Thought. Sorry about that. I couldnt resist. Im Charles Payne this is making money. Breaking right now, if were seeing a Fourth Quarter rally it has to start at the beginning. It is critical that microsoft, alphabet, remember they report after the close. We will handicap those names and other potential movers. This as the market face as crucial test. We could see big breakdowns or breakouts any moment. Jim bianco and erin gibbs on that. 100 dead wrong, how jamie dimon is summing up central bank forecasting. I will ask carl roche consequences of central bank being perennially wrong. Thomas massie at 2 45 as the speaker drama rolls on. And you dont want to miss my takeaway, redefining the American Dream to fit a tighter budget. That is not the american way, folks. I say it is time for us to dream big again. All that and so much more on making money. Charles all right, folks, so the markets are trying to get up there, right . You see this. We opened strong. We start to give it away right away. Heres the thing. It is up on earnings, not the big names but consequential names. Ironically we talk a lot on this show about earnings estimates. They were starting to go up in the summertime here. Citi put out a piece, if you take into account evisions and some of the early releases were down at the low points with respect to earnings which is not, may not be a bad thing. We like clearing those slow hurdles. Give a Situational Awareness because a lot of moving parts what is happening right now. Coming into the day today, big trends, equitying lower, bond lower, dollar sideways. I would love to see the dollar come downs gold taking off, bitcoin, out of nowhere, out of nowhere really taking off. Lets go over this. There is so many things to work out and digest. Remember the s p 500, if it is going to have a big year a breakout year we got to get it through 4600. That is just two months left in the year. I want to bring in Bianco Research president jim bianco. Jill, i want to begin with earnings. Seems like it will be key. I have a chart here going back to 2020 of composition of returns of this market. Go back to 2020, it was all about multiple growth. 23 of move was multiple growth. Year after that, 2021, 34 of the move was earning. Big, big year for earnings. This year it has been 5 earnings, 5 multiple growth. Obviously there is not a lot of room left for multiple growth particularly in the key names. To me, earnings this is it, earnings have to really come out, some big numbers and some big guidance. What are your thoughts . Well i agree with you. The key is going to be that youre going to have to see some big earning numbers. The economy is also set to report on thursday that gdp number. That should presage the Third Quarter earnings should be good. The reason you need them to be good because you talked about multiple contraction. What leads to multiple contraction, higher Interest Rates. If the stock market has a hurdle of higher Interest Rates it needs to outperform on earnings and other things to beat that hurdle. What do i mean by that hurdle . Dr. Jeremy siegel but a new edition of stocks for the long run. In it he says the long rated return of the stock market is 8 f you get 5 1 2 in money market fund, half the 2 3 of the stock market gain with no risk. The stock market cant give you 8 in so so earnings. It has to do better than to attract money and go higher. Charles by the way since you brought that up i brought attention to the tiny sliver, dividends, when people are getting this yield, they no longer need to rely on utility dividend stocks. They are taking it on the chin when they usually do well this environment. The 200day moving average, we were a little bit below a little bit above it. Call it 4200. Resistance at break out at 4600. This to me is the moment of truth. What happens if we start to break out from unthere because i think we can trigger some big selling as well . I agree. 200day moving average is like technicians like to use, is it is it stock market above or below the 200day moving average. Were right at it. If we go below it the market starts moving down, seven ofstocks held up the whole stock market. Take out the magnificent seven. It is in a downtrend. It is supposed to be year two of a stock market it is not going up maybe i you ought to get out of it. You look at 5 1 2 money market fund, make i should hide over there . This is important that the stock market show resiliency at this level it can hold this 200day moving average and not get into the definition of a downtrend. Charles then there is bitcoin which has been quiet all year long. This is absolutely amazing, this move that its made. It was mows sying along and taken off. I saw where you tweeted this spike here, i guess technicians are calling it a god candle. Does that mean a mill dollar bitcoin is right around the corner . I guess so. I never heard of a god candle. With adopting bitcoin which would be bullish if that happened. I think there are two fundamental stories behind this move. One, the depository trust corporation, ddtc, has now gotten a filing from blackrock to be the custodian for their spot bitcoin etf. That doesnt mean it was approved but soundings like blackrock is getting ready for it to be approved. Tom emmer is starting to emerge as possibly the next speaker of the house. He is about as procrypto as you can find. He might be the next speaker of the house. Combine those two things together, those technicians talking about the god candle, you had a spectacular 24 hours in cryptocurrencies led by bitcoin. Charles what is really interesting, all the bitcoin fans, that you normally see around this time, they