Now we get these reports what in the world progress on the president s agenda right thats all it takes not only that, but we were talking about this yesterday, how about just the fundamentals of what weve gone through in this earnings season the combination of all of that, and then you start to look, we did get a little bit of pushback on some of the tech stocks they started to move forward as well but its the financials. You start to get any kind of heat under that, moving these financials to the upside, theres a lot of different reasons. By the way, boeing, which continues to be an absolute beast to the upside, keep an eye on this name when you look at cash flows and youre not focused just on p e and saying this is stretch, stretch, stretch, look at the cash flows of someone like boeing and whats going on globally, there are a lot of reasons why some of the stocks in the dow as well are pushing these stocks higher. So maybe the most important thing today for this market is the nasdaq 100 is up 1 led by the heavy hitters. And the Leadership Group that was taking a rest seems to have woken up, albeit, its only a day, but if you can build on that again, you resume the leaders that took us to where we are now anyway ill tell you how we live it. You got look, at your worst point yesterday, the s p was down 2. 95 and people are saying today, its the end of the correction and im howling with laughter. Not on air i do that off air. But, so, i think if you were smart enough not to get too nervous yesterday, apply that same restraint on a day like today with 26 out of 30 dow stocks up, with the xlk and the semis leading. And just say like, all right, this is cool we have a broadbased bounce, being led by tech, exactly what you want to see. But let me not jump out of my skin and celebrate, because its impossible to know whether or not the dip that weve been in has come to like, how could you possibly know . Let me point to one thing that i think is really important. While were sitting here pontificating about the next 3 move in the s p well, speak for yourself. Just generally, not on this show, emerging markets are up 30, 40 . India is up 40 . So, lets not lose sight of the fact that a ton of money is being made by looking outside of an s p thats selling at one of it highest multiple premiums versus the rest of the world in market history and lets make money all over the world. Havent we said, the biggest risk right now is being out, rather than in and this is a reminder you get a little dribble of something of a report about the agenda and tax reform, and then the dow goes up 160 points on that report alone. Right and youve got, you know, apple, basically, putting on the equivalent of many of the stocks within the s p 500, just today its making nearly a 15 billion move, judge. I mean, 5 billion shares move 3, its not tough math. This is a huge move out of apple again. And its not because they declared a date for when theyre going to be bringing us all that great stuff that jon fortt was just talking about, even though they cant get those air buds shipped and they cant keep them in stock but people do risk by being out of the market. It doesnt mean, and i do agree with josh and i bet everyone here on the desk that what you want to do is peel some off. I mean, if you were smart enough to get in and or to not get shaken out, then youve got this very nice bounceback why wouldnt you take a little off . Now, will you curse yourself a week from now if were another 2 or 3 higher i guess so but i dont really make my moves based on those kinds of outcome. All right, so chris isley, good to see you again. Welcome back to halftime, at a time where a lot of folks were starting to talk about correction and here we are today with a nice snap back. Does it where do you see us going here i just try to keep things as simple as possible you have fiveyear Investment Grade bonds at 2. 1, 2. 2 you have a tenyear treasury at 2, 2. 1 you have a basket of diversified equities all around the world or an etf that represents the world. Over the next five years, what do you want to own what so when you look at all of that, any correction with as much cash thats out there, whether its induced by the Federal Reserve or just the fact that people have been very nervous, is going to be bought these socalled corrections, we used to get on a couple of days. And now these rolling corrections are happening over weeks, because theres a lot of pa fill going on four things, strong profits. Whether we slow down in Revenue Growth or not, strong profits. Second item, weve been through this innovation cycle we havent seen since the decade of the 1990s, and its dpong to continue to expand, in our opinion. Third is nonu. S. Economic growth, as josh just said, and the rest of the panel said, is really a tail wind now to the broader backdrop and feeds directly into largecap multinationals and last but not least low rates, low inflation and easy financial conditions. Are there enough buyers who are still willing to buy the dips thats a question. Sure, there are i mean, think about all the money thats been on the sidelines that has missed this thing. Then they start to see a little bit, a very small, shortlived correction to the downside, if you want to call it a correction, and theres still that money sitting there thats not in the market, scott and people are all talking about, well, those are great hedges im not sure i always agree with the idea that its just sitting in cash thats a great hedge i would rather be hedging against my actual positions. But the interest thing to me today is, im looking at these financials and the fact that theres actually something behind them on this move to the upside and theres buying we havent seen buying in the options of the financial in quite a while, at least a few weeks. And suddenly in the options world, the derivatives world with, bank of america are going crazy. Theyre buying 20,000 of the september 24 calls, 10,000 of the september 24 1 2 calls they finally have returned to some of these financials, take a look at bank of america the way thats moving today. The financials have a little bit of fuel under them today you mentioned Earnings Growth and i agree with you, you are getting much better Earnings Growth now, and we went through an earnings recession, along with a commitment, lets call it consolidation for two years, with the s p and price but, just bigger picture, since go back to 2012 multiple expansion is like 5x, Earnings Growth. So, even if you got, now, faster Earnings Growth than multiple expansion, you could still make the argument that at best, we tread water. Like, how do we have room to expand, even if Growth Continues at the pace its at, in profits . Big argument right now is exactly what youre saying, which is, a lot of people are suggesting, you know, it could say 18, 19 multiple, were a little bit overvalued, and whats the right one i would simply say, if we went through an earnings recession, we climbed out of it, we have easy financial conditions, we have a one, 1. 