholesale distributer as the largest plumbing and hvac supplier in the u. S. Its customers are mainly contractors and maintenance professionals, but they also have a very broad business overall that gives us a sense of how the market is doing. Join me now, ferguson ceo kevin murphy. Kevin, give me a sense of what you are seeing. It feels like the real dichotomy is that sales are down due not just to the high Mortgage Rates now at 8 , but because there arent enough houses to buy. Yeah. Thank you for having me, liz, great to be with you again. If you look, the feds done their job in slowing down the pace of new residential construction, and weve certainly seen pressure on that side of the world. But if you look at where or we are today and we really have a structural shortage of housing in the u. S. , were down about 4 Million Units from where we need to be. And soyou look at where that structural tension is together with high rates can and high home prices, it actually puts us in a place where were starting to see signs of stabilization. And you saw about a 1. 4 million permit number a couple of days ago, and were starting to see that level off for us as we go through time. Liz interesting. I always like to dig down and try and find out which part of the market is the healthiest. What are you seeing . More activity and more requestses and purchases from your contractor business or if from your diy business . Yes. If you rook at our company overall, the 30 billion revenue number, just over half of that is in the residential space. The bulk of that sits in the repair, replace, remodel side of the world. And we have a mix of, albeit majority contractordriven, bedo have a diy base. That diy base has seen pressure for quite some time asiers either have consumers either have stretch Balance Sheets or spend on experiences. But we have seen the trade base with, the contractor base remodel side be a bit more durable especially on that high end, larger project base. Theyre running through backlogs right now, but they also have some continuing green shoots as they look at customers who may be staying in homes for longer as they hesitate to turn over that existing home stock and want to make sure that that space is a livable space for them for years to come. Liz youre a big company. I mean, 32 billion market cap. And when the the elon musk and tesla talking about margins, everybodys talking about margins. And i do want to ask you that. In your recent earnings report, youve got an outlook for operating margin of 9. 2 93798 , to 9. 8 , a 60 basis point range there. What do you think will get you up to the higher end of that range . Yeah, as we look, again, just over half of our business is in the residential space. We hoe thats going to be pressure we know thats going to be pressuredded. And then the nonresidential side is going to be a bit better than that. And so as we look to go throughout the year, really if that revenue range starts to play in and we start to see the commoditybased products that we sell steel pipe, duck till iron pipe, pvc pipe, copper tube levels were seeing right now, because theyre in deflationary territory and is they maintain that that level that were seeing, we believe tha