havent been around. I think they were even caught flatfooted. This is sort of, feels more organic if you will. Hey, jim, thanks a lot. Always appreciate starting the show with you. Thank you. Charles folks, dont look now the uninverting of the yield curve is starting to speed up. What do you we mean . You remember inverted yield curve was really bad down here, 100 basis points . It is down a lot less. We talk a lot about it on the show, the two and 10year spread. My next guest says if this happens there is some interesting consequential things that could happen. Joining me main Street Asset Management llc, chief Investment Officer erin gibbs. Lets talk about this. When this goes up, uninverts that is supposed to be the quick countdown to recession. Do you think history will repeat itself . Weve been so wrong for so many months. Charles throw it out. I think the one thing we could really hold up where we could say that, even if we do have a recession it is going to be extraordinarily mild is really about the Employment Situation in the u. S. So we may technically have slower gdp growth but were not going to have that accompanied by what our great fear is, unemployment. Charles right. And that, a lot has to do with demographics and aging. Charles would that be a soft landing then . That would be a soft landing. Technically we hit a recession but we still have low unemployment, we still have consumer spending. So maybe it slows down for two quarters but i think really looking at these type of dem traffics and the strength of the u. S. Consumer which again weve been very wrong the fast two years, were able to keep spending as rates go higher. That is important factor looking how bad a recession can be. Charles lets remember the leading economic indicators, the conference board, they keep saying yes it is flashing recession but even they believe it will be a shallow recession. Yep. Charles maybe we waste a lot of time focused on a little shallow recession than on what comes after that or potentially comes after that. Technical definition of consumers and how they actually feel and spend and pay for their bills and so on. Charles you like Consumer Staples. I pulled up the xlp, the Consumer Staples line because obviously this has been somewhat of a disappointment last couple years t was a key support point. It was resistance and support. If it holds here could it have move to bounce here . Definitely. It is more of a defensive play. Clearly with rates rising as they have were just in some big headwinds when it comes to stocks, so i feel these are sort of your recessionproof defensive types of trades. Charles right. That have been doing very well. Again u. S. Consumer still not going away. Still buying cocacola. Charles cocacola, 3m having a good day today. General motors having a pretty good day, cocacola. Of course there was a big, some of these Consumer Staples got hit on ozempic and fat loss drugs. Right. Charles i think that creates a buying opportunity. I dont see how people will stop drinking coke. Maybe they will drink more. Listen take a pill, have two slices of pie, why buy one . I think those cush appetite. They seem artificial to be. Consumer staples was place to be beginning of this year. They had pricing power, they were weathering the storm and then the bottom fell out. Right. Weve seen some good reports. Coke obviously had its pop today, pun intended but i think that just looking up, sort of your consumer stocks, i would actually say less on big purchases financing. Charles yeah. But smaller purchase where it doesnt require financing unless they are looking very attractive, they have been beaten up and less likely to go down if we have another wave and another hit. Charles i got you. Thank you, erin. Nancy tengler with eye on names ahead. Jamie dimon big time he hit them hard. Carl roach is with us. He says the fed is haphazard in the monetary approach to policy. No kidding but what is his solution . He has got one next. This isnt just freight. These arent just shipments. Theyre promises. Promises of all shapes and sizes. Each, with a time and a place theyve been promised to be. A promise is everything to old dominion, because it means everything to you. This is american infrastructure. Megawatts of power, rails and open road, and essential services of every kind. All running on countless invisible networks, making it a prime target for cyberattacks. But the same aipowered security that protects all of google also defends the systems running americas infrastructure. For these services. For the 336 million of us living here. Hi, im jason and ive lost 202 pounds on golo. So the first time i ever seen a golo advertisement, i said, yeah, whatever. Theres no way this works like this. And threw it to the side. A couple weeks later, i seen it again after getting not so pleasant news from my physician. I was 424 pounds, and my doctor was recommending weight loss surgery. To avoid the surgery, i had to make a change. So i decided to go with golo and its changed my life. When i first started golo and taking release, my cravings, they went away. And i was so surprised. You feel that your body is working and functioning the way it should be and you feel energized. Golo has improved my life in so many ways. Im able to stand and actually make dinner. Im able to clean my house. Im able to do just simple tasks that a lot of people call simple, but when youre extremely heavy theyre not so simple. Golo is real and when you take release and follow the plan, it works. Charles you know one of the things which love about jamie dimon he is seen as a straightshooter particularly when it comes to his own