25 riskfree rate, et cetera. On a relative basis, still stocks represent the better risk reward. But even on an absolute basis, i would argue, because theres less leverage in the market today than when we peaked out in the late 1990s you could see this market go to a 20, 21, 22 multiple what justifies it household justifies is the trillions in cash thats out there. But thats being lived on now. Youre correct, theres trillions of cash. Theres also 69 million boomers above age 65 and theyre spending it. Theyre not reinvesting it one of the things to watch, to see if this pulls through or not over the next couple of years is to see that cash in the millennial household and how theyre investing it theres 75 million of them and it matches what the pullback may be in the allocation of fixed income that the boomers are doing, which were not actually seeing, quite frankly when you look at the pool of capital, thats why you get it isnt today the best evidence yet that the trump agenda is not in any way, shape, or form in the market yet and you get a whisper of taxes and the market is up its in the defense art cashin is saying he thinks half of the gains today are simply due to this one report well, yesterday we had mcconnell talking about the debt limit and how theres absolutely no way that theyre not going to raise the debt limit he said, zero chance yesterday so thats a little sigh of relief then you also had mnuchin talking about exactly what its going to take to move the tax plan forward those are both positives but i agree with you, scott, its not priced into the market. None of us here have been saying it is priced into the market weve been saying its not. Im saying today is the perfect evidence that that theory seems to be correct right thats the potential upside and its a lot bigger than a 1 move, if something really happens. And if its not tax reform, if its tax cuts, thats actually more additive to earnings than tax reform, which would be mostly zero sum and repatriation as part of that would be massive. Massive because then you dont have to go after the Infrastructure Spending and fight all these little jurisdictions across the country. All right lets bring in now our ylan mui. She has been following these reports of progress being made on tax reform. Ylan, its good to see you this politico report got everybody talking and the markets moving you were on the ground in kentucky yesterday with two of the big players. Mcconnell and mnuchin. What about your reporting . Does it square up with this politico report that has the markets off to the races today so the big news in the political report was that these big six, the white house and gop leadership, had essentially come to an agreement on how to pay for tax reform and yes, i was with mnuchin and mcconnell out in louisville yesterday, and you know, they had their kumbaya moments, where they showed a united front and that they were showing that they could get along. But im just not convinced that we are at this moment yet where there is agreement on the framework to move forward. Im hearing a lot of skepticism from capitol hill over the story and part of the reason is because when you look at the actual deductions that would be eliminated, right, when you look beyond the headline of unity, significant progress, and you look at what they would actually get rid of, the mortgage interest deduction, the state and local tax deduction, looking at net interest deductibility, those are all such big fights that it is clear that this is going to be a really messy progress, and im not sure that folks on the hill are quite ready to take some of those tough votes and take on some of those tough fights the way that the mirks might be hoping that they are yeah, it makes you wonder, guys, what the as ylan brings us her own reporting and thoughts on this, what the catalyst is to take the market to the next level without this report as people were starting to talk about the market being tired, is it just resting or is it worn out to the point of about to get sick yeah, i would say, part of the financial rally today may be, maybe the fact that wage growth is actually coming back in a way that would kick start a financial rally from their base. So right now, they have based out, it appears that way whats the next move for the financials, which could carry the market to the next level with or without tax cut or tax reform its actually resigns of wage growth, which will justify socalled Balance Sheet normalization, et cetera and at the same time, you get a flat dollar. That would help, as well ylan, it really sort of raises the question of whether youre going to get true reform or true cuts skand whether the market even cares at this point. As long as the word tax is in front of it, it seems to not make that much of a difference to investors at this point i would caution, though, what we hear from businesses, though, too is a temporary tax cut and if assi if its a tax cut, its going to have to be temporary, are not going to make a big difference to their pizbusinesses are corporations willing to have a tax cut if they know that will go up again when that period is over for the individual side, even if there is a tax cut, it would likely be so small and territory, that it wouldnt make a difference to their bottom line, as well. So even though the markets may be looking at a deficit financed tax cut as good news, im just wondering how much impact it will have on the