industry. Face it the Federal Reserve is the banks own industry. He is over in saudi arabia. Gives us straight about all the Central Banks control our lives. This is what he says theyre doing wrong. Take a listen. I want to point out Central Banks 18 months ago were 100 dead wrong. Maybe humility about financial forecasting. I would be quite cautious about what might happen next year. Charles dead wrong. I mean, folly, how many times have i said that . Just think about this, the Federal Reserve in america, they have more phds than any other entity out there like 500 phds, somehow they can never get this right. I want to bring in discipline funds founder, cio, cullen roche. What do you make of what dimon had to say . It is hard to argue with it and the problem with the way the fed operates theyre so data dependent. So theyre beholden to congress. They have to testify and justify everything they say and they have to really back it with evidence and the problem with that, that sort of an approach is inherently rear view mirror looking. They dont have the luxury a asset manager a lot of us have we can be forwardlooking. We have to by necessity make estimates what is coming down the pike here. The fed cant operate like that. They use this rear view mirror looking approach while a lot of times their perspectives end up lagging. They say they have business contacts. Obviously if jay powell calls anyone in the country theyre picking up the phone. Right . , maybe taylor swift might put him on hold. What team does he play for . Joking. Going down the wrong path. This they dont live with the consequences. Particularly the american public, poor people, middle class folks have to live with the consequence of them in the ivory towers, not counting gasoline, not counting food. It is a difficult, it is a difficult coexistence. Yeah, and i mean you could argue that right now is one of the most interesting periods because, and this is part of the problem i think. The underlying data that the fed looks at because it is sort of inherently rear view mirror looking they cant look at things like, for instance, right now there is strong disinflationary trend in shelter. We know, this is the thing that kind of. S me about this, one of the reasons i was vocal about the fed raising rates back in 2021 the fed doesnt look at a lot of real time indices. You can look at shelter for instance. Real time rent indices are cratering right now. They have been at zero for almost a year now. Back in 2022 the exact opposite was happening. In the bls, cpi data, all of this lagged, shelter especially. It is a 35 component that lags by six to nine months. Rather than looking at the real time data, zillow rent indices for instance, theyre looking at this rear view mirror looking data and they end up being behind the curve. Looking forward it is kind of interesting. They were behind the curve in 2021 because they were looking at this lagging data and now were almost in sort of the same situation where inflation has started to turn over and all the shelter data which will put a huge disinflationary force on inflation going down Going Forward is now in the same sort of position. So the fed is ultratight and everything is starting to look sort of disinflationary to me. Charles so i got less than a minute to go. What is your outlook, against that backdrop, what you see see combing almost like watching a Football Game in slow motion. You see the pass, you see the receiver you know if they catch it what will happen. What will happen with this play were watching play out in slow motion . We all dont have hands like Travis Kelsey or girlfriends like taylor swift, more importantly, but the weird thing Going Forward now, is what the fed has created is this environment where the, outcomes now get riskier and riskier. This is part of the difficult thing with fed policy, when theyre raising Interest Rates is that credit contracts lag and they update over time and the longer the fed keeps things really tight the riskier things get in terms of contracts having to roll over and reup in all of these higher rates. Thats a really slow process. So the more the fed grinds this screw the riskier everything gets, the longer we get out across the credit Maturity Curve and things have to roll over. Charles yeah. Cullen, thank you very, very much, appreciate it. Thanks. Thanks, charles. Charles all right, folks time now for some money mail. Always love hearing from you. Ken is asking i never hear anyone mention cds are they a good option in todays market . I think it is a great question but i think tbills and bonds are better with particularly with tax circumstances. If you have any kinds of questions or comments, tweet me cvpayne. I have to tell you i have a very exciting announcement. I will be hosting next mondays show at the money show in orlando. I will be there signing books as well, unbreakable investor. So go to money show. Com or charles. Money show. Com either of those for more information. If youre in orlando, lets get together t will be a lot of fun. Coming up here my takeaway redefining the American Dream to put into a tiny budget. We dont want to do that. This is the moment of truth, folks. We have a couple of major, Major Companies reporting the earnings after the close. This could be the start of a Fourth Quarter rally or be more disappointment. Disappointment. Well see right after the break. The biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. It still does. What can you do with spy . Explore endless design possibilities. To find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. 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