bottom line shes exactly right and all of the Research Confirms this even just the last episode of this and the bush tax cut, when you give people a bonus or something thats laooked at as one time or temporary, it does not change the way they spend. It does not lead them to evaluate their lifestyle and the costs that theyre willing to incur. When you give people a raise or a permanent tax cut, they will actually act differently they will plan to spend more money in the future and follow through on that. And you can even see that with stocks you look at the benefit of a onetime giant dividend, like microsoft does you cant even see it in the chart, because it does nothing for the stock price. Its that onetime thing and people just arent excited about it so, i think thats exactly the main point its not just tax cut or tax reform its what are the conditions necessary to get Something Like that done . If youre a president in year one of a fouryear term, and youre saying, well, i just have to pass something, then, yeah, you might go for the temporary thing. I dont think thats additive to a stock market multiple. Well, it may be positive, even if its shortterm or short lived or not right now even the whiff of it has the dow up 160 ylan, thank you so much. Technologies and financials have been market leaders each sector showing signs of weakness recently so which sector is the better bet . Which is going to resume its leadership role . Techs out of the gate strong today. We mentioned sort of the f. A. N. G. You mentioned apple. But its, you know, its the tried and true name. Its the googles, the facebooks, the amazons, the apples. You answer this question, are you a momentum investor or a Value Investor its almost not even sec electortoral. Do you want the bestrun, bestmanaged, highest Quality Companies in the world where everyone already agrees with you that youre great. Or do you want to buy the thing that people, reticent about for seven years now, selling at one of the lowest sector multiples in the whole market . Thats what this is about. I would completely agree. I think if you look at sectors, thats we all used to look at sectors. I think right now, its the quality and its the characteristics of a company if you can reinvent yourself, in an industry where barriers to industry are coming down left and right, and you can gain that momentum without destroying your current capital stock, you win but dont you need if you think the market is going to go higher, as you do, dont you need either the financials or these techs, the f. A. N. G. S so to speak, to lead or a combination of both . I think you need a combination of both. The reason is because you need growth and you need a little bit of the capture of Net Interest Income thats the velocity you need in the system to get us to that next level that everybody wants. If you dont get the velocity coming out of the banking system, josh is right, that multiple doesnt stay at the 19 to 20 it comes back down in other words, your last couple of days, real estate leading or utilities leading thats not a good and the utilities lead was not a good sign, either. And thats as the tenyear was breaking, as it was rallying, as the yields were coming down. I think that is a very shortlived position is it more likely that you do have now this reboot of the f. A. N. G. S and some other nasdaq 100 and the banks. I still think two to three weeks. Im not saying today no, no, obviously more than just one day, but they had sort of that trade had rolled over a bit over the last couple of weeks. And my pushback, the one pushback i had with what josh said is, he called it momentum i dont know if i necessarily agree theyre just about momentum we look at the fundamental story of these tech stocks, specifically whether its apple, whether its microsoft what about growth its growth were not disagreeing momentum is momentum is not a matter of opinion. Its a technical term describing a stock thats already moved, has a tendency to keep moving. So im not saying that there arent good no, but i think the implication also is that its a momentum stock, tells people that they dont have the fundamental backing and a strong momentum story and a strong fundamental story and i think its both apple and microsoft are pretty good examples i think you guys are saying the same thing this is where the momentum let me say a different thing. Its great that we look at the top 50 names and thats where a lot of the market cap is and of course, its important. But lets just keep in mind, bigger picture, last week, we basically saw the haguest percentage of 52week lows outside of february 2016 so, basically, a year you have to go back a year and a half to find this many stocks making new year lows and thats got to cure itself, before you can make this case that youre getting another couple of handles in the spx thats the whole rolling correction idea thats been taking place, where, i dont know what the number is today. At one point, it was 40 of the s p, it was 10 or worse off of their 52week highs. The market has been going through these motions of a correction for weeks yeah. And you know, you can look at it one way and say, as josh says, we need to get through that. And then you could put a concern out there that said, this is the reason for it. Whether its the debt ceiling or Something Else or north korea or Something Else and i simply say, this market is moving on Earnings Growth. And every time we get earnings, thats when the market grabs its legs again and thats when you see these robo programs with flow coming in from the people investing in them they start to step up their robo purchases. And thats and its not just when we talk about an 18 p e on the s p, judge, and people say, well, thats extended, its at the far end, theyre right but show me some times when inflation was this of low. But were all sitting here rooting for wage growth. So which is it were rooting for that. Are we going to get it weve rooted for it for seven years. You cant make the argument that low inflation is supportive of high multiples, but also say that market advance will continue because theres going to be wage growth. Which one do you want . I think were more likely to get low keep with low inflation, rather tha